1996-- - WARRANT A
----------------- -----------------
WARRANT NO. Number of Shares
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS AN EXEMPTION FROM THE
REQUIREMENT OF SUCH REGISTRA TION IS AVAILABLE UNDER THE
CIRCUMSTANCES AT THE TIME OBTAINING.
Void After 5:00 P.M. Denver, Colorado Time on February 12, 2001
XXXXX OIL AND GAS COMPANY
Common Stock Purchase Warrant
XXXXX OIL AND GAS COMPANY, a NEVADA corporation ("Xxxxx" or the "Company"),
hereby certifies that, ----------------, with an address of
-------------------------------------------------------, or ------ permitted
assigns, for valuable consideration received, is entitled, subject to the terms
and conditions herein set forth, to purchase from the Company up to -------
fully paid and nonassessable shares of Common Stock, $0.10 par value per share,
of the Company, at the per share purchase price of $0.75 per share (the
"Purchase Price"), at any time or from time to time on or after the date hereof
and up to 5:00 P.M. Denver, Colorado time on February 12, 2001 (the "Expiration
Date"). The number and character of such shares of Common Stock are subject to
adjustment as provided herein.
1. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Additional Shares of Common Stock" shall mean all shares
(including treasury shares) of Common Stock issued or sold (or, pursuant to
Section 3.7 hereof, deemed to be issued) by the Company after the date
hereof, whether or not subsequently reacquired or retired by the Company,
other than shares of Common Stock issuable pursuant to this Warrant.
(c) "Adjusted Exercise Price" shall have the meaning specified in
Section 3.2 hereof.
(d) "Company" means Xxxxx Oil and Gas Company or any corporation which
shall succeed to or assume the obligations of Xxxxx Oil and Gas Company
hereunder.
- 1 -
(e) "Common Stock" shall mean the Common Stock, par value $0.10 per
share, of the Company and any stock into which such common stock shall have
been changed or any stock resulting from any reclassification of such
common stock, and shall include all other stock of any class (however
designated) of the Company the holders of which have the right, without
limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends
and distributions of any shares entitled to preference.
(f) "Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Common Stock, other than
any securities issuable pursuant to this Warrant.
(g) "Market Price", as used with reference to any share of stock on
any specified date, shall mean:
(i) if such stock is listed and registered on any national
securities exchange or traded on The Nasdaq Stock Market ("Nasdaq"),
(A) the last reported sale price on such exchange or Nasdaq of such
stock on the business day immediately preceding the specified date, or
(B) if there shall have been no such reported sale price of such stock
on the business day immediately preceding the specified date, the
average of the last reported sale price on such exchange or on Nasdaq
on (x) the day next preceding the specified date for which there was a
reported sale price and (y) the day next succeeding the specified date
for which there was a reported sale price; or
(ii) if such stock is not at the time listed on any such exchange
or traded on Nasdaq but is traded on the over-the-counter market as
reported by the National Quotation Bureau or other comparable service,
(A) the average of the closing bid and asked prices for such stock on
the business day immediately preceding the specified date, or (B) if
there shall have been no such reported bid and asked prices for such
stock on the business day immediately preceding the specified date,
the average of the last bid and asked prices on (x) the day next
preceding the specified date for which such information is available
and (y) the day next succeeding the specified date for which such
information is available; or
(iii) if clauses (i) and (ii) above are not applicable, the fair
value per share of such stock as determined in good faith and on a
reasonable basis by the Board of Directors of the Company and, if
requested, set forth in a certificate delivered to the holder of this
Warrant upon the exercise hereof.
- 2 -
(h) "Options" shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire either Common Stock or Convertible
Securities.
(i) "Other Securities" shall mean any stock and other securities of
the Company or any other person (corporate or otherwise) which the holders
of this Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of this Warrant, in lieu of or in addition to
the Common Stock, or which at any time shall be issuable or shall have been
issued to holders of the Common Stock in exchange for, in addition to or in
replace ment of the Common Stock or Other Securities pursuant to Section
3.5 or otherwise.
