THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY STATE SECURITIES
OR BLUE SKY LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR
EXEMPTIONS FROM SUCH REGISTRATION. THIS WARRANT MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN
THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE
BEEN COMPLIED WITH.
No. Right to Purchase Shares
--------- ----------
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ______________________________,
or registered assigns, is entitled to purchase from Mercury Montana, Inc., a
Delaware corporation (the "Company"), at any time or from time to time during
the period specified in Paragraph 2 hereof,___________________________________
(___________) fully paid andnonassessable shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), at an exercise price per
share of $1.25 (the "Exercise Price"). The term "Warrant Shares", as used
herein, refers to the shares of Common Stock purchasable hereunder. The
Warrant Shares and the Exercise Price are subject to adjustment as provided in
Paragraph 4 hereof. The term "Warrants", as used herein, shall mean this Stock
Purchase Warrant and all Stock Purchase Warrants issued in connection with any
transfer, exchange, or replacement thereof.
This Warrant is subject to the following terms, provisions, and conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part (but not as to a fractional Warrant Share), by the
surrender of this Warrant, together with a completed Exercise Agreement in the
form attached hereto, to the Company during normal business hours on any
business day at the Company's principal office in Fort Worth, Texas (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), and upon payment to the Company in cash or by certified or
official bank check of the Exercise Price for the Warrant Shares specified in
said Exercise Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or its designee as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement delivered, and payment made for
such shares as aforesaid. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in said Exercise
Agreement, shall be delivered to the
holder hereof within a reasonable time, not exceeding seven business days, after
this Warrant shall have been so exercised. The certificates so delivered shall
be in such denominations as may be requested by the holder hereof and shall be
registered in the name of said holder or such other name as shall be designated
by said holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of said certificates, deliver to said holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. The Company shall pay all taxes and other expenses
and charges payable in connection with the preparation, execution, and delivery
of stock certificates (and any new Warrants) pursuant to this Paragraph 1 except
that, in case such stock certificates shall be registered in a name or names
other than the holder of this Warrant, funds sufficient to pay all stock
transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the holder hereof to the
Company at the time of the delivery of such stock certificates by the Company as
mentioned above.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from
time to time after the date hereof and before 5:00 p.m. Fort Worth, Texas local
time on March 31, 2002.
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance, be
validly issued, fully paid, and nonassessable and free from all taxes, liens,
and charges with respect to the issue thereof.
(b) RESERVATION OF SHARES. During the period within which this Warrant
may be exercised, the Company will at all times have authorized, and reserved
for the purpose of issue upon exercise of this Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant.
4. PROTECTION AGAINST DILUTION. The number of shares of Common Stock
purchasable pursuant to the exercise of the rights under this Warrant and the
Exercise Price shall be adjusted as hereinafter set forth:
(a) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS, ETC. In case at any
time or from time to time after the date hereof the Company shall:
(i) fix a record date for the holders of its issued and outstanding
Common Stock for the purposes of entitling them to receive a dividend
payable in, or other distribution of, Common Stock, or
(ii) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or
2
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then, and in each such case the Exercise Price shall be adjusted to that price
determined by multiplying the Exercise Price in effect immediately prior to such
event by a fraction (i) the numerator of which shall be the total number of
outstanding shares of Common Stock immediately prior to such event, and (ii) the
denominator of which shall be the total number of outstanding shares of Common
Stock immediately after such event.
(b) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. Upon each adjustment in
the Exercise Price, pursuant to Paragraph 4(a) above, such number of shares of
Common Stock purchasable hereunder shall be adjusted by multiplying the number
of shares of Common Stock by a fraction, the numerator of which shall be the
Exercise Price immediately prior to such adjustment and the denominator of which
shall be the Exercise Price in effect upon such adjustment.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
(a) Prior to the expiration date of this Warrant, the Company shall not
consolidate with or merge into another corporation, or convey all or
substantially all of its assets to any other corporation or corporations,
whether affiliated or unaffiliated (any such corporation being included within
the meaning of the term "successor corporation"), or agree to so consolidate,
merge or convey assets unless and until prior to consummation of such
consolidation, merger or conveyance the successor corporation thereto shall
assume, by written instrument executed and mailed to the holder of this Warrant
at such time, the obligation to issue and deliver to such holder such shares of
stock, securities or property as, in accordance with the provisions of Paragraph
5(b) below, such holder shall be entitled to purchase or receive.
