Exhibit 10.17
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT") OR
APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE AS
MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT TO PURCHASE _________ SHARES OF COMMON STOCK
IMPERIAL PETROLEUM RECOVERY CORPORATION
A Nevada Corporation
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Not Transferable or Exercisable Except
Upon Conditions Herein Specified
IMPERIAL PETROLEUM RECOVERY CORPORATION, a Nevada corporation ("Company"),
hereby certifies that ____________, is on the books of the Company maintained
for such purposes, as the registered holder hereof ("Holder"), for value
received, is entitled to purchase from the Company the number of fully paid and
non-assessable shares of Common Stock of the Company, $.001 par value ("Shares"
or "Common Stock"), stated above at the purchase price per Share set forth in
Section 1(b) below (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided. This Warrant is being issued pursuant the Subscription and Note
agreement herewith (the "Agreement"), to which the Company and Holder are
parties. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.
1. EXERCISE OF WARRANTS.
(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Agreement, with the attached Purchase Form duly
executed, at the principal office of the Company, or at such other place as the
Company may designate by notice to the Holder hereof, together with the original
convertible Note and a certified or bank cashier's check payable, at the time of
exercise, to the order of the Company in the amount of the Exercise Price times
the number of Shares being purchased in addition to conversion of the
Convertible Note. The Company shall deliver to the Holder hereof, as promptly as
practicable, certificates representing the Shares being purchased. This Warrant
may be exercised in whole or in part; and, in case of exercise hereof in part
only, the Company, upon surrender hereof, will deliver to the Holder a new
Warrant Agreement or Warrant Agreements of like tenor entitling the Holder to
purchase the number of Shares as to which this Warrant has not been exercised.
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(b) This Warrant may be exercised at a price of $0.15 per share (the
"Exercise Price"); PROVIDED HOWEVER, that the Exercise Price shall be subject to
adjustment pursuant to Section 6(b). This Warrant shall expire at the close of
business on _____________________ ___ , 2008.
2. TRANSFER OF WARRANT.
This Warrant may not be sold, transferred, hypothecated, or assigned,
in whole or in part, without the prior written consent of the Company.
3. RIGHTS AND OBLIGATIONS OF WARRANT HOLDER.
(a) The Holder of this Warrant Agreement shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or in
equity; PROVIDED, HOWEVER, that in the event that any certificate representing
the Shares is issued to the Holder hereof upon exercise of this Warrant, such
Holder shall, for all purposes, be deemed to have become the holder of record of
such Shares on the date on which this Warrant Agreement, together with a duly
executed Purchase Form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The rights
of the Holder of this Warrant are limited to those expressed herein and the
Holder of this Warrant, by his acceptance hereof, consents to and agrees to be
bound by and to comply with all the provisions of this Warrant Agreement,
including, without limitation, all the obligations imposed upon the Holder
herein. In addition, the Holder of this Warrant Agreement, by accepting the
same, agrees that the Company may deem and treat the person in whose name this
Warrant Agreement is registered on the books of the Company maintained for such
purposes as the absolute, true and lawful owner for all purposes whatsoever,
notwithstanding any notation of ownership or other writing thereon, and the
Company shall not be affected by any notice to the contrary.
(b) No Holder of this Warrant Agreement shall be entitled to vote or
receive dividends or to be deemed the holder of Shares for any purpose, nor
shall anything contained in this Warrant Agreement be construed to confer upon
any Holder of this Warrant Agreement any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any action by the
Company, whether upon any recapitalization, issue of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise, receive notice of
meetings or other action affecting stockholders (except for notices provided for
herein), receive dividends, subscription rights, or otherwise, until this
Warrant shall have been exercised and the Shares purchasable upon the exercise
thereof shall have become deliverable as provided herein; PROVIDED, HOWEVER,
that any such exercise on any date when the stock transfer books of the Company
shall be closed shall constitute the person in whose name the certificate for
those Shares are to be issued as the record holder thereof for all purposes at
the opening of business on the next succeeding day on which such stock transfer
books are open, and the Warrant surrendered shall not be deemed to have been
exercised, in whole or in part as the case may be, until the next succeeding day
on which stock transfer books are open for the purpose of determining
entitlement to dividends on the Company's common stock.
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4. SHARES UNDERLYING WARRANTS.
The Company covenants and agrees that all Shares delivered upon
exercise of this Warrant shall, upon delivery and payment therefor, be duly and
validly authorized and issued, fully paid and on-assessable, and free from all
stamp taxes, liens and charges with respect to the purchase thereof.
5. DISPOSITION OF WARRANTS OR SHARES; REGISTRATION RIGHT.
(a) The Holder of this Warrant Agreement and any transferee hereof or
of the Shares issuable upon the exercise of the Warrant Agreement, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the Act
or State Acts and shall not be sold, pledged, hypothecated, or otherwise
transferred (whether or not for consideration) except upon the issuance to the
Company of an opinion of counsel favorable to the Company or its counsel or
submission to the Company of such evidence as may be satisfactory to the Company
or its counsel, in each such case, to the effect that any such transfer shall
not be in violation of the Act or the State Acts. It shall be a condition to the
transfer of this Warrant that any transferee of this Warrant deliver to the
Company his written agreement to accept and be bound by all of the terms and
conditions of this Warrant Agreement. The Holder acknowledges that the Company
has granted registration rights as described in the Registration Rights
Agreement that is part of the Agreement.