(j) "Purchase Price" shall mean $0.75 per share, subject to adjustment
as provided herein.
2. Exercise of Warrant.
2.1. Manner of Exercise. This Warrant may be exercised by the holder
hereof, in whole or in part (but not as to fewer than 10,000 shares of the
Common Stock unless, at the time of exercise, this Warrant entitles the holder
to purchase fewer than 10,000 shares of the Common Stock), on any business day
on or after the date hereof and before the Expiration Date, by surrender of this
Warrant, with the form of subscription at the end hereof (or a reasonable
facsimile thereof) duly executed by such holder, to the Company at its office in
Grand Junction, Colorado, and, except as otherwise provided in Section 2.1(b),
accompanied by payment, by certified or official bank check payable to the order
of the Company, in the amount obtained by multiplying (x) the number of shares
of the Common Stock (without giving effect to any adjustment therein) designated
in such form of subscription (or such reasonable facsimile) by (y) the Purchase
Price, and such holder shall thereupon be entitled to receive the number of
shares of the Common Stock determined as provided hereunder.
2.2. When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the business
day on which this Warrant shall have been surrendered to the Company as provided
in Section 2.1, and the person(s) in whose name(s) the certificate(s) for shares
of the Common Stock (or Other Securities) that are to be issued upon such
exercise in accordance with Section 2.3 shall be deemed the holder(s) of record
thereof at such time.
2.3. Delivery of Stock Certificates, etc. As soon as practicable after the
exercise of this Warrant in full or in part in accordance herewith the Company,
at its expense (including the payment by it of any applicable issue taxes), will
cause to be issued in the name of and delivered to the holder hereof, or as such
holder (upon payment by such holder of any applicable transfer taxes) may
direct,
(a) a certificate or certificates, marked with an appropriate legend
referring to the terms of this Warrant and any applicable restrictions on
such shares imposed by the Federal or any state securities laws, for the
- 3 -
number of full shares of the Common Stock (or Other Securities) to which
such holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash in
an amount equal to the same fraction of the Market Price of one full share
of the Common Preferred Stock on the business day next preceding the date
of such exercise, and
(b) in case such exercise is in part only, a new Warrant or Warrants
of like tenor, calling in the aggregate on the face or faces thereof for
the number of shares of the Common Stock equal (without giving effect to
any adjustment therein) to the number of such shares called for on the face
of this Warrant minus the number of shares designated by the holder upon
such exercise as provided in Section 2.1.
3. Common Stock Issuable Upon Exercise.
3.1. General. The number of shares of the Common Stock which the holder of
this Warrant shall be entitled to receive upon the exercise hereof or, if
securities or other property in addition to or in lieu of the Common Stock shall
by reason of the operation of the provisions of this Section be issuable upon
such exercise, the amount and kind of such securities or other property, shall
be adjusted or determined as provided in this Section 3.
3.2. Adjusted Exercise Price. The number of shares of the Common Stock
which the holder of this Warrant shall be entitled to receive upon the exercise
hereof shall be determined by multiplying the number of shares of the Common
Stock which, but for the provisions of this Section 3, would otherwise be
issuable upon such exercise, as designated by the holder hereof pursuant to
Section 2.1, by the fraction of which the numerator is the per share Purchase
Price and the denominator is the per share Adjusted Exercise Price (as herein
defined) in effect on the date of such exercise. The per share Adjusted Exercise
Price of the Common Stock shall initially be the Purchase Price (as defined in
Section 1) and shall be adjusted and readjusted from time to time as provided in
this Section 3 (and, as so adjusted or readjusted, shall remain in effect until
a further adjustment or readjustment thereof is required by this Section 3).
