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EXHIBIT 2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND
PRIVILEGES SPECIFIED IN THIS WARRANT CERTIFICATE AND IN A SECURITIES PURCHASE
AGREEMENT, DATED AS OF NOVEMBER 1, 2000, BETWEEN XXXXXXX EXPLORATION COMPANY AND
THE INITIAL HOLDER OF SECURITIES NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF XXXXXXX EXPLORATION COMPANY AND WILL BE FURNISHED WITHOUT
CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST, AND THE HOLDER OF THIS
CERTIFICATE AGREES TO BE BOUND THEREBY.
WARRANT CERTIFICATE
NUMBER OF WARRANTS: 6,036,667 WARRANT NO. 1
This Warrant certificate ("Warrant Certificate") certifies that, for
value received, DLJ MB Funding III, Inc., a Delaware corporation, is the
registered holder of the number of warrants (the "Warrants") set forth above.
Each Warrant entitles the holder thereof, at any time or from time to time
during the Exercise Period, to purchase from the Company one fully paid and
nonassessable share of Common Stock at the Exercise Price, subject to adjustment
as provided herein. Initially capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Securities Purchase Agreement.
"Common Stock" means the common stock, $.01 par value
per share, of the Company and such other class of securities as shall
then represent the common equity of the Company.
"Company" means Xxxxxxx Exploration Company, a
Delaware corporation.
"Exercise Period" means the period of time between
the Closing Date, as defined in the Securities Purchase Agreement and
5:00 p.m. (New York City time) on the Expiration Date.
"Exercise Price," subject in all circumstances to
adjustment in accordance with Section 2, means $3.00 per share.
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"Expiration Date" means the tenth anniversary of the
Closing Date.
"Issuance Date" means November 1, 2000.
"Person" means any individual, corporation, company,
partnership, joint venture, trust, limited liability company,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of
entity.
"Preferred Stock" means shares of the Series A
Preferred Stock, par value $0.01 per share, of the Company.
"Preferred Value" per share of Preferred Stock means
the Stated Value of such Share, plus, without duplication, all accrued
and unpaid dividends on such share to and including the applicable date
of Warrant exercise.
"Price" means the average of the "high" and "low"
prices as reported in The Wall Street Journal's listing for such day
(corrected for obvious typographical errors) or if such shares are not
reported in such listing, the average of the reported sales prices on
the largest national securities exchange (based on the aggregate dollar
value of securities listed) on which such shares are listed or traded,
or if such shares are not listed or traded on any national securities
exchange, then the average of the reported sales prices for such shares
in the over-the-counter market, as reported on the National Association
of Securities Dealers Automated Quotations System, or, if such prices
shall not be reported thereon, the average of the closing bid and asked
prices so reported, or, if such prices shall not be reported, then the
average of the closing bid and asked prices reported by the National
Quotations Bureau Incorporated. The "Average" Price per share for any
period shall be determined by dividing the sum of the Prices determined
for the individual trading days in such period by the number of trading
days in such period.
"Securities Purchase Agreement" means the Securities
Purchase Agreement, dated as of November 1, 2000, between the Company,
DLJ MB Funding III, Inc. and DLJ ESC II, LP.
"Stated Value" means the stated value per share of
Preferred Stock, which is $20.00 per share.
Section 1. EXERCISE OF WARRANTS. (a) The Warrants may be exercised in
whole or in part, at any time or from time to time, during the Exercise Period,
by (i) presentation and surrender to the Company at its address set forth in
Section 10 of this Warrant Certificate with the Election To Exercise, attached
hereto as Exhibit A, duly completed and executed, and (ii) payment of the
Exercise Price, for the number of Warrants being exercised by either: (1) bank
draft or cashiers check, or (2) provided
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that the Company receives at least 5 days prior notice and subject to Section
1(d), delivery to the Company of certificate(s) representing a number of shares
of Preferred Stock having an aggregate Preferred Value equal to the aggregate
Exercise Price for the number of Warrants being exercised. If the aggregate
Preferred Value of the Preferred Stock delivered in payment of the aggregate
Exercise Price exceeds (because of fractional shares) the aggregate Exercise
Price for the number of Warrants being exercised; then (subject to Section 1(d))
the Company will promptly pay to the holder of the Warrants in cash such excess
amount; provided that such excess amount shall in no event be more than the
Preferred Value of one share of Preferred Stock. If the holder of this Warrant
Certificate at any time exercises less than all the Warrants, the Company shall
issue to such a holder a warrant certificate identical in form to this Warrant
Certificate, but evidencing a number of Warrants equal to the number of Warrants
originally represented by this Warrant Certificate less the number of Warrants
previously exercised. Likewise, upon the presentation and surrender of this
Warrant Certificate to the Company at its address set forth in Section 10 and at
the request of the holder, the Company will, without expense, at the option of
the holder, issue to the holder in substitution for this Warrant Certificate one
or more warrant certificates in identical form and for an aggregate number of
Warrants equal to the number of Warrants evidenced by this Warrant Certificate.