(b) The stock certificates of the Company that will evidence the shares
of Common Stock with respect to which this Warrant may be exercisable will be
imprinted with a conspicuous legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 ("ACT") OR
THE SECURITIES LAWS OF ANY STATE ("STATE ACTS"). SUCH
SECURITIES SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) AT
ANY TIME WHATSOEVER EXCEPT UPON REGISTRATION OR UPON DELIVERY
TO THE COMPANY OF AN OPINION OF ITS COUNSEL SATISFACTORY TO
THE COMPANY OR ITS COUNSEL THAT REGISTRATION IS NOT REQUIRED
FOR SUCH TRANSFER OR THE SUBMISSION OF SUCH OTHER EVIDENCE AS
MAY BE SATISFACTORY TO THE COMPANY OR ITS COUNSEL TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE
ACT, STATE ACTS OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER."
6. ADJUSTMENTS.
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below:
(a) If at any time after the date of this Warrant and so long as this
Warrant is outstanding, there is a reverse stock split (combination), stock
split, stock dividend, subdivision, or similar distribution with respect to the
Common Stock, or a combination of the Common Stock, then, in such event, the
Exercise Price shall be adjusted in accordance with (b) below.
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(b) Immediately upon the effective date of any event requiring
adjustment pursuant to (a), the Company shall adjust the Exercise Price then in
effect (to the nearest whole cent) as follows:
i) in the event such adjustment is caused by a
forward stock split, stock dividend, subdivision, or other
similar distribution of shares of Common Stock, the Exercise
Price in effect, immediately prior to the effective date of
such event shall be decreased to an amount which shall bear
the same relation to the Exercise Price in effect immediately
prior to such event as the total number of shares of Common
Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately
after such event;
ii) in the event such adjustment is caused by a
combination of shares of Common Stock, the Exercise Price in
effect immediately prior to the close of business on the
effective date of such event shall be increased to an amount
which shall bear the same relation to the Exercise Price in
effect immediately prior to such event as the total number of
shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock
outstanding immediately after such event.
(c) Upon each adjustment of the Exercise Price pursuant to (b) above,
the Warrant outstanding prior to such adjustment in the Exercise Price shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
by (i) multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant prior to adjustment of the number of shares of Common Stock by
the Exercise Price in effect prior to adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect after such
adjustment of the exercise price.
(d) In case the Company (i) consolidates with or merges into any other
entity and is not the continuing or surviving entity of such consolidation or
merger, or (ii) permits any other entity to consolidate with or merge into the
Company and the Company is the continuing or surviving Company but, in
connection with such consolidation or merger, the Common Stock is changed into
or exchanged for common stock or other securities of any other entity or cash or
any other assets, or (iii) transfers all or substantially all of its properties
and assets to any other entity, or (iv) effects a reorganization or
reclassification of the equity of the Company in such a way that holders of
Common Stock shall be entitled to receive stock, securities, cash or assets with
respect to or in exchange for Common Stock, then, and in each such case, the
Company shall provide Holder with not less than 60 days notice of such event and
Holder must within said 60 day notice period exercise this Warrant and Holder
shall, after exercise of this Warrant receive the appropriate number of shares
of Common Stock and shall be entitled to receive, consistent with the number of
shares held by Holder, the stock and other securities, cash and assets paid upon
consummation of such consolidation, merger, transfer, reorganization or
reclassification. Failure of Holder to so exercise this Warrant within the 60
day notice period shall result in the extinguishments of any and all rights set
forth in this Warrant but shall not, in any manner, void, affect or extinguish
the entitlement of Holder to repayment of the Note and any and all accrued
interest or other entitlement set forth in the Note.
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7. LOSS OR DESTRUCTION.
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant Agreement and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement or
bond satisfactory in form, substance and amount to the Company or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant
Agreement, the Company will execute and deliver, in lieu thereof, a new Warrant
Agreement of like tenor.
8. SURVIVAL.
The various rights and obligations of the Holder hereof as set forth
herein shall survive the exercise of the Warrants represented hereby and the
surrender of this Warrant Agreement.
9. NOTICES.
Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery or United States
registered or certified mail, return receipt requested, postage prepaid (or
similar delivery if outside of the United States), and will be deemed to have
been given or delivered on the date such notice, purchase price or other
communication is so delivered or posted, as the case may be; and, if to the
Company, it will be addressed to the address specified on the cover page hereof,
and if to the Holder, it will be addressed to the registered Holder at its, his
or her address as it appears on the books of the Company.
IMPERIAL PETROLEUM RECOVERY CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxxx, Chairman and CEO
HOLDER:
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WARRANT EXERCISE AND STOCK PURCHASE FORM
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
To IMPERIAL PETROLEUM RECOVERY CORPORATION:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________* shares of Common Stock of Imperial Petroleum
Recovery Corporation and herewith makes payment of:
I am including a cashier's or certified bank check in the amount of $
________________.
I request that the certificate or certificates for such shares be
issued in the name of and delivered to the undersigned.
Dated:_____________________ SSN#________-________-________
_________________________________________________________
Signature (Must conform in all respects to the name of
Holder as specified on the face of the enclosed Warrant)
Address_______________________________________________________________________
City__________________________________ State _____ Zip Code
(*) Insert here not greater than the number of shares listed on the face of
the Warrant without making any adjustment for additional or fewer
shares of Common Stock pursuant to the adjustment provisions of the
Warrant Agreement. Such adjustments will be made by the Company.
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