1
EXHIBIT 4.5
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY STATE SECURITIES
OR BLUE SKY LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR
EXEMPTIONS FROM SUCH REGISTRATION. THIS WARRANT MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN
THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE
BEEN COMPLIED WITH.
No. 1006 Right to Purchase 23,429 Shares
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, EnCap Equity 1994 Limited
Partnership, a Texas limited partnership, or registered assigns, is entitled to
purchase from Future Petroleum Corporation, a Utah corporation (the "COMPANY"),
at any time or from time to time during the period specified in Paragraph 2
hereof, Twenty Three Thousand Four Hundred Twenty Nine (23,429) fully paid and
nonassessable shares of the Company's Common Stock, par value $0.01 per share
(the "COMMON STOCK"), at an exercise price per share of $1.00 (the "EXERCISE
PRICE"). The term "WARRANT SHARES", as used herein, refers to the shares of
Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price
are subject to adjustment as provided in Paragraph 4 hereof.
This Warrant is subject to the following terms, provisions, and
conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part by the surrender of this Warrant, together with a
completed Exercise Agreement in the form attached hereto, to the Company during
normal business hours on any business day at the Company's principal office in
Dallas, Texas (or such other office or agency of the Company as it may
designate by notice to the holder hereof), and upon payment to the Company in
cash or by certified or official bank check of the Exercise Price for the
Warrant Shares specified in said Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or its designee as
the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise
Agreement delivered, and payment made for such shares as aforesaid.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in said Exercise Agreement, shall be delivered to
the holder hereof within a reasonable time, not exceeding seven business days,
after this Warrant shall have been so exercised. The certificates so delivered
shall be in
-1-
2
such denominations as may be requested by the holder hereof and shall be
registered in the name of said holder or such other name as shall be designated
by said holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of said certificates, deliver to said holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. The Company shall pay all taxes and other expenses
and charges payable in connection with the preparation, execution, and delivery
of stock certificates (and any new Warrants) pursuant to this Paragraph 1
except that, in case such stock certificates shall be registered in a name or
names other than the holder of this Warrant, funds sufficient to pay all stock
transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the holder hereof to the
Company at the time of the delivery of such stock certificates by the Company
as mentioned above.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or
from time to time after April 18, 1996, and before 5:00 p.m. local time on
April 18, 2001.
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants
and agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance,
be validly issued, fully paid, and nonassessable and free from all taxes,
liens, and charges with respect to the issue thereof.
(b) RESERVATION OF SHARES. During the period within which this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of issue upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of this Warrant.
(c) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its charter 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 to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the exercise privilege of the holder
of this Warrant against dilution or other impairment, consistent with the tenor
and purpose of this Warrant. Without limiting the generality of the foregoing,
(i) the Company will not increase the par value of the shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) before taking any action which would cause an adjustment reducing
the Exercise Price below the then par value of the shares of Common Stock so
receivable, the Company will take all such corporate action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock at such adjusted Exercise Price
upon the exercise of this Warrant.
-2-
3
(d) REGISTRATION. If the issuance of any Warrant Shares required to
be reserved for purposes of exercise of this Warrant requires registration with
or approval of any governmental authority under any federal or state law (other
than any registration under the Securities Act of 1933, as amended, or under
applicable state securities or blue sky laws) or listing on any national
securities exchange, before such shares may be issued upon exercise of this
Warrant, the Company will, at its expense, use its best efforts to cause such
shares to be duly registered or approved, or listed on the relevant national
securities exchange, as the case may be, at such time, so that such shares may
be issued in accordance with the terms hereof.
