NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY.
COMMON STOCK PURCHASE WARRANT
To Purchase 191,250 Shares of Common Stock of
Houston American Energy Corp.
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES that, for
value received, Northeast Securities, Inc. (the "Holder"), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after May 4, 2005 (the "Initial Exercise Date") and
on or prior to the close of business on the third anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from Houston American Energy Corp., a corporation incorporated in the
State of Delaware (the "Company"), up to 191,250 shares (the "Warrant Shares")
of Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"). The purchase price of one share of Common Stock (the "Exercise Price")
under this Warrant shall be $1.00 subject to adjustment hereunder. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable
shall be subject to adjustment as provided herein.
1. Title to Warrant. Prior to the Termination Date and subject to
----------------
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
2. Authorization of Shares. The Company covenants that all Warrant Shares
-----------------------
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant.
-------------------
(a) Exercise of the purchase rights represented by this Warrant may be
made at any time or times on or after the Initial Exercise Date and on or before
the Termination Date by delivery to the Company of a duly executed facsimile
copy of the Notice of Exercise Form
annexed hereto (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such
Holder appearing on the books of the Company); provided, however, within 5
trading days of the date said Notice of Exercise is delivered to the Company,
the Holder shall have surrendered this Warrant to the Company and the Company
shall have received payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier's check drawn on a United States
bank. Certificates for shares purchased hereunder shall be delivered to the
Holder within 10 trading days from the delivery to the Company of the Notice of
Exercise Form by facsimile copy, surrender of this Warrant and payment of the
aggregate Exercise Price as set forth above.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share that Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
---------------------------
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books or
----------------
records in any manner that prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
----------------------------------
(a) Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 1 and 7(e) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company, together with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
2
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants. The Holder
may change its address as shown on the registration by written notice to the
Company requesting such change.
(e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
acceptable to the Company) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities or
blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act. Notwithstanding anything herein to the
contrary, the Holder shall have the absolute and unconditional right to assign
this Warrant, in part or in whole, to is officer, directors and employees.
8. Supplying Information. The Company shall cooperate with each Holder of
---------------------
a Warrant and each holder of restricted Common Stock issued upon exercise
thereof in supplying such information as may be reasonably necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the SEC and other regulatory authorities as a condition to
the availability of an exemption from the Securities Act for the sale of any
Warrant or Warrant Shares
9. Limitation of Liability. No provision hereof, in the absence of
-----------------------
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of such Holder for the purchase price of any Common Stock or as
a stockholder of Company, whether such liability is asserted by Company or by
creditors of Company.
3
10. No Rights as Shareholder until Exercise. This Warrant does not entitle
---------------------------------------
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.
11. Piggyback Registration Rights.
-----------------------------
(a) The Company covenants and agrees with any holder of the Warrants
or Warrant Shares (the "Registrable Securities") that if, at any time within the
period commencing on the Initial Exercise Date and ending on the Termination
Date, it proposes to file a registration statement with respect to any class of
equity or equity-related security (other than in connection with an offering to
the Company's employees or in connection with an acquisition, merger or similar
transaction) under the Securities Act in a primary registration on behalf of the
Company and/or in a secondary registration on behalf of holders of such
securities and the registration form to be used may be used for registration of
the Registrable Securities, the Company will give prompt written notice (which,
in the case of a registration statement pursuant to the exercise of demand
registration rights shall be within ten (10) business days after the Company's
receipt of notice of such exercise and, in any event, shall be at least 30 days
prior to such filing) to the holders of Registrable Securities at the addresses
appearing on the records of the Company of its intention to file a registration
statement and will offer to include in such registration statement all, but not
less than 20% of the Registrable Securities, subject to paragraphs (i) and (ii)
of this Section 11(a), such number of Registrable Securities with respect to
which the Company has received written requests for inclusion therein within ten
(10) days after the giving of notice by the Company. All registrations
requested pursuant to this Section 11(a) are referred to herein as "Piggyback
Registrations". All Piggyback Registrations pursuant to this Section 11 will be
made solely at the Company's expense. This Section is not applicable to a
registration statement filed by the Company on Forms S-4 or S-8 or any successor
forms.
