NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF UNLESS PURSUANT TO A REGISTERED OFFERING OR BY
TRANSFER EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
ENERGY BIOSYSTEMS CORPORATION
COMMON STOCK PURCHASE WARRANT
No. W-1
This certifies that, for value received, PetroStar Inc. or registered
assigns (the "holder"), upon due exercise of this Warrant, is entitled to
purchase from Energy BioSystems Corporation, a Delaware corporation (the
"Company"), at any time on or after September 6, 1999 (the "Initial Exercise
Date"), and before the close of business on March 6, 2002, or if not a
trading date on the New York Stock Exchange, the next following trading date
(the "Expiration Date"), all or any part of 200,000 fully paid and
nonassessable Shares (the "Warrant Shares") of the Common Stock, par value
$0.01 per share, of the Company ("Common Stock"), at a purchase price of
$3.11 per share (the "Purchase Price"), both the Purchase Price and the
number of Warrant Shares issuable upon exercise of this Warrant being subject
to possible adjustment as provided below.
This Warrant is hereinafter called the "Warrant." The holder hereof and
all subsequent holders of this Warrant shall be entitled to all rights and
benefits provided to the holder or holders hereof pursuant to the terms of
this Warrant.
SECTION 1. EXERCISE OF WARRANT. The holder of this Warrant may, at any
time on or after the Initial Exercise Date and on or before the Expiration
Date, exercise this Warrant in whole at any time or in part from time to time
for the purchase of the Warrant Shares or other securities which such holder
is then entitled to purchase hereunder ("Warrant Securities") at the Purchase
Price (as hereinafter defined). In order to exercise this Warrant in whole
or in part, the holder hereof shall deliver to the Company (i) a written
notice of such holder's election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be purchased, (ii) payment of the
aggregate purchase price of the Warrant Shares being purchased by certified
or bank cashier's check, and (iii) this Warrant, provided that, if such
Warrant Shares or other Warrant Securities have not then been registered
under the Securities Act or applicable state securities laws, the Company may
require that such holder furnish to the Company a written statement that such
holder is purchasing such Warrant Shares or other Warrant Securities for such
holder's own account for investment and not with a view to the distribution
thereof, that none of such shares will be offered or sold in violation of the
provisions of the Securities Act and applicable state securities laws and as
to such other matters relating to the holder as the Company may reasonably
request to permit the issuance of such Warrant Shares or other Warrant
Securities without registration under the Securities Act and applicable state
securities laws. Upon receipt thereof, the Company shall, as promptly as
practicable, execute or cause to be executed and deliver to such holder a
certificate or certificates representing the aggregate number of Warrant
Shares (or if applicable, other Warrant Securities) specified in said notice.
The stock certificate or certificates so delivered shall be in the
denomination of 100 shares each or such
other denominations as may be specified in said notice and shall be
registered in the name of such holder or such other name as shall be
designated in said notice.
No fractional Warrant Shares are to be issued upon the exercise of this
Warrant, but the Company shall pay a cash adjustment in respect of any
fraction of a share which would otherwise be issuable in an amount equal to
the same fraction of the fair market value per share of the Warrant Shares on
the day of exercise, as reasonably determined by the Company. If this
Warrant shall have been exercised only in part, the Company shall, at the
time of delivery of said certificate or certificates, deliver to such holder
a new Warrant evidencing the rights of such holder to purchase the remaining
Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the request of such
holder, appropriate notation may be made on this Warrant and same returned to
such holder. The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, execution and delivery of share
certificates under this Section, except that, if such share certificates are
requested to be registered in a name or names other than the name of the
holder of this Warrant, funds sufficient to pay all stock transfer taxes
which shall be payable upon the execution and delivery of such share
certificates shall be paid by the holder hereof at the time of delivering the
notice of exercise mentioned above.
The Company represents, warrants and agrees that all Warrant Shares
issuable upon any exercise of this Warrant in accordance herewith shall be
validly authorized and issued, fully paid and nonassessable.
This Warrant shall not entitle the holder hereof to any of the rights of
a stockholder of the Company prior to exercise in the manner herein provided.
SECTION 2. TRANSFER, DIVISION AND COMBINATION. The Company shall keep
at its principal executive office a register for the registration and
registration of transfers of Warrants. The name and address of each holder
of one or more Warrants, each transfer thereof and the name and address of
each transferee of one or more Warrants shall be registered in such register.
Prior to due presentment for registration of transfer, the person in whose
name any Warrants shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not
be affected by any notice or knowledge to the contrary. The Company shall
give to any holder of a Warrant promptly upon request therefor, a complete
and correct copy of the names and addresses of all registered holders of
Warrants.
Subject to the provisions of Section 3, upon surrender of any Warrant at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by
the registered holder of such Warrant or his attorney duly authorized in
writing and accompanied by the address for notices of each transferee of such
Warrant or part thereof), the Company shall execute and deliver, at the
Company's expense, one or more new Warrants (as requested by the holder
thereof) in exchange therefor, exercisable for an aggregate number of Warrant
Shares equal to the number of shares for which the surrendered Warrant is
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exercisable and issued to such person or persons as such holder may request,
which Warrant or Warrants shall in all other respects be identical with this
Warrant.