3.3. Stock Dividends, Stock Splits, etc. In case the Company at any time or
from time to time after the date hereof shall declare or pay any dividend on the
Common Stock payable in Common Stock, or effect a subdivision of the outstanding
shares of the Common Stock into a greater number of shares of the Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of
Common Stock), then, in any such event, the per share Adjusted Exercise Price
per share shall be adjusted effective as of the close of business on (i) the
record date for the determination of shareholders entitled to receive such
dividend if such dividend is in fact paid, or (ii) the day immediately preceding
the day upon which such subdivision shall become effective (any such day, as the
case may be, shall be referred to herein as the "Subdivision Effective Date"),
by multiplying the per share Adjusted Exercise Price in effect immediately prior
to the Subdivision Effective Date by the fraction of which (x) the numerator
- 4 -
shall be the number of shares of the Common Stock outstanding immediately prior
to the Subdivision Effective Date and (y) the denominator shall be the number of
shares of the Common Stock outstanding immediately prior to the Subdivision
Effective Date plus the number of shares of the Common Stock issuable upon the
payment of such dividend or the consummation of such subdivision, as the case
may be.
3.4. Adjustments for Combinations, etc. In case the outstanding shares of
the Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Adjusted Exercise
Price shall be adjusted, effective as of the close of business on the day
immediately preceding the day upon which such combination or consolidation is
effective (the "Combination Effective Date"), by multiplying the per share
Adjusted Exercise Price in effect immediately prior to the Combination Effective
Date by the fraction of which (x) the numerator shall be the number of shares of
the Common Stock outstanding immediately prior to the Combination Effective Date
and (y) the denominator shall be the number of shares of the Common Stock
outstanding immediately after the Combination Effective Date.
3.5. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization,
etc. In case the Company, after the date hereof, (a) shall consolidate with or
merge into any other person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit any other
person to consolidate with or merge into the Company and the Company shall be
the continuing or surviving person but, in connection with such consolidation or
merger, the Common Stock shall be changed into or exchanged for stock or other
securities or property of any other person, or (c) shall effect a capital
reorganization or reclassification of the Common Stock (other than a
reclassification subject to Sections 3.3 or 3.4), then, and in each such case,
proper provision shall be made so that the holder of this Warrant, upon the
exercise hereof at any time after the consummation of such consolidation,
merger, reorganization or reclassification, shall be entitled to receive, in
lieu of the Common Stock (or Other Securities) issuable upon such exercise prior
to such consummation, the stock and other securities and property to which such
holder would have been entitled upon such consummation if such holder had so
exercised this Warrant immediately prior thereto, subject to adjustments
(subsequent to such corporate action) as nearly equivalent as possible to the
adjustments provided for in this Section 3.
4. No Dilution or Impairment. The Company will not, by amendment of its
articles of organization or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against dilution or other impairment.
- 5 -
5. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive
any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to any other person
or any consolidation or merger involving the Company and any other
person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
the Company will give to the holder of this Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, and (ii) the date or expected date on
which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place
and the time, if any such time is to be fixed, as of which the holders of record
of the Common Stock (or Other Securities) shall be entitled to exchange their
shares of the Common Stock (or Other Securities) for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Unless otherwise required by law to be given sooner, such notice
shall be mailed within a reasonable time prior to the date therein specified.
6. Reservation of Stock, etc. The Company will at all times reserve and
keep available out of its authorized but unissued Common Stock, solely for
issuance and delivery upon the exercise of this Warrant, the full number of
shares of Common Stock (or Other Securities) then issuable upon the exercise of
this Warrant. All shares of the Common Stock issuable upon the exercise of this
Warrant shall be duly authorized, and when issued and paid for in full, validly
issued, fully paid and non-assessable with no liability on the part of the
holders thereof.
7. Registration Rights.
(a) Definitions. For purposes of this Section 7, the following terms shall
have the following respective meanings:
(i) "Commission" shall mean the United States Securities and Exchange
Commission or any other Federal agency at the time administering the Act.
(ii) The term "holder or holders of Registrable Stock" shall mean the
holders of Common Stock or Other Securities issued pursuant to this Warrant.