(b) To the extent that the Warrants have not been exercised at
or prior to the Expiration Date, such Warrants shall expire and the rights of
the holder shall become void and of no effect.
(c) Upon surrender of this Warrant Certificate in conformity
with the foregoing provisions, the Company shall transfer to the holder of this
Warrant Certificate appropriate evidence of ownership of the shares of Common
Stock or other securities or property (including any money) to which the holder
is entitled, registered or otherwise placed in, or payable to the order of, the
name or names of the holder or such transferee as may be directed in writing by
the holder, and shall deliver such evidence of ownership and any other
securities or property (including any money) to the Person or Persons entitled
to receive the same, together with an amount in cash in lieu of any fraction of
a share.
(d) In connection with payment of the Exercise Price with
shares of Preferred Stock, the Company may require that at the time of such
exercise it receive representations and warranties from the applicable holder of
the Warrants regarding such holder's title to the Preferred Stock and the lack
of encumbrances thereon. If the Company is unable to consummate an exercise of
Warrants through payment of the Exercise Price with shares of Preferred Stock
because of any limitations contained or construed in the Delaware General
Corporation Law, the Company shall use its best efforts to take all such action
as may be necessary to place the Company in a position to do so. In the event
the Company, after the taking of any action by it as contemplated above, is
unable to consummate such exercise, the Company shall
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accept such number of shares of Preferred Stock in payment as it shall then be
authorized to do so under the Delaware General Corporation Law.
(e) The Company shall not be required to issue a fractional
share of Common Stock upon the exercise of Warrants. As to any fraction of a
share which the Warrant holder would otherwise be entitled to purchase upon such
exercise, the Company may pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the Price per share of Common Stock on
the date of exercise.
Section 2. ANTIDILUTION ADJUSTMENTS. The shares of Common Stock
purchasable on exercise of the Warrants are shares of Common Stock as
constituted as of the Issuance Date. The number and kind of securities
purchasable upon the exercise of the Warrants, and the Exercise Price, shall be
subject to adjustment from time to time upon the happening of certain events, as
follows:
(a) Mergers, Consolidations and Reclassifications. In case of
any reclassification or change of outstanding securities issuable upon exercise
of the Warrants at any time after the Issuance Date (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of a subdivision or combination to which Section 2(b) applies), or
in case of any consolidation or merger of the Company with or into any entity or
other person (other than a merger with another entity or other person in which
the Company is the surviving corporation and which does not result in any
reclassification or change in the securities issuable upon exercise of this
Warrant Certificate), the holder of the Warrants shall have, and the Company, or
such successor corporation or other entity, shall covenant in the constituent
documents effecting any of the foregoing transactions that such holder does have
the right to obtain, upon the exercise of the Warrants, in lieu of each share of
Common Stock, other securities, money or other property theretofore issuable
upon exercise of a Warrant, the kind and amount of shares of stock, other
securities, money or other property receivable upon such reclassification,
change, consolidation or merger by a holder of the shares of Common Stock, other
securities, money or other property issuable upon exercise of a Warrant if the
Warrants had been exercised immediately prior to such reclassification, change,
consolidation or merger. The constituent documents effecting any such
reclassification, change, consolidation or merger shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section 2(a). The provisions of this Section 2(a) shall
similarly apply to successive reclassifications, changes, consolidations or
mergers.
(b) Subdivisions and Combinations. If the Company, at any time
after the Issuance Date, shall subdivide its shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be
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proportionately reduced, and the number of shares of Common Stock purchasable
upon exercise of the Warrants shall be proportionately increased, as at the
effective date of such subdivision, or if the Company shall take a record of
holders of its Common Stock for such purpose, as at such record date, whichever
is earlier. If the Company, at any time after the Issuance Date, shall combine
its shares of Common Stock into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares of Common Stock purchasable upon exercise of
the Warrants shall be proportionately reduced, as at the effective date of such
combination, or if the Company shall take a record of holders of its Common
Stock for purposes of such combination, as at such record date, whichever is
earlier.