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, and (a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Warrant
is, or is a nominee for, an original holder, such person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or (b) in the
case of mutilation, upon surrender and cancellation thereof, the Company at
its own expense shall execute and deliver, in lieu thereof, a new Warrant
identical in all respects to such lost, stolen, destroyed or mutilated
Warrant.
SECTION 3. COMPLIANCE WITH SECURITIES ACT; RESTRICTIONS ON TRANSFER.
(a) Each certificate for Warrant Shares (or other Warrant Securities)
initially issued upon the exercise of this Warrant and each certificate for
Warrant Shares (or other Warrant Securities) issued to subsequent transferees
of any such certificate shall (unless otherwise permitted by this Section 3)
be stamped or otherwise imprinted with legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. SUCH
SECURITIES MAY NOT BE SOLD OR OTHERWISE DISPOSED OF UNLESS PURSUANT TO
A REGISTERED OFFERING OR BY TRANSFER EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."
(b) The holder understands that it may be entitled to certain
registration rights pursuant to the Registration Rights Agreement dated as of
March 6, 1998 which are applicable to its Warrant Shares (and, if applicable,
other Warrant Securities).
SECTION 4. ADJUSTMENT OF PURCHASE PRICE.
(a) The Purchase Price and the number of Warrant Shares and the number
or amount of any other securities and property as hereinafter provided for
which this Warrant may be exercisable shall be subject to adjustment from
time to time effective upon each occurrence of any of the following events.
(b) If the Company shall declare or pay any dividend with respect to
its Common Stock payable in shares of Common Stock, subdivide the outstanding
Common Stock into a greater number of shares of Common Stock, or reduce the
number of shares of Common Stock outstanding (by stock split, reverse stock
split, reclassification or otherwise than by repurchase of its Common Stock)
(any of such events being hereinafter called a "Stock Split"), the Purchase
Price and number of Warrant Shares issuable upon exercise of this Warrant
shall be appropriately adjusted so as to entitle the holder hereof to receive
upon exercise of this Warrant, for the same aggregate consideration provided
herein, the same number of shares of Common Stock (plus cash in lieu of
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fractional shares) as the holder would have received as a result of such
Stock Split had such holder exercised this Warrant in full immediately prior
to such Stock Split.
(c) If the Company shall merge or consolidate with or into one or more
corporations or partnerships and the Company is the sole surviving
corporation, or the Company shall adopt a plan of recapitalization or
reorganization in which the Common Stock is exchanged for or changed into
another class of stock or other security or property of the Company, the
holder of this Warrant shall, for the same aggregate consideration provided
herein, be entitled upon exercise of this Warrant to receive in lieu of the
number of shares of Common Stock as to which this Warrant would otherwise be
exercisable, the number of shares of Common Stock or other securities (plus
cash in lieu of fractional shares) or property to which such holder would
have been entitled pursuant to the terms of the agreement or plan of merger,
consolidation, recapitalization or reorganization had such holder exercised
this Warrant in full immediately prior to such merger, consolidation,
recapitalization or reorganization.
(d) If the Company is merged or consolidated with or into one or more
corporations or partnerships under circumstances in which the Company is not
the sole surviving corporation, or if the Company sells or otherwise disposes
of substantially all its assets, and in connection with any such merger,
consolidation or sale the holders of Common Stock receive stock or other
securities convertible into equity of the surviving or acquiring corporations
or entities, or other securities or property after the effective date of such
merger, consolidation or sale, as the case may be, the holder of this Warrant
shall, for the same aggregate consideration provided herein, be entitled upon
exercise of this Warrant to receive, in lieu of the shares of Common Stock as
to which this Warrant would otherwise be exercisable, shares of such stock or
other securities (plus cash in lieu of fractional shares) or property as the
holder of this Warrant would have received pursuant to the terms of the
merger, consolidation or sale had such holder exercised this Warrant in full
immediately prior to such merger, consolidation or sale. In the event of any
consolidation, merger or sale as described in this Section 4(d), provision
shall be made in connection therewith for the surviving or acquiring
corporations or partnerships to assume all obligations and duties of the
Company hereunder or to issue substitute warrants in lieu of this Warrant
with all such changes and adjustments in the number or kind of shares of
stock or securities or property thereafter subject to this Warrant or in the
Purchase Price as shall be required in connection with this Section 4(d).
(e) If the Company (other than in connection with a sale described in
Section 4(d)) proposes to liquidate and dissolve, the Company shall give
notice thereof as provided in Section 5(b) hereof and shall permit the holder
of this Warrant to exercise any unexercised portion hereof at any time within
the 10 day period following delivery of such notice, if such holder should
elect to do so, and participate as a stockholder of the Company in connection
with such dissolution.