- 6 -
(iii) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document by the Commission.
(iv) The term "Registration Period" shall mean the period commencing
on the date hereof and ending (a) if this Warrant shall expire without having
been exercised in whole or in part, the Expiration Date or (b) if this Warrant
shall have been exercised in whole or in part, at such time as all shares of
Registrable Stock have been sold by the initial holder or can be sold publicly
without registration under the Act.
(v) The term "Registrable Stock" means (a) the shares of Common Stock
issued or issuable upon the exercise of this Warrant, and (b) any Other
Securities issued or issuable pursuant to this Warrant; provided, however, that
shares of Registrable Stock shall cease to be Registrable Stock if they are sold
or transferred pursuant to a registered public offering or other transaction
which does not result in restrictions on resale being imposed on the transfer by
virtue of Federal or state securities laws; and provided further that
Registrable Stock shall cease to be Registrable Stock if the holder could sell
or transfer such securities held by him in one or more transactions pursuant to
Rule 144 promulgated under the Act.
(b) Incidental Registration ("Piggyback").
(i) If, during the Registration Period, the Company at any time or
from time to time proposes to file with the Commission a registration statement
under the Act with respect to any proposed distribution of any of its securities
(other than a registration to be effected on Form S-4, S-8 or other similar
limited purpose form), whether for sale for its own account or for the account
of any other person holding registration rights with respect to the securities
of the Company, then the Company shall give written notice of such proposed
filing to the holders of Registrable Stock at least thirty (30) days before the
anticipated filing date, and such notice shall describe in detail the proposed
registration and distribution (including those jurisdictions where registration
or qualification under the securities or blue sky laws is intended) and shall
offer the holders of Registrable Stock the opportunity to register such number
of shares of Registrable Stock as the holders of Registrable Stock may request.
Upon receipt by the Company by the anticipated filing date of written requests
from the holders of Registrable Stock ("Participating Holders") for the Company
to register their Registrable Stock, the Company shall permit, or in the event
of an underwritten offering, shall use its best efforts to cause the managing
underwriter or underwriters of such proposed underwritten offering to permit,
the Participating Holders to include such securities in such offering on the
same terms and conditions as any similar securities of the Company included
therein; provided, however, that if in the opinion of the managing underwriter
or underwriters of such offering, the inclusion of the total amount or kind of
securities which it or the Company, and any other persons or entities, intend to
include in such offering would interfere, hinder, delay, reduce or prevent the
- 7 -
effectiveness or sale of the Company's shares of Common Stock proposed to be so
registered or would otherwise adversely affect the success of such offering,
then the amount or kind of securities to be offered for the accounts of the
Company and each holder of Common Stock (including without limitation
Registrable Stock) or securities convertible into or exercisable for Common
Stock proposed to be registered (other than any persons exercising demand
registration rights) shall be reduced (or eliminated) in proportion to their
respective values to the extent necessary to reduce the total amount of
securities to be included in such offering on behalf of such holders of
securities to the amount recommended by such managing underwriter. For purposes
of this Section, "value" shall mean principal amount with respect to debt
securities and the proposed offering price per share with respect to equity
securities. Notwithstanding the foregoing, if, at any time after giving written
notice of its intention to register Common Stock or other securities convertible
into or exercisable for Common Stock and prior to the effectiveness of the
registration statement filed in connection with such registration, the Company
determines for any reason either not to effect such registration or to delay
such registration, the Company may, at its election, by delivery of written
notice to the Participating Holders, (i) in the case of a determination not to
effect registration, relieve itself of its obligations to register any
Registrable Stock in connection with such registration, or (ii) in the case of
determination to delay the registration, delay the registration of such
Registrable Stock for the same period as the delay in the registration of such
other shares of Common Stock or other securities convertible into or exercisable
for Common Stock.