(c) Dividends and Distributions. If the Company at any time
after the Issuance Date shall declare a dividend on its Common Stock payable in
stock or other securities of the Company to the holders of its Common Stock, the
holder of this Warrant Certificate shall, without additional cost, be entitled
to receive upon any exercise of a Warrant, in addition to the Common Stock to
which such holder would otherwise be entitled upon such exercise, the number of
shares of stock or other securities which such holder would have been entitled
to receive if he had been a holder immediately prior to the record date for such
dividend (or, if no record date shall have been established, the payment date
for such dividend) of the number of shares of Common Stock purchasable on
exercise of such Warrant immediately prior to such record date or payment date,
as the case may be.
(d) Certain Issuances of Securities. Subject to Section 2(f),
if the Company at any time after the Issuance Date shall issue any additional
shares of Common Stock (otherwise than as provided in subsections (a) through
(c) of this Section 2) at a price per share less than the Average Price per
share of Common Stock for the 20 trading days immediately preceding the date of
the authorization of such issuance (the "Market Price") by the Board of
Directors or its compensation committee (as applicable), then the Exercise Price
upon each such issuance shall be adjusted to that price determined by
multiplying the Exercise Price by a fraction:
i. the numerator of which shall be the sum of (1) the number
of shares of Common Stock outstanding immediately prior to the issuance
of such additional shares of Common Stock multiplied by the Market
Price, and (2) the consideration, if any, received by the Company upon
the issuance of such additional shares of Common Stock, and
ii. the denominator of which shall be the Market Price
multiplied by the total number of shares of Common Stock outstanding
immediately after the issuance of such additional shares of Common
Stock.
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No adjustments of the Exercise Price shall be made under this Section 2(d) upon
the issuance of any additional shares of Common Stock that (v) are issued
pursuant to any grant or award made prior to the Issuance Date under any thrift
plan, stock purchase plan, stock bonus plan, stock option plan, employee stock
ownership plan, incentive or profit sharing arrangement or other benefit or
compensation plan for the benefit of the Company's officers, directors and/or
employees ("Employee Benefit Plans") that has been approved by the Board of
Directors of the Company or its compensation committee and that otherwise would
cause an adjustment under this Section 2(d); (w) are issued pursuant to any
grant or award made on or after the Issuance Date under any Employee Benefit
Plan if the "Market Price" of any such issuance is not less than the lesser of
the Market Price as determined above and the "Fair Market Value", as defined
under the applicable Employee Benefit Plan, on the date of Board or compensation
committee authorization; (x) are issued pursuant to any Common Stock Equivalent
(as hereinafter defined) (i) if upon the issuance of any such Common Stock
Equivalent, any such adjustments shall previously have been made pursuant to
Section 2(e), (ii) if no adjustment was required pursuant to Section 2(e), or
(iii) if such Common Stock Equivalent was issued prior to this Warrant
Certificate; (y) are issued pursuant to a public offering by the Company; or (z)
results in an adjustment pursuant to Section 2(f).
(e) Common Stock Equivalents.
i. Subject to Section 2(f), if the Company shall, after the
Issuance Date, issue any security or evidence of indebtedness which is
convertible into or exchangeable for Common Stock ("Convertible
Security"), or any warrant, option or other right to subscribe for or
purchase Common Stock or any Convertible Security, other than pursuant
to Employee Benefit Plans (together with Convertible Securities,
"Common Stock Equivalent"), then the Exercise Price upon each such
issuance shall be adjusted as provided in Section 2(d) on the basis
that (i) the maximum number of additional shares of Common Stock
issuable pursuant to all such Common Stock Equivalents shall be deemed
to have been issued as of the date of issuance of such Common Stock
Equivalent; and (ii) the aggregate consideration for such maximum
number of additional shares of Common Stock shall be deemed to be the
minimum consideration received and receivable by the Company for the
issuance of such additional shares of Common Stock pursuant to such
Common Stock Equivalent.