4. ANTIDILUTION PROVISIONS. The Exercise Price shall be subject to
adjustment from time to time as provided in this Paragraph 4. Upon each
adjustment of the Exercise Price, the holder of this Warrant shall thereafter
be entitled to purchase, at the Exercise Price resulting from such adjustment,
the largest number of Warrant Shares obtained by multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of Warrant Shares
purchasable hereunder immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment. For
purposes of this Paragraph 4, the term "CAPITAL STOCK", as used herein,includes
the Common Stock and any additional class of stock of the Company having no
preference as to dividends or distributions on liquidation which may be
authorized in the future, provided that the shares purchasable pursuant to this
Warrant shall include only shares of Common Stock, or shares resulting from any
subdivision or combination of the Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(g) hereof, the stock or other securities
or property provided for in said Paragraph, but excludes any Common Stock and
any additional class of stock of the Company having no preference as to
dividends or distributions on liquidation (x) that may be authorized in the
future pursuant to currently existing and outstanding written agreements as
listed in Schedule 4 attached hereto or (y) that may be issued pursuant to the
exercise of any currently existing or future options to purchase Common Stock
(or any such additional class of stock) granted by the Company to its
employees.
(a) ISSUANCE OF CAPITAL STOCK. If and whenever the Company shall
issue or sell any shares of Capital Stock without consideration or for a
consideration per share less than the Exercise Price in effect immediately
prior to the time of such issue or sale, then, forthwith upon such issue or
sale, the Exercise Price shall be reduced to a price (calculated to the nearest
cent) determined by dividing (x) an amount equal to the sum of (aa) the total
number of shares of Capital Stock outstanding immediately prior to such issue
or sale multiplied by the then existing Exercise Price, and (bb) the
consideration, if any, received by the Company upon such issue or sale, by (y)
the total number of shares of Capital Stock outstanding immediately after such
issue or sale.
(b) TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES; COMPUTATION OF
CONSIDERATION. For purposes of Paragraph 4(a) hereof the following provisions
shall also be applicable:
-3-
4
(i) In case the Company shall grant any rights to subscribe for or
purchase, or any options for the purchase of, Capital Stock or securities
convertible into or exchangeable for Capital Stock (such rights and options
being herein called "OPTIONS" and such convertible or exchangeable securities
being herein called "CONVERTIBLE SECURITIES"), whether or not such Options or
the rights to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per share for which Capital Stock is
issuable upon the exercise of such Options or upon the conversion or exchange
of such Convertible Securities (as determined in accordance with the following
sentence) shall be less than the Exercise Price in effect immediately prior to
the time of the granting of such Options, then the total maximum number of
shares of Capital Stock issuable upon the exercise of such Options or upon the
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall (as of the date of
granting of such Options) be deemed to be outstanding and to have been issued
and sold for such price per share. The price per share for which the Capital
Stock is issuable, as provided in the preceding sentence, shall be determined
by dividing (x) the total amount, if any, received or receivable by the Company
as consideration for the granting of such Options, plus the minimum aggregate
amount of additional consideration payable to the Company upon the exercise of
such Options, plus, in the case of any such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange of such Convertible
Securities, by (y) the total maximum number of shares of Capital Stock issuable
upon the exercise of such Options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such Options. Except
as provided in Paragraph 4(b)(vi) hereof, no further adjustments of the
Exercise Price shall be made upon the actual issue of such Capital Stock or of
such Convertible Securities upon the exercise of such Options or upon the
actual issue of such Capital Stock upon the conversion or exchange of such
Convertible Securities.
(ii) In case the Company shall issue or sell Convertible
Securities, whether or not the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per
share for which Capital Stock is issuable upon the conversion or
exchange of such Convertible Securities (as determined in accordance
with the following sentence) shall be less than the Exercise Price in
effect immediately prior to the time of the issue or sale of such
Convertible Securities, then the total maximum number of shares of
Capital Stock issuable upon the conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale of
such Convertible Securities) be deemed to be outstanding and to have
been issued and sold for such price per share, provided that (a) except
as provided in Paragraph 4(b)(vi) hereof, no further adjustments of the
Exercise Price shall be made upon the actual issue of such Capital Stock
upon the conversion or exchange of such Convertible Securities, and (b)
if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Exercise Price have
been or are to be made pursuant to other provisions of this Paragraph
4(b), no further adjustment of the Exercise Price shall be made by
reason of such issue or sale. The price per share for which the Capital
Stock is issuable, as provided in the preceding sentence, shall be
determined by
-4-
5
dividing (x) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, by (y)
the total maximum number of shares of Capital Stock issuable upon the
conversion or exchange of all such Convertible Securities.