(ii) Exception. The Company shall not be required to include any of
the Registrable Stock of a Participating Holder in any registration statement or
post-effective amendment prepared at its own instance unless such Participating
Holder shall furnish such information and sign such documents as may be required
by the Commission or reasonably requested by the Company in accordance with
generally accepted practices, in connection with such proposed distribution.
(c) Covenants of the Company with Respect to Registration. In connection
with any registration under this Section 7, the Company shall, as expeditiously
as is reasonably possible:
(i) Prepare and file with the Commission a registration statement with
respect to the Participating Holders' Registrable Stock and, subject to the last
sentence of Section 7(b(i) hereof, use its best efforts to cause such
registration statement to become effective.
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(iii) Furnish to the Participating Holders such numbers of copies of a
prospectus, including, if applicable, a preliminary prospectus, in conformity
with the requirements of the Act, and such other documents as the selling
shareholders may reasonably request in order to facilitate the disposition of
Registrable Stock owned by the Participating Holders.
- 8 -
(iv) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions within the United States as shall be reasonably
requested by the Participating Holders; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(v) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Participating Holders
shall also enter into and perform their obligations under such an agreement.
(vi) Notify the Participating Holders, at any time when a prospectus
relating to Registrable Stock covered by such registration statement is required
to be delivered under the Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(vii) Furnish to the Participating Holders, on the date that shares of
Registrable Stock are delivered to the underwriters for sale in connection with
a registration pursuant to this Section 7, if such securities are being sold by
underwriters, or, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion as to matters of law only,
dated such date, of counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Participating Holders and (ii) a letter dated such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
and to the Participating Holders.
(d) The Company shall pay all costs, fees and expenses in connection with
all registration statements filed under this Section 7 including, without
limitation, the Company's legal and accounting fees, printing expenses and blue
sky fees and expenses, but not including the fees and expenses of counsel for
the Participating Holders in connection with such registration. However, the
Company shall not pay for underwriting discounts and commissions and
underwriters' expenses allocable to the Registrable Stock being registered or
state transfer taxes.
(e) Indemnification.
(i) The Company shall indemnify each Participating Holder under this
Agreement, its officers and directors and any person controlling it within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any loss, claim, damage, expense or liability (including without limitation all
expenses reasonably incurred in investigating, preparing, or defending against
any claim whatsoever, such expenses to be reimbursed by the Company as they are
- 9 -
incurred) to which it may become subject under the Act, the Exchange Act or
otherwise, arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus or any amendments or supplements thereto in which Registrable Stock
is included or in any application, statement or other document filed by the
Company with the Commission or any securities exchange or in any jurisdiction in
connection with qualifying such shares under the securities laws thereof, or
(ii) the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
unless such statement or omission is made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Participating Holder or an underwriter expressly for use in any such
registration statement or other document.
(ii) Each Participating Holder shall, as a condition to such
registration of Registrable Stock, agree to indemnify the Company, its officers
and directors and any person controlling the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any loss,
claim, damage or expense or liability (including without limitation all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever, such expenses to be reimbursed by the undersigned as they are
incurred) to which they may become subject under the Act, the Exchange Act or
otherwise, arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus or any amendments or supplements thereto in which Registrable Stock
is included or in any application, statement or other document filed by the
Company with the Commission or any securities exchange or in any jurisdiction in
connection with qualifying such shares under the securities laws thereof, or
(ii) the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
provided in each case that such statement or omission is made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Participating Holder expressly for use in any such registration
statement or other document, or (iii) any misuse by the Participating Holder of
any prospectus included in the registration statement or any violation of the
Act by the Participating Holder in connection with the sale or distribution of
his or her Registrable Stock under the registration statement.