ii. Notwithstanding the foregoing, no adjustment shall be made
pursuant to this Section 2(e) unless the consideration received and
receivable by the Company per share of Common Stock for the issuance of
such additional shares of Common Stock pursuant to such Common Stock
Equivalent is less than the Market Price. No adjustment of the Exercise
Price shall be made under this Section 2(e) upon the issuance of any
Convertible Security which is issued pursuant to the exercise of any
warrants or other subscription or purchase rights therefor, if any
adjustment shall previously have been made in the Exercise Price
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then in effect upon the issuance of such warrants or other rights
pursuant to this Section 2(e). No adjustment shall be made under this
Section 2(e) if an adjustment is to be made under Section 2(f). No
adjustment shall be made as a result of adjustment in the exercise or
conversion price of Common Stock Equivalents, if those adjustments
occur by the terms of such Common Stock Equivalents.
(f) Special Adjustments of Exercise Price. Notwithstanding
anything to the contrary in Section 2(d) or Section 2(e), this Section 2(f)
shall govern adjustments to the Exercise Price for the transactions described in
this Section 2(f).
i. If the Company at any time after the Issuance Date and
prior to the second anniversary of the Issuance Date shall issue any
additional shares of Common Stock (otherwise than as provided in
subsections (a) through (c) of Section 2; pursuant to any Employee
Benefit Plan; pursuant to any Common Stock Equivalent outstanding as of
the Issuance Date) or upon the issuance of any such Common Stock, any
adjustments shall previously have been made pursuant to Section 2(e) or
Section 2(f)(ii); and the New Stock Issue Price (defined below) of such
additional shares is less than the Exercise Price then in effect, then
the Exercise Price upon each such issuance shall be adjusted to the New
Stock Issue Price of such additional shares. The "New Stock Issuance
Price" shall be determined by dividing the total amount of
consideration received by the Company for such issue or sale by the
number of shares of Common Stock issued or sold.
ii. If the Company at any time after the Issuance Date and
prior to the second anniversary of the Issuance Date, issues any Common
Stock Equivalent (which by definition excludes Employee Benefit Plan
securities) (otherwise than as provided in subsections (a) through (c)
of Section 2; or pursuant to any Common Stock Equivalent outstanding as
of the Issuance Date) and the New CSE Exercise Price (defined below) of
such Common Stock Equivalents is less than the Exercise Price then in
effect, then the Exercise Price upon each such issuance shall be
adjusted to the New CSE Exercise Price of such Common Stock
Equivalents. The "New CSE Exercise Price" shall be determined by
dividing (x) the total amount, if any, received or receivable by the
Company as consideration for the issuance of such Common Stock
Equivalents, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise, conversion or
exchange of such Common Stock Equivalents, plus, in the case of any
such Common Stock Equivalents 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
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Common Stock issuable upon the exercise, conversion or exchange of all
such Common Stock Equivalents.
(g) Miscellaneous. The following provisions shall be
applicable to the making of adjustments in the Exercise Price hereinbefore
provided in this Section 2:
i. The consideration received by the Company shall be deemed
to be the following: (I) to the extent that any additional shares of
Common Stock or any Common Stock Equivalent shall be issued for cash
consideration, the consideration received by the Company therefor, or,
if such additional shares of Common Stock or Common Stock Equivalent
are offered by the Company for subscription, the subscription price,
or, if such additional shares of Common Stock or Common Stock
Equivalent are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price, in
any such case excluding any amounts paid or receivable for accrued
interest or accrued dividends and without deduction of any
compensation, discounts, commissions or expenses paid or incurred by
the Company for and in the underwriting of , or otherwise in connection
with, the issue thereof; (II) to the extent that such issuance shall be
for a consideration other than cash, then, except as herein otherwise
expressly provided, the fair value of such consideration at the time of
such issuance as determined in good faith by the Board of Directors, as
evidenced by a certified resolution of the Board of Directors delivered
to the holder of this Warrant Certificate setting forth such
determination. The consideration for any additional shares of Common
Stock issuable pursuant to any Common Stock Equivalent shall be the
consideration received by the Company for issuing such Common Stock
Equivalent, plus the additional consideration payable to the Company
upon the exercise, conversion or exchange of such Common Stock
Equivalent. In case of the issuance at any time of any additional
shares of Common Stock or Common Stock Equivalent in payment or
satisfaction of any dividend upon any class of stock other than Common
Stock, the Company shall be deemed to have received for such additional
shares of Common Stock or Common Stock Equivalent (which shall not be
deemed to be a dividend payable in, or other distribution of, Common
Stock under Section 2(c) above) consideration equal to the amount of
such dividend so paid or satisfied. In the event additional shares of
Common Stock or Common Stock Equivalents are issued together with other
shares or securities or other assets of the Company or its subsidiaries
for consideration which covers both, the consideration for such shares
of Common Stock and Common Stock Equivalents shall be computed based on
the respective portions of such consideration so received, computed as
provided in this Section 2(g)i., as determined and allocated in good
faith by the Board of Directors of the Company.