(b) In case of any capital reorganization or reclassification of the
Common Stock of the Company (or any other corporation the stock or other
securities of which are at the time receivable on the exercise of this Warrant)
after the date of execution of this Warrant or in case, after such date, the
Company (or any such other corporation) shall consolidate with or merge into
another corporation or convey all or substantially all its assets to another
corporation, then and in each such case the holder of this Warrant, upon
exercise, at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu of
the Common Stock of the Company (or such other corporation) the proportionate
share of all stock, securities or other property issued, paid or delivered for
or on all of the Common Stock of the Company (or such other corporation) as is
allocable to the shares of Common Stock then called for by this Warrant, as if
such holder had exercised this Warrant immediately prior thereto.
3
6. REGISTRATION RIGHTS.
(a) RIGHT TO PARTICIPATE IN REGISTRATIONS. If, at any time prior to the
expiration of two years from the last date on which this Warrant is validly
exercised, the Company proposes to register shares of Common Stock (as defined
in Paragraph 4 hereof) under the Securities Act of 1933, as amended (the
"Securities Act"), on Form X-0, X-0, or S-3 (or any form which replaces or is
substantially similar to such form), the Company shall each such time give
notice of such proposed registration to the holder of this Warrant, if this
Warrant has not yet expired, and to all holders of shares of Common Stock
acquired by reason of exercise of this Warrant. Subject to the terms and
provisions of this Paragraph 6, upon the request of any such holder ("Holder")
made within 20 days after the giving of such notice by the Company, the Company
shall use its best efforts to cause all shares of Common Stock that have been
acquired by such Holder pursuant to the exercise of this Warrant, and all shares
of Common Stock that will be acquired by such Holder pursuant to the exercise of
this Warrant not later than the fifth day prior to the filing of the
registration statement under the Securities Act, which shares such Holder shall
have requested to be included in the proposed registration ("Registrable
Shares"), to be included in such registration to the extent requisite to permit
the sale or other disposition by such Holder of such Registrable Shares. In the
event the offering to be conducted pursuant to the proposed registration is to
be an underwritten public offering, the registration rights provided in this
Paragraph 6 shall be subject to the approval of the managing underwriter or
underwriters of such offering, who shall determine the number of Registrable
Shares, if any, that may be included in such registration without adversely
affecting such offering.
(b) REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Paragraph 6 to use its best efforts to cause Registrable
Shares to be included in the registration of securities of the Company under the
Securities Act, the Company will, as expeditiously as possible:
(i) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement")
covering such Registrable Shares and use its best efforts to cause the
Registration Statement to become effective and to remain effective for so
long as may reasonably be necessary to complete the sale or other
disposition of such Registrable Shares, provided that the Company shall not
in any event be required to use its best efforts to maintain the
effectiveness of the Registration Statement for a period in excess of 90
days;
(ii) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus contained
therein as may be necessary to keep the Registration Statement effective,
and comply with the provisions of the Securities Act, with respect to the
sale or other disposition of such Registrable Shares whenever the Holders
thereof shall desire to sell or otherwise dispose of the same but only to
the extent provided in this Paragraph 6(b);
4
(iii) furnish to each Holder of such Registrable Shares such numbers of
copies of the Registration Statement, the prospectus contained therein
(including each preliminary prospectus), and each amendment and supplement
to the Registration Statement and such prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such
Holder may reasonably request in order to facilitate the sale or other
disposition of such Registrable Shares; and
(iv) before filing the Registration Statement, any prospectus to be
used in connection with the offering to be conducted pursuant to such
registration, or any amendments or supplements to the Registration
Statement or such prospectus with the Commission, furnish counsel to the
Holders of such Registrable Shares with copies of all such documents
proposed to be filed, which shall be subject to the reasonable approval of
such counsel.
(c) REQUIRED INFORMATION. The Company shall not be required to use its
best efforts to include any Registrable Shares in a proposed registration of its
securities under the Securities Act unless and until (i) the Holder of such
Registrable Shares furnishes to the Company such information regarding such
Holder and such Registrable Shares and the intended method of disposition of
such Registrable Shares as the Company shall reasonably request in order to
satisfy the requirements applicable to such registration, and (ii) in the event
the offering to be conducted pursuant to such registration is to be an
underwritten public offering, such Holder agrees to the terms of the
underwriting agreed to between the Company and the underwriter or underwriters
of such offering and executes all documents reasonably required to effect such
offering.