(i) Priority on Primary Registrations. If a Piggyback
---------------------------------
Registration includes an underwritten primary registration on behalf of the
Company and the underwriter(s) for such offering determines in good faith
and advises the Company in writing that in its/their opinion the number of
Registrable Securities requested to be included in such registration
exceeds the number that can be sold in such offering without materially
adversely affecting the distribution of such securities by the Company, the
Company will include in such registration (A) first, the securities that
the Company proposes to sell and (B) second, the Registrable Securities
requested to be included in such registration, apportioned pro rata among
the holders of the Registrable Securities and holders of other securities
requesting registration.
(ii) Priority on Secondary Registrations. If a Piggyback
-----------------------------------
Registration consists only of an underwritten secondary registration on
behalf of holders of securities of the Company, and the underwriter(s) for
such offering advises the Company in writing that in its/their opinion the
number of Registrable Securities requested to be included in such
registration exceeds the number which can be sold in such offering without
materially adversely affecting the distribution of such securities, the
Company will include in such registration (A) first, the securities
requested to be included therein by the
4
holders requesting such registration, and (B) second, the Registrable
Securities requested to be included in such registration and securities of
holder of other securities requested to be included in such registration
statement, pro rata among all such holders on the basis of the number of
shares requested to be included by each such holder, provided, however, the
Company will use its best efforts to include not less than 20% of the
Registrable Securities.
Notwithstanding the foregoing, if any such underwriter shall determine in good
faith and advise the Company in writing that the distribution of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely affect the
distribution of such securities by the Company, then the holders of such
Registrable Securities shall delay their offering and sale for such period
ending on the earliest of (1) 90 days following the effective date of the
Company's registration statement, (2) the day upon which the underwriting
syndicate, if any, for such offering shall have been disbanded or, (3) such date
as the Company, managing underwriter and holders of Registrable Securities shall
otherwise agree. In the event of such delay, the Company shall file such
supplements, post-effective amendments and take any such other steps as may be
necessary to permit such holders to make their proposed offering and sale for a
period of 120 days immediately following the end of any such period of delay.
If any party disapproves the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company, the underwriter, and the
holder. Notwithstanding the foregoing, the Company shall not be required to
file a registration statement to include shares pursuant to this Section 11 if
independent counsel, reasonably satisfactory to the Company, renders an opinion
to the Company that the Registrable Securities proposed to be disposed of may be
transferred pursuant to the provisions of Rule 144 under the Securities Act or
otherwise without registration under the Securities Act.
(b) In connection with the registration of Registrable Securities
hereunder, the Company agrees to (i) bear the expenses of any registration;
provided, however, that in no event shall the Company be obligated to pay (A)
any fees and disbursements of special counsel for holders of Registrable
Securities, (B) any underwriters' discount or commission in respect of such
Registrable Securities, and (C) any stock transfer taxes attributable to the
sale of the Registrable Securities; (ii) use its best efforts to register or
qualify the Registrable Securities for offer or sale under state securities or
Blue Sky laws of such jurisdictions in which such holders shall reasonably
request, provided, however, that no qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to service
of general process or to taxation as a foreign corporation doing business in
such jurisdiction to which it is not then subject; and (iii) enter into a
cross-indemnity agreement, in customary form, with each underwriter, if any, and
each holder of securities included in such registration statement.
(c) The Company's obligations under this Section 11 shall be
conditioned upon a timely receipt by the Company in writing of: (i) information
as to the terms of such public offering furnished by or on behalf of each holder
of Registrable Securities intending to make a public offering of his, her or its
Registrable Securities, and (ii) such other information as the Company may
reasonably require from such holders, or any underwriter for any of them, for
inclusion in such registration statement.
5
12. Loss, Theft, Destruction or Mutilation of Warrant. The Company
-------------------------------------------------
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
13. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
---------------------------------
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.