(iii) Promptly upon receipt by a party claiming indemnification
hereunder of notice of the commencement of any action involving a claim referred
to above, such indemnified party will, if a claim in respect thereof is to be
made against a party which may be required to indemnify such party hereunder,
give written notice to the latter of the commencement of such action. In case
any such action is brought against an indemnified party, the indemnifying party
shall be entitled to participate in and to assume the defense of such action, to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party. Except as set forth herein, the indemnified party and any
party cooperating in the defense of such claim shall not settle or compromise
any such claim or admit liability without the express written consent of the
indemnifying party. The indemnified party shall have the right to be represented
by an advisory counsel and accountants, at its own expense, and the indemnified
- 10 -
party shall be kept fully informed of such action, suit or proceeding at all
stages thereof whether or not the indemnified party is so represented. After a
period of thirty days following the date the written notice of such claim was
given to the indemnifying party the indemnified party may settle any such claim
(and the amount of any such settlement shall be subject to indemnification
hereunder) unless within such thirty-day period the indemnifying party shall
have provided the indemnified party with notice and evidence to the indemnified
party's satisfaction that the indemnifying party reasonably disputes such claim
and has the financial ability to meet its indemnification obligations hereunder.
Notwithstanding the foregoing, the indemnified party may immediately cause to be
paid or discharged any asserted claim the nonpayment of which would have an
immediate substantial adverse impact on the indemnified party and any claim
which the indemnifying party has not disputed within thirty days of notice as
provided above.
(iv) If the indemnification provided for in this Section 7(e) is
unavailable or insufficient to hold harmless an indemnified party under such
subsection in respect of any losses, claims, damages or liabilities or action in
respect thereof or referred to therein, then each indemnifying party shall in
lieu of indemnifying such indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or actions in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and the Participating Holders,
on the other, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or actions as well as any other
relevant equitable considerations, including the failure to give the notice
required under such subsections. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the Company on the one
hand, or the Participating Holders, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Participating Holders agree that
it would not be just and equitable if contribution pursuant to this Section
7(e)(iv) were determined by pro rata allocation or by any other method of
allocation which did not take account of the equitable considerations referred
to above in this subsection. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act), shall be entitled
to contribution from any person who is not guilty of such fraudulent
misrepresentations.
(v) The obligations of the Company and the Participating Holders under
this Section 7(e) shall survive the completion of any offering of Registrable
Stock in a registration statement under this Section 7.
(vi) The rights of indemnification contained in this Section 7 shall
not be deemed to be the exclusive remedy of the parties hereto and such rights
shall be in addition to any other rights or remedies which any party hereto may
have at law or equity.
(f) Assignment of Registration Rights. The undersigned's rights set forth
in this Section 7 shall automatically be deemed assigned to any transferee or
assignee of this Warrant or shares of Common Stock or Other Securities issuable
hereunder, provided that immediately following such transfer the further
- 11 -
disposition of such securities by the transferee or assignee is restricted under
the Act; provided however, that, the termination of registration rights in
respect of any shares of Registrable Stock shall be binding upon any transferee
of such shares. Upon the request of any such holder, the Company will confirm in
writing to any transferee of such holder's Registrable Stock the Company's
continuing obligation to afford such transferee the benefits of the Company's
agreements contained in this Section 7, but no failure of the Company to confirm
such obligations shall in any way impair such transferee's rights under this
Section 7.
8. Substitution of Warrants.
8.1. Exchange of Warrants. Subject to the provisions appearing at the top
of the first page of this Warrant concerning, inter alia, the sale, transfer,
encumbrance or other disposition of this Warrant, upon surrender or exchange of
this Warrant, properly endorsed, to the Company, the Company at its expense will
issue and deliver to or upon the order of the holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
8.2. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory to the Company, or,
in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
9. Ownership of Warrant. Until this Warrant is transferred on the books of
the Company, the Company may treat the person in whose name this Warrant is
issued as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary, except that, if and when this Warrant is properly assigned in
blank, the Company may (but shall not be obligated to) treat the bearer hereof
as the absolute owner of this Warrant for all purposes, notwithstanding any
notice to the contrary. A Warrant, if properly assigned, may be exercised to the
extent provided herein by a new holder without first having a new Warrant
issued.
10. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant or from the holder of this Warrant shall be delivered
personally, by facsimile (if confirmed and followed by delivery by first class
mail), reputable overnight courier service, or mailed by first class registered
or certified mail, postage prepaid, to the Company at 000 Xxxxxxx Xxxxx, Xxxxx
000, X. X. Box 60219, Grand Junction, Colorado 81506-8758, Attn: President, or
to the holder at such address as may have been furnished to the Company in
writing by such holder, or, until an address is so furnished, to and at the
address of the last holder of this Warrant who has so furnished an address to
the Company. Any such notice shall be deemed to have been given on the date of
personal delivery, facsimile, delivery to a reputable overnight courier service
or deposit in the mail.
- 12 -
11. Warrant Holder Not a Shareholder. Holder shall not, by virtue of
anything contained in this Agreement or otherwise, prior to exercise of this
Warrant, be entitled to any right whatsoever, either in law or equity, of a
shareholder of the Company, including without limitation, the right to receive
dividends or to vote or to consent or to receive notice as a shareholder in
respect of the meetings of shareholders or the election of directors of the
Company or any other matter; provided however that all holders of Warrants will
be entitled to notice if: (a) the Company grants holders of its Common Stock
rights to purchase any shares of capital stock or any other rights, or (b) the
Company authorizes a reclassification, capital reorganization, consolidation,
merger or sale of substantially all of its assets.
12. Nontransferable. This Warrant is nontransferable without the prior
consent of the Company. Any such transfer shall be made in accordance with
Section 8.1 above.
13. Miscellaneous. The Company may from time to time supplement or amend
this Warrant without the approval of the holder in order to cure any ambiguity
or to be correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision, or to make any other
provisions in regard to matters or questions herein arising hereunder which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interest of the holder. This Warrant and any term hereof may be
amended, changed, waived, discharged or terminated only by an instrument in
writing signed by the Company and consented to in writing by the holder of this
Warrant. If for any reason any provision, paragraph or term of this Warrant is
held to be invalid or unenforceable, all other valid provisions herein shall
remain in full force and effect and all terms, provisions and paragraphs of this
Warrant shall be deemed to be severable. This Warrant shall be construed and
enforced in accordance with and governed by the laws of the state of Colorado
applicable to contracts made and to be performed entirely therein. The headings
in this Warrant are for reference purposes only and shall not limit or otherwise
affect the meaning hereof.
Dated as of: February 12, 1996.
XXXXX OIL AND GAS COMPANY
By:
----------------------------------
Xxxxxxx X. Xxxxx, Xx., President
- 13 -
FORM OF SUBSCRIPTION
[To be signed only upon exercise of the Warrant]
To: XXXXX OIL AND GAS COMPANY
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ------------* shares of the Common Stock of XXXXX OIL AND
GAS COMPANY and herewith makes payment of $----------- therefor, and requests
that the certificates for such shares be issued in the name of, and delivered
to, ------------------, whose address is -----------------------------------.
Dated:
-----------------------------------------
-----------------------------------------
(Signature must conform in all
respects to the name of the holder
as specified on the face of the
Warrant)
-----------------------------------------
(Address)
---------------
* Insert the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any
adjustment for additional Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
- 14 -
FORM OF ASSIGNMENT
[To be signed only upon transfer of the Warrant]
For value received, the undersigned hereby sells, assigns and transfers
unto ------------ the right represented by the within Warrant to purchase
----------- shares of the Common Stock of XXXXX OIL AND GAS COMPANY to which the
within Warrant relates, and appoints ------------------------ Attorney to
transfer such right on the books of XXXXX OIL AND GAS COMPANY, with full power
of substitution in the premises.
Dated:
-----------------------------------------
-----------------------------------------
(Signature must conform in all
respects to the name of the holder
as specified on the face of the
Warrant)
-----------------------------------------
(Address)
Signed in the presence of:
-----------------------------
- 15 -