(iii) In case at any time the Company shall pay a
dividend or make any other distribution upon the Capital Stock payable
in Capital Stock, Options or Convertible Securities, any Capital Stock,
Options or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been
issued without consideration.
(iv) In case at any time any Capital Stock, Convertible
Securities, or Options shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. In case any Capital
Stock, Convertible Securities, or Options shall be issued or sold for a
consideration other than cash, the amount of the consideration other
than cash received by the Company therefor shall be deemed to be the
fair value of such consideration as determined in good faith by the
Board of Directors of the Company, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company shall be the market price thereof (determined as
provided in Paragraph 4(e) hereof) as of the date of receipt, but in
each such case without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In computing the market price of a
note or other obligation that is not listed or admitted to trading on
any securities exchange or quoted in the National Association of
Securities Dealers, Inc. Automated Quotation System or reported by the
National Quotation Bureau, Inc. or a similar reporting organization, the
total consideration to be received by the Company thereunder (including
interest) shall be discounted to present value at the prime rate of
interest of NationsBank of Texas, N.A. in effect at the time the note or
obligation is deemed to have been issued. In case any Capital Stock,
Convertible Securities, or Options shall be issued in connection with
any merger of another corporation into the Company, the amount of
consideration therefor shall be deemed to be the fair value as
determined in good faith by the Board of Directors of the Company of
such portion of the assets of such merged corporation as the Board shall
determine to be attributable to such Capital Stock, Convertible
Securities, or Options.
(v) In case at any time the Company shall take a record
of the holders of Capital Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in Capital Stock,
Options or Convertible Securities, or (b) to subscribe for or purchase
Capital Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of such Capital
Stock, Options or Convertible Securities.
-5-
6
(vi) If the purchase price provided for in any Option
referred to in Paragraph 4(b)(i) hereof, or the price at which any
Convertible Securities referred to in Paragraph 4(b)(i) or (ii) hereof
are convertible into or exchangeable for Capital Stock, shall change at
any time (whether by reason of provisions designed to protect against
dilution or otherwise), the Exercise Price then in effect hereunder
shall forthwith be increased or decreased to such Exercise Price as
would have obtained had the adjustments made upon the issuance of such
Options or Convertible Securities been made upon the basis of (a) the
issuance of the number of shares of Capital Stock theretofore actually
delivered upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities, and the total consideration
received therefor, and (b) the number of shares of Capital Stock to be
issued for the consideration, if any, received by the Company therefor
and to be received on the basis of such changed price.
(vii) If any adjustment has been made in the Exercise
Price because of the issuance of Options or Convertible Securities and
if any of such Options or rights to convert or exchange such Convertible
Securities expire or otherwise terminate, then the Exercise Price shall
be readjusted to eliminate the adjustments previously made in connection
with the Options or rights to convert or exchange Convertible Securities
which have expired or terminated.
(viii) The number of shares of Capital Stock outstanding
at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Capital Stock.
(c) SUBDIVISIONS AND COMBINATIONS. In case at any time the Company
shall subdivide the outstanding shares of Capital Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding
shares of Capital Stock shall be combined into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased. An adjustment made pursuant to this Paragraph 4(c)
shall become effective immediately after the effective date of such subdivision
or combination.
(d) EXTRAORDINARY DIVIDENDS AND DISTRIBUTIONS. In case at any time
the Company shall pay a dividend or make a distribution to all holders of
Capital Stock, as such, of shares of its stock, evidences of its indebtedness,
assets, or rights, options, or warrants to subscribe for or purchase such
shares, evidences of indebtedness, or assets, other than (i) a dividend or
distribution payable in Capital Stock, Options, or Convertible Securities or
(ii) a dividend or distribution payable in cash out of earnings or earned
surplus, then in each such case the Exercise Price shall be adjusted so that
the same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the record date mentioned below by a fraction, the
numerator of which shall be the total number of shares of Capital Stock
outstanding on such record date multiplied by the market price per share of
Capital Stock (determined as provided in Paragraph 4(e) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company) as of such record date of such shares of stock,
evidences of indebtedness, assets, or rights, options, or warrants so paid or
distributed, and the
-6-
7
denominator of which shall be the total number of shares of Capital Stock
outstanding on such record date multiplied by the market price per share of
Capital Stock (determined as provided in Paragraph 4(e) hereof) on such record
date. Such adjustment shall be made whenever such dividend is paid or such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such dividend or
distribution.