14. Stock Splits. The number and kind of securities purchasable upon the
------------
exercise of this Warrant and the Exercise Price shall be subject to adjustment
from time to time upon the happening of any of the following. In case the
Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
15. Certain Other Distributions. If at any time Company shall declare,
---------------------------
order, pay or make a dividend or other distribution on its Common Stock payable
in securities of the Company (other than dividends or distributions of shares of
Common Stock which are referred to in Section 14) or payable in cash or other
property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the registered Holder would have been entitled to receive
had this Warrant been exercised for Common Stock on the date of such event and
had the registered Holder thereafter, during the period from the date of such
event to and including the Initial Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 15 with respect to the rights of the registered Holder.
6
16. Additional Issuances.
--------------------
(a) Issuances of Additional Common Stock. If at any time Company shall
-------------------------------------
issue or sell any Additional Shares of Common Stock in exchange for
consideration in an amount per Additional Share of Common Stock less than the
Current Warrant Price at the time the Additional Shares of Common Stock are
issued, then the Current Warrant Price as to the number of shares for which this
Warrant is exercisable prior to such adjustment shall be reduced to a price
determined by dividing (A) an amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Current Warrant Price, plus (y) the
consideration, if any, received by Company upon such issue or sale, by (B) the
total number of shares of Common Stock outstanding immediately after such issue
or sale; provided that, (x) for the purpose of this Section 16, all shares of
-------------
Common Stock issuable upon exercise, conversion or exchange of Convertible
Securities outstanding immediately prior to such issue shall be deemed to be
outstanding, and (y) the number of shares of Common Stock deemed outstanding
pursuant to clause (x) above upon exercise, conversion or exchange of such
outstanding Convertible Securities shall not give effect to any adjustments to
the exercise, conversion or exchange price or exercise, conversion or exchange
rate of such Convertible Securities resulting from the issuance of Additional
Shares of Common Stock that is the subject of this calculation.
(b) Issuances of Warrants of Other Rights. If at any time Company
--------------------------------------
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Company is the surviving
corporation) issue or sell, any warrants or other rights to subscribe for or
purchase any Additional Shares of Common Stock or any Convertible Securities
(other than Permitted Issuances), whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of such warrants or other
rights or upon conversion or exchange of such Convertible Securities shall be
less than the Current Warrant Price in effect immediately prior to the time of
such record, issue or sale, then the Current Warrant Price shall be adjusted as
provided in Section 16(a) on the basis that the maximum number of Additional
Shares of Common Stock issuable pursuant to all such warrants or other rights or
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued and outstanding and Company shall
have received all of the consideration payable therefor, if any, as of the date
of the issuance of such warrants or other rights.
(c) Issuances of Convertible Securities. If at any time Company
-----------------------------------
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Company is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Current Warrant Price in effect immediately
prior to the time of such record, issue or sale, then the Current Warrant Price
shall be adjusted as provided in Section 16(a) on the basis that the maximum
number of Additional Shares of Common Stock necessary to effect the conversion
or exchange of all such Convertible Securities shall be deemed to have been
issued and outstanding and Company shall have received all of the consideration
payable therefor, if any, as of the date
7
of issuance of such Convertible Securities. No adjustment of the Current Warrant
Price shall be made under this Section 16(c) upon the issuance of any
Convertible Securities which are issued pursuant to the exercise of any warrants
or other subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 16(b). If any issue or sale of Convertible Securities is
made upon exercise of any warrant or other right to subscribe for or to purchase
any such Convertible Securities for which adjustments of the Current Warrant
Price have been or are to be made pursuant to Section 16(b), no further
adjustments of the Current Warrant Price shall be made by reason of such record,
issue or sale.
17. Reorganization, Reclassification, Merger, Consolidation or Disposition
----------------------------------------------------------------------
of Assets. In case the Company shall reorganize its capital, reclassify its
---------
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation ("Other Property"), are to be received by or distributed
to the holders of Common Stock of the Company, then the Holder shall have the
right thereafter to receive, at the option of the Holder, (a) upon exercise of
this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) cash equal to the value of this Warrant
as determined in accordance with the Black Scholes option pricing formula. In
case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in
good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 17. For purposes of this Section 17, "common stock of the
successor or acquiring corporation" shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 17 shall similarly
apply to successive reorganizations, reclassifications, mergers, consolidations
or disposition of assets.