(d) EXPENSES OF REGISTRATION. In the event of the inclusion pursuant to
the provisions of this Paragraph 6 of Registrable Shares in a registration by
the Company of its securities under the Securities Act, the Holder of such
Registrable Shares shall pay any federal and blue sky filing and registration or
qualification fees attributable to such Holder's Registrable Shares, any
brokerage and underwriting discounts and commissions payable in respect of
Registrable Shares sold on such Holder's behalf, all fees and expenses of any
attorneys and accountants employed by such Holder, and any other costs directly
incurred by such Holder, and the Company shall pay or cause to be paid and shall
indemnify and hold harmless such Holder from and against any and all other costs
and expenses incurred in connection with such registration and related blue sky
registrations and qualifications.
(e) INDEMNIFICATION. In connection with any registration of Registrable
Shares pursuant to the provisions of this Paragraph 6, the Company shall
indemnify and hold harmless the Holder of such Registrable Shares to the extent
that companies generally indemnify and hold harmless underwriters in connection
with public offerings under the Securities Act, and such Holder shall indemnify
and hold harmless the Company, each director and officer of the Company, and
each person who controls the Company within the meaning of the Securities Act to
the extent that selling shareholders generally indemnify and hold harmless
issuers of securities in connection with public offerings under the Securities
Act
5
with respect to the written information provided by such Holder for use by the
Company in the preparation of the Registration Statement.
7. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax in respect thereof.
8. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
9. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(b) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this Warrant
in connection with any transfer, exchange, or replacement as provided in this
Paragraph 9, this Warrant shall be promptly cancelled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution, and
delivery of Warrants pursuant to this Paragraph 9.
(c) REGISTER. The Company shall maintain, at its principal office in Fort
Worth, Texas (or such other office or agency of the Company as it may designate
by notice to the holder hereof), a register for this Warrant, in which the
Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
(d) EXERCISE OR TRANSFER WITHOUT REGISTRATION. Anything in this Warrant
to the contrary notwithstanding, if, at the time of the surrender of this
Warrant in connection with any exercise, transfer, or exchange of this Warrant,
this Warrant or the Warrant Shares shall not be registered under the Securities
Act of 1933, as amended, and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such exercise, transfer, or
exchange, that (i) the holder or transferee of this Warrant, as the case may be,
furnish to the Company a written opinion of counsel, which opinion and counsel
are acceptable to the Company, to the effect that such exercise, transfer, or
exchange may be
6
made without registration under said Act and under applicable state securities
or blue sky laws and (ii) the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company.
The holder of this Warrant, by taking and holding the same, represents to the
Company that such holder is acquiring this Warrant for investment and not with a
view to the distribution thereof.
10. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail, postage prepaid and addressed, to such holder at the address
shown for such holder on the books of the Company, or at such other address as
shall have been furnished to the Company by notice from such holder. All
notices, requests, and other communications required or permitted to be given or
delivered hereunder to the Company shall be in writing, and shall be personally
delivered, or shall be sent by certified or registered mail, postage prepaid and
addressed, to the office of the Company at 0000 Xxxxxxxxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxx 00000, Attention: President, or at such other address as shall have been
furnished to the holder of this Warrant by notice from the Company. Any such
notice, request, or other communication may be sent by telegram or telex, but
shall in such case be subsequently confirmed by a writing personally delivered
or sent by certified or registered mail as provided above. All notices,
requests, and other communications shall be deemed to have been given either at
the time of the delivery thereof to (or the receipt by, in the case of a
telegram or telex) the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 10, or, if mailed, at the completion
of the third full day following the time of such mailing thereof to such
address, as the case may be.
11. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
12. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific enforcement of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
13. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may not be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party (or any predecessor in interest thereof) against which
enforcement of the same is sought.
7
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all the Company's assets. This warrant is not assignable or
transferable except upon the death of the holder hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as
of March ____, 1997.
Mercury Montana, Inc.
By
-----------------------------------------
8
FORM OF EXERCISE AGREEMENT
Dated: , 19 .
----------- --
To:
---------------------
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase __________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of $____________. Please issue a certificate or certificates for such
shares of Common Stock in the name of the undersigned and pay any cash for any
fractional share to the undersigned.
Name:
--------------------------------
Signature:
---------------------------
Title of Signing Officer or Agent (if
any):
--------------------------------
Note: The above signature should correspond exactly
with the name on the face of the within
Warrant or with the name of the assignee
appearing in the assignment form.
9
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:
Name of Assignee Address No. Of Shares
---------------- ------- -------------
, and hereby irrevocably constitutes and appoints ____________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: , 19 .
-------------------- --
In the presence of
------------------
Name:
--------------------------------
Signature:
---------------------------
Title of Signing Officer or Agent
(if any):
----------------------------
Address:
----------------------
----------------------
Note: The above signature should correspond
exactly with the name on the face of the
within Warrant.
10
