UNITED ENERGY CORP. PURCHASE WARRANT WARRANT (“WARRANT”) TO PURCHASE SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE
Exhibit
4.1
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
Issuance
Date: February 13, 2009
UNITED
ENERGY CORP.
WARRANT (“WARRANT”) TO PURCHASE SHARES
OF
COMMON
STOCK, $0.01 PAR VALUE PER SHARE
This is
to certify that, FOR VALUE RECEIVED, [**] (“Warrantholder”), is entitled
to purchase, subject to the provisions of this Warrant, from United Energy
Corp., a corporation organized under the laws of Nevada (“Company”), at any time and
from time to time commencing from the Issuance Date (“Exercise Date”), but not later
than 5:00 P.M., Eastern time, on February 13, 2019 (“Expiration Date”), a total of
One Hundred and Fifty Thousand (150,000) shares (“Warrant Shares”) of Common
Stock, $0.01 par value (“Common
Stock”) of the Company, at an initial exercise price per share of
$0.12. The exercise price in effect from time to time is hereafter
called the “Warrant
Price”. The number of Warrant Shares purchasable upon exercise
of this Warrant and the Warrant Price shall be subject to adjustment from time
to time as described herein.
Section
1. Registration. The
Company shall maintain books for the transfer and registration of the
Warrant. Upon the initial issuance of the Warrant, the Company shall
issue and register the Warrant in the name of the Warrantholder.
Section
2. Transfers. As
provided herein, this Warrant may be transferred only pursuant to a registration
statement filed under the Securities Act or an exemption from registration
thereunder. Subject to such restrictions, the Company shall transfer
this Warrant from time to time, upon the books to be maintained by the Company
for that purpose, upon surrender hereof for transfer properly endorsed or
accompanied by appropriate instructions for transfer upon any such transfer, and
a new Warrant shall be issued to the transferee and the surrendered Warrant
shall be canceled by the Company.
Section
3. Exercise
of Warrant. (a) Subject to the provisions hereof, the
Warrantholder may exercise this Warrant in whole or in part at any time and from
time to time on and after the Exercise Date and ending on the Expiration Date,
upon surrender of the original of this Warrant, together with delivery of the
duly executed Warrant exercise form attached hereto (the “Exercise Agreement”) (which
may be by fax), to the Company during normal business hours on any business day
at the Company’s principal executive offices (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, by certified or official bank check or by wire
transfer for the account of the Company of the Warrant Price for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such holder’s
designee, as the record owner of such shares, as of the close of business on the
date on which the completed Exercise Agreement and original of this Warrant
shall have been delivered to the Company (or such later date as may be specified
in the Exercise Agreement). Certificates for the Warrant Shares so
purchased, representing the aggregate number of shares specified in the Exercise
Agreement, shall be delivered to the holder hereof promptly, after this Warrant
shall have been so exercised. The certificates so delivered shall be
in such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such 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 such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
(b) the holder of this Warrant may, at its election exercised
in its sole discretion, exercise this Warrant and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Warrant Price for the Warrant Shares specified in the Exercise
Agreement, elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a "Cashless
Exercise"):
Net
Number = (A x B) - (A x C)
B
For
purposes of the foregoing formula:
A= the
total number of shares with respect to which this Warrant is then being
exercised.
B= the
Closing Sale Price of the Common Stock on the trading day immediately preceding
the date of the Exercise Agreement.
C= the
Warrant Price then in effect at the time of such exercise.
Section
4. Compliance with the
Securities Act of 1933. Neither this Warrant nor the Common
Stock issued upon exercise hereof nor any other security issued or issuable upon
exercise of this Warrant may be offered or sold except as provided in this
Warrant and in conformity with the Securities Act, as amended, and then only
against receipt of an agreement of such person to whom such offer of sale is
made to comply with the provisions of this Section 4 with respect to any resale
or other disposition of such security. The Company may cause the
legend set forth on the first page of this Warrant to be set forth on each
Warrant or similar legend on any security issued or issuable upon exercise of
this Warrant unless counsel for the Company is of the opinion as to any such
security that such legend is unnecessary.
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Section
5. Payment
of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the registered holder of this Warrant in respect of
which such shares are issued. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is
due.
Section
6. Mutilated or Missing
Warrants. In case this Warrant shall be mutilated, lost,
stolen, or destroyed, the Company shall issue in exchange and substitution of
and upon cancellation of the mutilated Warrant, or in lieu of and substitution
for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for
the purchase of a like number of Warrant Shares, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction of the Warrant, and with respect to a lost, stolen or destroyed
Warrant, reasonable indemnity or bond with respect thereto, if reasonably
requested by the Company.