(e) COMPUTATION OF MARKET PRICE. For the purpose of any computation
under Paragraph 4(b) or (d) hereof, the market price of the security in
question on any day shall be deemed to be the average of the last reported sale
prices for the security for the 20 consecutive Trading Days (as defined below)
commencing 30 Trading Days before the day in question. The last reported sale
price for each day shall be (i) the last reported sale price of the security on
the National Market of the National Association of Securities Dealers, Inc.
Automated Quotation System, or any similar system of automated dissemination of
quotations of securities prices then in common use, if so quoted, or (ii) if
not quoted as described in clause (i) above, the mean between the high bid and
low asked quotations for the security as reported by the National Quotation
Bureau, Inc. if at least two securities dealers have inserted both bid and
asked quotations for such security on at least 10 of such 20 consecutive
Trading Days, or (iii) if the security is listed or admitted for trading on any
national securities exchange, the last sale price, or the closing bid price if
no sale occurred, of such class of security on the principal securities
exchange on which such class of security is listed or admitted to trading. If
the security is quoted on a national securities or central market system, in
lieu of a market or quotation system described above, the last reported sale
price shall be determined in the manner set forth in clause (ii) of the
preceding sentence if bid and asked quotations are reported but actual
transactions are not, and in the manner set forth in clause (iii) of the
preceding sentence if actual transactions are reported. If none of the
conditions set forth above is met, the last reported sale price of the security
on any day or the average of such last reported sale prices for any period
shall be the fair market value of such security as determined by a member firm
of the New York Stock Exchange, Inc. selected by the Company. The term
"TRADING DAYS", as used herein, means (i) if the security is quoted on the
National Market of the National Association of Security Dealers, Inc. Automated
Quotation System, or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be made on such
system or (ii) if the security is listed or admitted for trading on any
national securities exchange, days on which such national securities exchange
is open for business.
(f) RECORD DATE ADJUSTMENTS. In any case in which this Paragraph 4
requires that a downward adjustment of the Exercise Price shall become
effective immediately after a record date for an event, the Company may defer,
until the occurrence of such event, issuing to the holder of this Warrant
exercised after such record date and before the occurrence of such event the
additional Warrant Shares issuable upon such exercise by reason of the
adjustment required by such event over and above the Warrant Shares issuable
upon such exercise before giving effect to such adjustment.
(g) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE.
If any capital reorganization of the Company, or any reclassification of the
Capital Stock, or any
-7-
8
consolidation or merger of the Company with or into another corporation or
entity, or any sale of all or substantially all the assets of the Company to
another corporation or entity, shall be effected in such a way that the holders
of Common Stock (or any other securities of the Company then issuable upon the
exercise of this Warrant) shall be entitled to receive stock or other
securities or property (including cash) with respect to or in exchange for
Common Stock (or such other securities), then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful and
adequate provision shall be made whereby the holder of this Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Warrant, and in lieu of the shares of
Common Stock (or such other securities) immediately theretofore purchasable and
receivable upon the exercise hereof, such stock or other securities or property
(including cash) as may be issuable or payable with respect to or in exchange
for a number of outstanding shares of Common Stock (or such other securities)
equal to the number of shares of Common Stock (or such other securities)
immediately theretofore purchasable and receivable upon the exercise of this
Warrant, had such reorganization, reclassification, consolidation, merger, or
sale not taken place. In any such case appropriate provision shall be made
with respect to the rights and interests of the holder of this Warrant to the
end that the provisions hereof (including, without limitation, the provisions
for adjustments of the Exercise Price and of the number of Warrant Shares
purchasable upon exercise hereof) shall thereafter be applicable, as nearly as
reasonably may be, in relation to the stock or other securities or property
thereafter deliverable upon the exercise hereof (including an immediate
adjustment of the Exercise Price if by reason of or in connection with such
consolidation, merger, or sale any securities are issued or event occurs which
would, under the terms hereof, require an adjustment of the Exercise Price).