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ii. Upon the expiration of the right to convert, exchange or
exercise any Common Stock Equivalent the issuance of which effected an
adjustment in the Exercise Price, if any such Common Stock Equivalent
shall not have been converted, exercised or exchanged, the number of
shares of Common Stock deemed to be issued and outstanding because they
were issuable upon conversion, exchange or exercise of any such Common
Stock Equivalent shall no longer be computed as set forth above, and
the Exercise Price shall forthwith be readjusted and thereafter be the
price which it would have been (but reflecting any other adjustments in
the Exercise Price made pursuant to the provisions of Section 2(d)
after the issuance of such Common Stock Equivalent) had the adjustment
of the Exercise Price made upon the issuance or sale of such Common
Stock Equivalent been made on the basis of the issuance only of the
number of additional shares of Common Stock actually issued upon
exercise, conversion or exchange of such Common Stock Equivalent and
thereupon only the number of additional shares of Common Stock actually
so issued shall be deemed to have been issued and only the
consideration actually received by the Company (computed as in this
Section 2(f)(i)) shall be deemed to have been received by the Company.
iii. The number of shares of Common Stock at any time
outstanding shall not include any shares thereof then directly or
indirectly owned or held by or for the account of the Company or its
wholly owned subsidiaries.
iv. Upon each adjustment of the Exercise Price as a result of
the calculations made in Section 2(d), (e) and (f) hereof, this Warrant
shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares of Common Stock obtained by (i)
multiplying the number of shares covered by this Warrant immediately
prior to such adjustment of the number of shares by the Exercise Price
in effect immediately prior to such adjustment of the Exercise Price
and (ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.
v. For the purpose of this Section 2, the term "shares of
Common Stock" shall mean shares of (i) the class of stock designated as
the Common Stock at the date hereof or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. If at any time, because of an
adjustment pursuant to Section 2(a), the Warrants shall entitle the
holders to purchase any securities other than shares of Common Stock,
thereafter the number of such other securities so purchasable upon
exercise of each Warrant and the Exercise Price of such securities
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in this Section 2.
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(h) Calculation of Exercise Price. The Exercise Price in
effect from time to time shall be calculated to four decimal places and rounded
to the nearest thousandth.
(i) Nasdaq Matters. Notwithstanding anything to the contrary
herein, any adjustment to the Exercise Price that would require shareholder
approval pursuant to the Nasdaq Market Rules shall be subject to the Company's
obtaining such requisite approval.
Section 3. NOTICE OF ADJUSTMENTS. Whenever the Exercise Price or the
number of shares of Common Stock is required to be adjusted as provided in
Section 2, the Company shall forthwith compute the adjusted Exercise Price or
the number of shares of Common Stock issuable and shall prepare and mail to the
holder hereof a certificate setting forth such adjusted Exercise Price or such
number of shares of Common Stock, showing in reasonable detail the facts upon
which the adjustment is based.
Section 4. VOLUNTARY REDUCTION. (a) The Company may at its option, but
shall not be obligated to, at any time during the term of the Warrants, reduce
the then current Exercise Price by any amount selected by the Board of
Directors; provided that if the Company elects so to reduce the then current
Exercise Price, such reduction shall be irrevocable during its effective period
and remain in effect for a minimum of 30 days following the date of such
election, after which time the Company may, at its option, reinstate the
Exercise Price in effect prior to such reduction. Whenever the Exercise Price is
reduced, the Company shall mail to the holder a notice of the reduction at least
30 days before the date the reduced Exercise Price takes effect, stating the
reduced Exercise Price and the period for which such reduced Exercise Price will
be in effect.
(b) The Company may make such decreases in the Exercise Price,
in addition to those required or allowed by this Section 4, as shall be
determined by it, as evidenced by a certified resolution of the Board of
Directors delivered to the holders, to be advisable to avoid or diminish any
income tax to the holder resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
Section 5. MANDATORY EXERCISE.