(f) Whenever any adjustment is made as provided in any provision of
this Section 4:
(i) the Company shall compute the adjustments in accordance with
this Section 4 and shall prepare a certificate signed by an officer of
the Company setting forth the adjusted number of shares or other
securities or property and Purchase
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Price, as applicable, and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall forthwith
be filed with the Company or its designee; and
(ii) a notice setting forth the adjusted number of shares or
other securities or property and the Purchase Price, as applicable,
shall forthwith be required, and as soon as practicable after it is
prepared, such notice shall be delivered by the Company to the holder
of record of each Warrant.
(g) If at any time, as a result of any adjustment made pursuant to this
Section 4, the holder of this Warrant shall become entitled, upon exercise
hereof, to receive any shares other than shares of Common Stock or to receive
any other securities, the number of such other shares or securities so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions contained in this Section 4 with respect to the Common Stock.
SECTION 5. SPECIAL AGREEMENTS OF THE COMPANY.
(a) The Company covenants and agrees that it will reserve and set apart
and have at all times a number of shares of authorized but unissued Common
Stock (and, if applicable, other Warrant Securities) then deliverable upon
the exercise of the Warrants or any other rights or privileges provided for
therein sufficient to enable it at any time to fulfill all its obligations
thereunder; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the exercise of this
Warrant at the Purchase Price then in effect, the Company will take such
corporate action as may, in the reasonable opinion of its counsel, be
necessary to increase its authorized shares but unissued shares of Common
Stock (and, if applicable, other Warrant Securities) to such number of shares
as shall be sufficient for such purposes.
(b) In case the Company proposes
(i) to pay any dividend upon the Common Stock or make any
distribution or offer any subscription or other rights to the holders
of Common Stock, or
(ii) to effect any capital reorganization or reclassification
of capital stock of the Company, or
(iii) to effect the consolidation, merger, sale of all or
substantially all of the assets, liquidation, dissolution or winding
up of the Company,
then the Company shall cause notice of any such intended action to be given
to each holder of the Warrants not less than 15 nor more than 60 days prior
to the date on which the transfer books of the Company shall close or a
record be taken for such dividend or distribution, or the date when such
capital reorganization, reclassification, consolidation, merger, sale,
liquidation, dissolution or winding up shall be effected, or the date of such
other event, as the case may be.
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SECTION 6. NOTICES. Any notice or other document required or permitted
to be given or delivered to holders of Warrants and holders of Common Stock
(or other Warrant Securities) shall be in writing and sent (a) by telecopy if
the sender on the same day sends a confirming copy of such notice by a
recognized overnight delivery service (charges prepaid), or (b) by registered
or certified mail with return receipt requested (postage prepaid) or (c) by a
recognized overnight delivery service (with charges prepaid).
(i) if to the Company, at Energy BioSystems Corporation, 0000
Xxxxxxxx Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000, Telecopy No.:
(000) 000-0000, or such other address as it shall have specified to the
holders of Warrants in writing; or
(ii) if to a holder, at its address set forth below, or such other
address as it shall have specified to the Company in writing.
Notices given under this Section 6 shall be deemed given only when actually
received.
SECTION 7. AMENDMENT. This Warrant may not be amended, modified or
otherwise altered in any respect except by the written consent of the
registered holder of this Warrant and the Company.
SECTION 8. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
and inure to the benefit of the Company and the holder of this Warrant and
their respective successors and permitted assigns.
SECTION 9. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to the conflicts of law principles thereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its name by its duly authorized officers and accepted by the holder
of this Warrant this 6th day of March, 1998.
ATTEST: ENERGY BIOSYSTEMS CORPORATION
By: By:
----------------------------- --------------------------------
Name: Xxxx X. Xxxxx, III Name:
Title: Secretary ------------------------------
Title:
-----------------------------
HOLDER:
--------------------------------
Address for Notices:
Xxxxx X. Xxxxx
Petro Star Inc.
000 Xxxxxx Xxxxx Xxxxxx #000
Xxxxxxxxx, Xxxxxx 00000
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ASSIGNMENT
TO BE EXECUTED BY THE REGISTERED HOLDER IF IT
DESIRES TO TRANSFER THE WARRANT
FOR VALUE RECEIVED, ___________ hereby sells, assigns and transfers
unto _____________________________ the right to purchase ________________
shares of ___________________ stock, evidenced by the within Warrant, and
does hereby irrevocably constitute and appoint ____________________________
Attorney to transfer the said Warrant on the books of the Company, with full
power and substitution.
----------------------------------
Signature
----------------------------------
----------------------------------
Address
Dated: _________________, 19____.
In the presence of:
---------------------------------
NOTICE
The signature of the foregoing Assignment must correspond to the
name as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER IF IT
DESIRES TO EXERCISE THE WARRANT
The undersigned hereby exercises the right to purchase ____________
shares of stock covered by this Warrant according to the conditions thereof
and herewith makes payment of the Purchase Price of such shares in full.
----------------------------------
Signature
----------------------------------
Name
----------------------------------
----------------------------------
Address
Dated: _________________, 19____.
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