In the event of a consolidation or merger of the Company with or into another
corporation or entity as a result of which a greater or lesser number of shares
of common stock of the surviving corporation or entity are issuable to holders
of Capital Stock in respect of the number of shares of Capital Stock
outstanding immediately prior to such consolidation or merger, then the
Exercise Price in effect immediately prior to such consolidation or merger
shall be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Capital Stock. The Company shall not
effect any such consolidation, merger, or sale unless prior to or
simultaneously with the consummation thereof the successor corporation or
entity (if other than the Company) resulting from such consolidation or merger
or the corporation or entity purchasing such assets and any other corporation
or entity the shares of stock or other securities or property of which are
receivable thereupon by the holder of this Warrant shall expressly assume, by
written instrument executed and delivered (and satisfactory in form) to the
holder of this Warrant, (i) the obligation to deliver to such holder such stock
or other securities or property as, in accordance with the foregoing
provisions, such holder may be entitled to purchase and (ii) all other
obligations of the Company hereunder.
(h) NO FRACTIONAL SHARES. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the current market value of
a share of Common Stock, which current market value shall be the last reported
sale price (determined as provided in Paragraph 4(e) hereof) on the Trading Day
immediately preceding the date of the exercise.
-8-
9
(i) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then and in each such case the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
(j) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the
Capital Stock payable in shares of stock of any class or make any other
distribution (other than dividends or distributions payable in cash out
of earnings or earned surplus) to the holders of the Capital Stock;
(ii) the Company shall offer for subscription pro rata
to the holders of the Capital Stock any additional shares of stock of
any class or other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Capital Stock, or consolidation or
merger of the Company with or into, or sale of all or substantially all
its assets to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation, or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a
record shall be taken for determining the holders of Capital Stock entitled to
receive any such dividend, distribution, or subscription rights or for
determining the holders of Capital Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take
place. Such notice shall also specify the date on which the holders of Capital
Stock shall be entitled to receive such dividend, distribution, or subscription
rights or to exchange their Capital Stock for stock or other securities or
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may be.
Such notice shall be given at least 20 days prior to the record date or the
date on which the Company's books are closed in respect thereto. Failure to
give any such notice or any defect therein shall not affect the validity of the
proceeding referred to in clauses (i), (ii), (iii), and (iv) above.
(k) CERTAIN EVENTS. If any event occurs as to which, in the good
faith judgment of the Board of Directors of the Company, the other provisions
of this Paragraph 4 are not strictly applicable or if strictly applicable would
not fairly protect the exercise rights of the holder of this Warrant in
accordance with the essential intent and principles of such provisions, then
the
-9-
10
Board of Directors of the Company shall appoint the Company's regular
independent auditors or another firm of independent public accountants of
recognized national standing who are satisfactory to the holder of this Warrant
which shall give their opinion upon the adjustment, if any, on a basis
consistent with such essential intent and principles, necessary to preserve,
without dilution, the rights of the holder of this Warrant. Upon receipt of
such opinion, the Board of Directors of the Company shall forthwith make the
adjustments described therein; provided that no such adjustment shall have the
effect of increasing the Exercise Price as otherwise determined pursuant to
this Paragraph 4. The Company may make such reductions in the Exercise Price
or increase in the number of shares of Common Stock purchasable hereunder as it
deems advisable, including any reductions or increases, as the case may be,
necessary to ensure that any event treated for federal income tax purposes as a
distribution of stock rights not be taxable to recipients.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax in respect thereof, provided that
the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
6. AVAILABILITY OF INFORMATION. The Company will cooperate with the
holder of this Warrant and each holder of any Warrant Shares in supplying such
information as may be necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the Securities
and Exchange Commission as a condition to the availability of an exemption from
the Securities Act of 1933, as amended, for the sale of this Warrant or any
Warrant Shares. The Company will deliver to the holder of this Warrant,
promptly upon their becoming available, copies of all financial statements,
reports, notices, and proxy statements sent or made available generally by the
Company to its shareholders, and copies of all regular and periodic reports and
all registration statements and prospectuses filed by the Company with any
securities exchange or with the Securities and Exchange Commission.
7. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
8. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) WARRANT TRANSFERABLE. The transfer of this Warrant and all
rights hereunder, in whole or in part, is registrable at the office or agency
of the Company referred to in Paragraph 8(e) hereof by the holder hereof in
person or by his duly authorized attorney, upon surrender of this Warrant
properly endorsed. Each taker and holder of this Warrant, by taking or holding
the same, consents and agrees that this Warrant, when endorsed in blank, shall
be deemed negotiable, and that the holder hereof, when this Warrant shall have
been so endorsed,
-10-
11
may be treated by the Company and all other persons dealing with this Warrant
as the absolute owner and holder hereof for any purpose and as the person
entitled to exercise the rights represented by this Warrant and to the
registration of transfer hereof on the books of the Company; but until due
presentment for registration of transfer on such books the Company may treat
the registered holder hereof as the owner and holder hereof for all purposes,
and the Company shall not be affected by any notice to the contrary.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by (and at the expense of) the
holder hereof at the office or agency of the Company referred to in Paragraph
8(e) hereof, for new Warrants of like tenor representing in the aggregate the
right to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by said holder hereof at the time of
such surrender.
(c) 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 in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at the expense of the holder hereof,
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided
in this Paragraph 8, this Warrant shall be promptly cancelled by the Company.
The Company shall pay all taxes (other than securities transfer taxes) in
connection with the preparation, execution, and delivery of Warrants pursuant
to this Paragraph 8.
(e) REGISTER. The Company shall maintain, at its principal office in
Dallas, Texas (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. Anything in this
Warrant to the contrary notwithstanding, if, at the time of the surrender of
this Warrant in connection with any exercise, transfer, or exchange of this
Warrant, this Warrant shall not be registered under the Securities Act of 1933,
as amended, and under applicable state securities or blue sky laws, the Company
may require, as a condition of allowing such exercise, transfer, or exchange,
that (i) the holder or transferee of this Warrant, as the case may be, furnish
to the Company a written opinion of counsel, which opinion and counsel are
acceptable to the Company, to the effect that such exercise, transfer, or
exchange may be made without registration under said Act and under applicable
state securities or blue sky laws and (ii) the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company. The first holder of this Warrant, by taking and holding the same,
represents to the Company that
-11-
12
such holder is acquiring this Warrant for investment and not with a view to the
distribution thereof.
9. NOTICES. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the holder of this
Warrant or to the holder of shares acquired upon exercise of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail, postage prepaid and addressed, to such holder at the
address shown for such holder on the books of the Company, or at such other
address as shall have been furnished to the Company by notice from such holder.
All notices, requests, and other communications required or permitted to be
given or delivered hereunder to the Company shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail, postage
prepaid and addressed, to the office of the Company at 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, Attention: President, or at such other
address as shall have been furnished to the holder of this Warrant or to the
holder of shares acquired upon exercise of this Warrant by notice from the
Company. Any such notice, request, or other communication may be sent by
telegram or telex, but shall in such case be subsequently confirmed by a
writing personally delivered or sent by certified or registered mail as
provided above. All notices, requests, and other communications shall be
deemed to have been given either at the time of the delivery thereof to (or the
receipt by, in the case of a telegram or telex) the person entitled to receive
such notice at the address of such person for purposes of this Paragraph 9, or,
if mailed, at the completion of the third full day following the time of such
mailing thereof to such address, as the case may be.
10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT WITH
RESPECT TO THE VALIDITY OF THIS WARRANT AND THE RIGHTS AND DUTIES OF THE
COMPANY WITH RESPECT TO REGISTRATION OF TRANSFER WHICH SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF UTAH.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may not be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.
-12-
13
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on this 18th day of April, 1996.
FUTURE PETROLEUM CORPORATION
By: /s/ XXXX XXXXX
-------------------------------
Name: Xxxx Xxxxx
-------------------------
Title: President
-------------------------
-13-