(a) If (i) the Price of the Common Stock is greater than $5.00
per share (as adjusted to reflect any stock split, combination,
reclassification, recapitalization, exchange, stock dividend or other
distribution payable in Common Stock with respect to shares of Common Stock) for
sixty (60) consecutive trading days in the principal market
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in which the Common Stock is traded and (ii) the Company gives written notice
(the "Company Notice") to the holder hereof of the satisfaction of the condition
in clause (i), then within fifteen (15) days after the effective date of the
Company Notice, the holder hereof shall exercise all of the Warrants. If
required by this Section 5, the holder hereof agrees to exercise the Warrants,
and to purchase shares of Common Stock pursuant to the terms of this Warrant
Certificate. If the holder has not fulfilled its obligations to exercise the
Warrants pursuant to this Section 5 within fifteen (15) days after the holder's
receipt of the Company Notice, then (without limiting the Company's available
remedies) (A) the obligations of holder under this Section 5 shall continue but
the purchase rights otherwise represented by this Warrant Certificate shall
terminate, (B) the Company may thereafter refuse, in its sole discretion, to
allow holder to exercise the Warrants (including pursuant to this Section 5),
(C) all obligations of the Company under Sections 0, 0, 0 xxx 0 xxxxx xxxxxxxxx,
(X) no further adjustments to the Exercise Price shall be made unless the
Company in its sole discretion consents in writing. Each Warrant holder's
obligations under this Section 5(a) shall be subject to the expiration or
termination of all waiting periods (and any extensions thereof) applicable to
exercise of such holder's Warrants under the HSR Act (as defined below);
provided that such holder shall have certified in writing to the Company that
a filing under the HSR Act is required and provided further that such holder
shall use its best efforts to cause the expiration or termination of such
waiting period to occur as promptly as practicable.
(b) Holder represents and warrants to the Company that holder
has full corporate power and authority to execute, deliver, and perform this
Warrant Certificate and to consummate the transactions contemplated hereby. The
execution, delivery, and performance by holder of this Warrant Certificate have
been duly authorized by all necessary corporate action of holder. This Warrant
Certificate has been duly executed and delivered by holder and constitutes a
valid and legally binding obligation of holder, enforceable against holder in
accordance with its terms, except that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws
affecting creditors' rights generally and (ii) general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(c) The right to require exercise of the Warrants is hereby
declared by the parties hereto to be a unique right, the loss of which is not
readily susceptible to monetary quantification. Consequently, the parties hereto
agree that an action for specific performance of the exercise and purchase
obligations created by this Section 5 is an available remedy for the breach of
the provisions of this Section 5. If the Company is forced to institute legal
proceedings to enforce its rights in accordance with the provisions of this
Section 5, it shall be entitled to recover its reasonable attorneys' fees and
court costs incurred in enforcing such rights.
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(d) Holder is executing this Warrant Certificate in order to
make and agree to the covenants, representations and warranties of holder
contained in this Section 5, which shall be binding upon the holder's successors
and assigns.
Section 6. NOTICES TO WARRANT HOLDERS. In the event:
(a) the Company shall authorize any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the
Company is required, or of the conveyance or sale of all or substantially all of
the assets of the Company, or of any reclassification or change of the Common
Stock or other securities issuable upon exercise of the Warrants (other than a
change in par value, or from par value to no par value, or from no par value to
par value or as result of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock (or other securities issuable upon the
exercise of the Warrants); or
(b) the Company shall declare any dividend (or any other
distribution) on the Common Stock or any other class of its capital stock, other
than dividends on the Shares, as defined in the Securities Purchase Agreement;
or
(c) the Company shall authorize the granting to the holders of
Common Stock or any other class of its capital stock of rights or warrants to
subscribe for or purchase any shares of any class or series of capital stock or
any other securities convertible into or exchangeable for shares of stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; then the Company shall cause to be sent to the
holder hereof, at least 30 days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
a written notice stating (x) the date for the determination of the holders of
record of shares of Common Stock (or other securities issuable upon the exercise
of the Warrants) entitled to receive any such dividends or other distribution,
(y) the initial expiration date set forth in any tender offer or exchange offer
for shares of Common Stock (or other securities issuable upon the exercise of
the Warrants), or (z) the date on which any of the events specified in
subsections (a)-(d) is expected to become effective or consummated, and the date
as of which it is expected that holders of record of shares of Common Stock (or
other securities issuable upon the exercise of the Warrants) shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon any such event. Failure to give such notice or any defect therein shall not
affect the legality or validity of any such event, or the vote upon any such
action.