Section
7. Reservation of Common
Stock. The Company hereby represents and warrants that there
have been reserved, and the Company shall at all applicable times keep reserved,
out of the authorized and unissued Common Stock, a number of shares sufficient
to provide for the exercise of the rights of purchase represented by the Warrant
in full (without regard to any restrictions on beneficial ownership contained
herein), and the transfer agent for the Common Stock, including every subsequent
transfer agent for the Common Stock or other shares of the Company’s capital
stock issuable upon the exercise of any of the right of purchase aforesaid
(“Transfer Agent”),
shall be irrevocably authorized and directed at all times to reserve such number
of authorized and unissued shares of Common Stock as shall be requisite for such
purpose. The Company agrees that all Warrant Shares issued upon
exercise of the Warrant in accordance with its terms shall be, at the time of
delivery of the certificates for such Warrant Shares, duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of the
Company. The Company will supply from time to time the Transfer Agent
with duly executed stock certificates required to honor the outstanding
Warrant.
Section
8. Warrant
Price. The Warrant Price, subject to adjustment as provided in
Section 9, shall, if payment is made in cash or by certified check, be payable
in lawful money of the United States of America.
Section
9. Adjustment of Warrant
Exercise Price and Number Of Shares. The Warrant Price and the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
adjusted from time to time as follows:
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(a) If
the Company or any of its subsidiaries shall at any time or from time to time
while the Warrant is outstanding, pay a dividend or make a distribution on its
capital stock in shares of Common Stock, subdivide its outstanding shares of
Common Stock into a greater number of shares or combine its outstanding shares
into a smaller number of shares or issue by reclassification of its outstanding
shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(b) If
any capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation, or
sale, transfer or other disposition of all or substantially all of the Company’s
assets to another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions herein specified and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
such shares of stock, securities or assets as would have been issuable or
payable with respect to or in exchange for a number of Warrant Shares equal to
the number of Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, had such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition not taken place, and in any such case
appropriate provision shall be made with respect to the rights and interests of
each Warrantholder to the end that the provisions hereof (including, without
limitations, provision for adjustment of the Warrant Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or properties thereafter deliverable upon the exercise
hereof. The Company shall not effect any such consolidation, merger,
sale, transfer or other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity shall
assume, by written instrument executed and delivered to the Company, the
obligation to deliver to the holder of the Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase and the other obligations under this
Warrant. The provisions of this paragraph (b) shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) In
case the Company shall fix a record date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness or assets or subscription rights or warrants, the
Warrant Price to be in effect after such record date shall be determined by
multiplying the Warrant Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding multiplied by the Closing Sale Price of Common Stock on such
record date, less the fair market value (on a per share basis) (as determined by
the Company’s Board of Directors in good faith) of said assets or evidences of
indebtedness so distributed, or of such subscription rights or warrants, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such Closing Sale Price of Common Stock on such record
date. Such adjustment shall be made successively whenever such a
record date is fixed.
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(d) In
the event that, as a result of an adjustment made pursuant to this Section 9,
the holder of this Warrant shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon exercise of this Warrant shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares
contained in this Warrant.
(e) In
the event of any adjustment pursuant to this Section 9 in the number of Warrant
Shares issuable hereunder upon exercise, the Warrant Price shall be inversely
proportionately increased or decreased, as the case may be, such that the
aggregate purchase price for Warrant Shares upon full exercise of this Warrant
shall remain the same. Similarly, in the event of any adjustment in
the Warrant Price, the number of Warrant Shares issuable hereunder upon exercise
shall be inversely proportionately increased or decreased, as the case may be,
such that the aggregate purchase price for Warrant Shares upon full exercise of
this Warrant shall remain the same.
Section 10. Fractional Interest.
The Company shall not be required to issue fractions of Warrant Shares upon the
exercise of the Warrant. If any fraction of a Warrant Share
would, except for the provisions of this Section, be issuable upon the exercise
of the Warrant (or specified portions thereof), the Company shall round such
calculation to the nearest whole number and disregard the fraction.
Section 11. Benefits. Nothing
in this Warrant shall be construed to give any person, firm or corporation
(other than the Company and the Warrantholder) any legal or equitable right,
remedy or claim, it being agreed that this Warrant shall be for the sole and
exclusive benefit of the Company and the Warrantholder.
Section 12. Notices to
Warrantholder. Upon the happening of any event requiring an
adjustment of the Warrant Price, the Company shall forthwith give written notice
thereof to the Warrantholder at the address appearing in the records of the
Company, stating the adjusted Warrant Price and the adjusted number of Warrant
Shares resulting from such event and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based. In the event of a dispute with respect to any such
calculation, the certificate of the Company’s independent certified public
accountants shall be conclusive evidence of the correctness of any computation
made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment. At the Warrantholder’s request, the Company
shall deliver to the Warrantholder as of a requested date a notice specifying
the Warrant Price and the number of Warrant Shares into which this Warrant is
exercisable as of such date.
Section
13. [Intentionally Omitted]
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Section 14. Notices. Any
notice pursuant hereto to be given or made by the Warrantholder to or on the
Company shall be sufficiently given or made if delivered personally or by
facsimile or if sent by an internationally recognized courier, addressed as
follows:
If to the
Company:
United
Energy Corporation
000
Xxxxxxxxxxx Xxxxxxx
Xx.