18. Voluntary Adjustment by the Company. The Company may at any time during
-----------------------------------
the term of this Warrant reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.
8
19. Notice of Adjustment. Whenever the number of Warrant Shares or number
--------------------
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
20. Authorized Shares. The Company covenants that during the period the
-----------------
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the trading market upon
which the Common Stock may be listed.
21. Miscellaneous.
-------------
(a) Certain Defined Terms.
---------------------
"Additional Shares of Common Stock" means shares of Common Stock
---------------------------------
issued by Company after the date of this Warrant other than Permitted Issuances
(as defined below)
"Convertible Securities" means any option, warrant or share of
----------------------
preferred stock of Company or any other security, in any case, which is
convertible into or exercisable or exchangeable for Additional Shares of Common
Stock, either immediately or upon the occurrence of a specified date or a
specified event.
"Current Warrant Price" means, in respect of a share of Common Stock
---------------------
on any date herein specified, the price at which a share of Common Stock may be
purchased pursuant to this Warrant on such date.
"Permitted Issuances" means shares of Common Stock issued or issuable
-------------------
upon conversion, exchange, or exercise of any Convertible Securities outstanding
on the issue date of this Warrant.
(b) Jurisdiction. All questions concerning the construction, validity,
------------
enforcement and interpretation of this Warrant shall be determined in accordance
with the substantive laws of the State of Texas without giving effect to any
choice or conflict of law provision or rule. Any legal action or proceeding
with respect to this Warrant may be brought in the courts of the State of Texas
and the United States of America located in the City of Houston, Texas, U.S.A.
and, by execution and/or acceptance of this Warrant, the parties hereto accept
the jurisdiction of the aforesaid courts and irrevocably waive any objection,
including, without limitation, any objection to the venue or based on the
grounds of forum non conveniens, which it
9
may now or hereafter have to the bringing of any such action or proceeding in
such respective jurisdictions.
(c) Restrictions. The Holder acknowledges that the Warrant Shares
------------
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(d) Nonwaiver and Expenses. No course of dealing or any delay or
----------------------
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(e) Notices. All notices, demands and requests of any kind to be
-------
delivered to any party in connection with this Warrant shall be in writing and
shall be deemed to have been duly given if personally delivered or if sent by
internationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
if to the Company, to: Houston American Energy Corp.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: President
if to the Holder, to: the address of the Holder(s) appearing
in the Company's records from time to time
or to such other address as the party to whom notice is to be given may have
furnished to the other parties to this Warrant in writing in accordance with the
provisions of this Section 21(e). Any such notice or communication shall be
deemed to have been received (i) in the case of personal delivery, on the date
of such delivery, (ii) in the case of internationally-recognized overnight
courier, on the next business day after the date when sent, and (iii) in the
case of mailing, on the third business day following that on which the piece of
mail containing such communication is posted.
(f) Limitation of Liability. No provision hereof, in the absence of
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any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
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(g) Remedies. The Holder, in addition to being entitled to exercise
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all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(h) Successors and Assigns. Subject to applicable securities laws,
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this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(i) Amendment. This Warrant may be modified or amended or the
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provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this Warrant
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the
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convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: May ___, 2005
Houston American Energy Corp.
By: ________________________
Name: Xxxx Xxxxxxxxxxx
Title: President
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NOTICE OF EXERCISE
To: Houston American Energy Corp.
(1) The undersigned hereby elects to purchase ________ Warrant Shares
of Houston American Energy Corp. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[_] cashier's check (enclosed herewith); or
[_] wire transfer.
(3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
_________________________________________________
The Warrant Shares shall be delivered to the following:
_________________________________________________
_________________________________________________
_________________________________________________
(4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[PURCHASER]
By: _______________________
Name:
Title:
Dated: ___________________
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to _____________________________________ whose address is
____________________________________________.
Dated: ______________, _______
Holder's Signature: _____________________________
Holder's Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
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