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Section 7. REPORTS TO WARRANT HOLDERS. The Company will cause to be
delivered, by first-class mail, postage prepaid, to holder at such holder's
address appearing hereon, or such other address as the holder shall specify, a
copy of any reports delivered by the Company to the holders of Common Stock.
Section 8. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) Until the Expiration Date, the Company shall at all times
reserve and keep available, out of the aggregate of its authorized but unissued
Common Stock (and other securities), for the purpose of enabling it to satisfy
any obligation to issue shares of Common Stock (and other securities) upon the
exercise of the Warrants, the number of shares of Common Stock (and other
securities) issuable upon the exercise of such Warrants.
(b) The Company shall pay all expenses, taxes and other
charges payable in connection with the preparation, issuance and delivery of new
warrant certificates on transfer of the Warrants.
(c) All Common Stock (and other securities) which may be
issued upon exercise of the Warrants shall upon issuance be validly issued,
fully paid, non-assessable and free from all preemptive rights and all taxes,
liens and charges with respect to the issuance thereof, and will not be subject
to any restrictions on voting or transfer thereof except as set forth in the
Securities Purchase Agreement, any stockholders agreement and except for
restrictions arising under state or federal securities laws.
(d) All original issue taxes payable in respect of the
issuance of shares of Common Stock to the registered holder hereof upon the
exercise of the Warrants shall be borne by the Company; provided, that the
Company shall not be required to pay any tax or charge imposed in connection
with any transfer involved in the issuance of any certificates representing
shares of Common Stock (and other securities) in any name other than that of the
registered holder hereof, and in such case the Company shall not be required to
issue or deliver any certificate representing shares of Common Stock (and other
securities) until such tax or other charge has been paid or it has been
established to the Company's satisfaction that no such tax or charge is due.
(e) As soon as practicable after the receipt from the holder
of this Warrant Certificate of notice of the intent to exercise of a number of
warrants sufficient to require a filing under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 and the rules, regulations and formal interpretations
thereunder, as amended from time to time (the
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"XXX Xxx") (xxx after the receipt, if applicable, of the notice referred to in
Rule 803.5 of the HSR Act), but in any event no later than the 15th business day
after receipt of such notice(s), the Company will (i) if required by the HSR
Act, prepare and file with Antitrust Division of the Department of Justice (the
"DOJ") and the Federal Trade Commission (the "FTC") the Notification and Report
Form (accompanied by all documentary attachments contemplated thereby) required
by the HSR Act, (ii) upon request of the holder, request early termination of
the waiting period imposed by the HSR Act, and (iii) coordinate and cooperate
with the holder in responding to formal and informal requests for additional
information and documentary material from the DOJ and the FTC in connection with
such filing. Notwithstanding the foregoing, if the holder is required to file
with the DOJ and FTC the Notification and Report Form solely as a result of its
holding and/or purchasing shares of Common Stock issued pursuant to this Warrant
(with no regard to any other securities held by such holder or its affiliates)
and the holder certifies such fact to the Company in writing, the Company agrees
to promptly reimburse the holder for all fees and expenses for the preparation
and filing of such form, including all legal expenses and filing fees.
(f) The Company will not change the par value of the Common Stock from
par value $0.01 per share to any higher par value which exceeds the Exercise
Price then in effect, and will reduce the par value of the Common Stock upon any
event described in Section 2 that would, but for this provision, reduce the
Exercise Price below the par value of the Common Stock.
Section 9. NO RIGHTS AS STOCKHOLDER. The holder of the Warrants shall
not, by virtue of holding such Warrants, be entitled to any rights of a
stockholder of the Company either at law or in equity, and the rights of the
holder of the Warrants are limited to those expressed herein.