00
Xxxxxxxx,
Xxx Xxxxxx 00000
Att: Xxxxxx
Xxxxx, Executive Vice President
With a
copy to:
Xxxxxxxxx
Xxxxx Xxxx & Xxxxx PLLC
000 Xxxx
Xxxxxx Xxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Att: Xxxxx
X. Xxxxxxxxx, Esq.
or such
other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section
14.
Any
notice pursuant hereto to be given or made by the Company to or on the
Warrantholder shall be sufficiently given or made if personally delivered or if
sent by an internationally recognized courier service by overnight or two-day
service, to the address set forth on the books of the Company or, as to each of
the Company and the Warrantholder, at such other address as shall be designated
by such party by written notice to the other party complying as to delivery with
the terms of this Section 14.
All such
notices, requests, demands, directions and other communications shall, when sent
by courier, be effective two (2) days after delivery to such courier as provided
and addressed as aforesaid. All faxes shall be effective upon
receipt.
Section
15. [Intentionally Omitted]
Section 16. Successors. All
the covenants and provisions hereof by or for the benefit of the Warrantholder
shall bind and inure to the benefit of its respective successors and assigns
hereunder.
Section 17. Governing
Law. This Warrant shall be deemed to be a contract made under
the laws of the State of New York, without giving effect to its conflict of law
principles, and for all purposes shall be construed in accordance with the laws
of said State.
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Section 18. Exercise Limitations.
Notwithstanding anything to the contrary contained herein, in no event shall the
Warrantholder be entitled to exercise this Warrant for a number of Warrant
Shares in excess of the number of Warrant Shares, which upon giving effect to
such exercise, would cause the aggregate number of shares of Common Stock
beneficially owned by such holder and its affiliates to exceed 9.99% of the
outstanding shares of Common Stock following such exercise. For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by a holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of the Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable (i) upon exercise of
the remaining unexercised Warrant beneficially owned by such holder and its
affiliates and (ii) upon conversion or exercise of the unconverted or
unexercised portion of any other securities of the Company beneficially owned by
such holder and its affiliates subject to a limitation on conversion or exercise
analogous to the limitation contained in this paragraph. Except as
set forth in the preceding sentence, for purposes of this paragraph beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this paragraph, in
determining the number of outstanding shares of Common Stock, a holder may rely
on the number of outstanding shares of Common Stock as reflected in (1) the
Company's most recent Form 10-Q or Form 10-K, as the case may be, (2) a more
recent public announcement by the Company or (3) any other notice by the Company
or its transfer agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral
request of any holder, the Company shall within one (1) Business Day confirm
orally and in writing to any such holder the number of shares Common Stock then
outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including the Warrant, by
such holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The Holder may waive
the limitations set forth herein by sixty-one (61) days written notice to the
Company.
Section 19. Replacement
Warrants. The Company agrees that within five (5) Business
Days after any request from time to time of the Warrantholder, it shall deliver
to such holder a new Warrant in substitution of this Warrant which is identical
in all respects except that the then Warrant Price shall be appropriately
specified in the Warrant, and the Warrant shall specify the fixed number of
Warrant Shares into which this Warrant is then exercisable. Such
changes are intended not as amendments to the Warrant but only as clarification
of the foregoing numbers for convenience purposes, and such changes shall not
affect any provisions concerning adjustments to the Warrant Price or number of
Warrant Shares contained herein.
Section 20. Absolute Obligation to Issue
Warrant Shares. The Company’s obligations to issue and deliver
Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the holder hereof to
enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the holder hereof or any other Person of any
obligation to the Company or any violation or alleged violation of law by the
holder or any other Person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Company to the holder hereof in
connection with the issuance of Warrant Shares. The Company will at
no time close its shareholder books or records in any manner which interferes
with the timely exercise of this Warrant.
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Section 21. Assignment. This
Warrant and the rights granted hereunder shall be assignable by the
Warrantholder without the consent of the Company.
Section 22. Judicial
Proceedings. Any legal action, suit or proceeding brought
against the Company with respect to this Warrant may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and by execution and delivery of this Warrant,
the Company hereby irrevocably and unconditionally waives any claim (by way of
motion, as a defense or otherwise) of improper venue, that it is not subject
personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court. The Company hereby irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action, suit or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, at its address set forth or
provided for in Section 14, such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law or commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. The Company irrevocably submits to
the exclusive jurisdiction of the aforementioned courts in such action, suit or
proceeding.
Section
23. DEFINITIONS: The following words and terms as used in
this Warrant shall have the following meanings:
(i) “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law to remain closed.
(ii) “Closing Sale Price” means, for
any security, the closing sale price per such security as reported by the
Principal Market on the trading day immediately preceding the date on which such
value is being determined.
(iii) “Issuance Date” means the date
on which this Warrant is issued to the Warrantholder as is set forth on the
first page of the Warrant.
(iv) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.
(v) “Principal Market” means, with
respect to any security, the principal securities exchange or trading market on
which such security is traded.
(vi) “Securities Act” means the
Securities Act of 1933, as amended.
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of
the date first written above.
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UNITED
ENERGY CORP.
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By:
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Name:
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Title:
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