Section 10. NOTICES. All notices, requests, demands, and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given or made
if (i) delivered personally, (ii) sent by prepaid overnight courier service, or
(iii) sent by telecopy or facsimile transmission, answer back requested, to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice):
if to the holder, to such holder at:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telefax: 000-000-0000
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with a copy to:
Gardere Xxxxx Xxxxxx, LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: X.X. Xxxxxxx III
Telefax: 000-000-0000
and, if to the Company:
Xxxxxxx Exploration Company
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
Such notices, requests, demands, and other communications shall be effective (i)
if delivered personally or sent by courier service, upon actual receipt by the
intended recipient, or (ii) if sent by telecopy or facsimile transmission, when
the answer back is received.
Section 11. GOVERNING LAW. This Warrant Certificate shall be governed
by and construed in accordance with the laws of the State of New York without
regard to principles of conflict of laws.
Section 12. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT CERTIFICATES.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate, then, in the absence of notice to the Company that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver, in exchange for or in lieu of the lost, stolen, destroyed
or mutilated Warrant Certificate, a substitute Warrant Certificate of the same
tenor and evidencing a like number of Warrants.
Section 13. TRANSFER. Subject to Section 14 and the Securities Purchase
Agreement, transfer of Warrants, in whole or in part, shall be registered on the
books of the Company to be maintained for such purposes, upon surrender of the
Warrant Certificate representing such Warrants at the principal office of the
Company referred to in Section 10, together with a written assignment
substantially in the form of Exhibit B to this Warrant Certificate and a written
agreement, in form reasonably satisfactory to the Company, setting forth the new
Warrant holder's agreement to be bound by all of the terms of this Warrant
Certificate (including without limitation Section 14) and Section 5.5 of the
Securities Purchase Agreement, each duly executed by the holder, and funds
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sufficient to pay any transfer taxes payable by such holder upon the making of
such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant Certificate or Warrant Certificates in
the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
Certificate or Warrant Certificates evidencing the portion of the old Warrant
Certificate not so assigned, and the old Warrant Certificate shall promptly be
canceled.
Section 14. RESTRICTIONS ON TRANSFERABILITY. The Warrant Certificate
represents Warrants referred to in the Securities Purchase Agreement. Said
Securities Purchase Agreement is hereby incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of certain
limitations of rights, obligations, duties and immunities thereunder of the
Company and the holders, and in the event of any conflict between the terms of
this Warrant Certificate and the provisions of the Securities Purchase
Agreement, the provisions of the Securities Purchase Agreement shall control.
* * *
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed as of November 1, 2000, by the undersigned, thereunto
duly authorized.
XXXXXXX EXPLORATION COMPANY
By: /s/ Xxxxx X. Xxxxx
-------------------
Xxxxx X. Xxxxx
Vice President
DLJ MB FUNDING III, INC.
By: /s/ Xxx X. Xxxxx
-------------------
Xxx X. Xxxxx
Principal
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EXHIBIT A
ELECTION TO EXERCISE
[To be executed on exercise of the Warrant evidenced by this Warrant
Certificate pursuant to Section 1(a)]
TO: Xxxxxxx Exploration Company
The undersigned, the holder of the Warrants evidenced by the
attached Warrant Certificate, hereby irrevocably elects to exercise
_________________ of such Warrants, and herewith makes payment
of_____________________ representing the aggregate Exercise Price thereof, and
requests that the certificate representing the securities issuable hereunder be
issued in the name of ___________________________ and delivered to
_____________________________, whose address is ___________________________.
The Exercise Price is being paid by bank draft or cashier's
check.
Dated:
Name of Registered Holder:
Signature:
Title:
Address:
Notice: The above signature(s) must correspond with the name as written
on the face of the Warrant Certificate in every detail, without alteration or
enlargement or any change whatsoever.
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of the attached Warrant
Certificate hereby sells, assigns and transfers unto the assignee named below
all of the rights of the undersigned under this Warrant Certificate, with
respect to the number of shares of Common Stock set forth below:
Name and Address of Assignee:
No. of Shares of
Common Stock ______
and does hereby irrevocably constitute and appoint ____________________________
attorney-in-fact to register such transfer on the books of Xxxxxxx Exploration
Company maintained for that purpose, with full power of substitution in the
premises.
Dated:
Name:
Signature:
Witness:
The assignee named above hereby agrees to purchase and take the attached Warrant
Certificate pursuant to and in accordance with the terms and conditions of the
Warrant Certificate and Section 5.5 of the Securities Purchase Agreement, dated
as of ______________, 2000, between Xxxxxxx Exploration Company and the initial
holder named therein and agrees to be bound thereby.
Dated:
Name:
Signature:
