UNITED FUEL & ENERGY CORPORATION
UNITED
FUEL & ENERGY CORPORATION
NEITHER
THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR TRANSFERRED
IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
THE
ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Warrant
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Date:
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_________
Shares
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________,
200_
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UNITED
FUEL & ENERGY CORPORATION
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WARRANT
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UNITED
FUEL & ENERGY CORPORATION, a Nevada corporation (“Company”), for value
received hereby grants this warrant (“Warrant”) to [Purchaser], or registered
assigns (the “Holder”). The Warrant entitles the Holder to purchase from Company
at any time prior to the Expiration Date (as defined below) up to [ ] shares
of
common stock of Company (“Common Stock”). The exercise price for the Warrant
shall be $____ per share of Common Stock (the “Exercise Price”). This Warrant
shall be issued in connection with the Securities Purchase Agreement entered
into by Holder and Company as of this date.
1. Expiration
Date; Exercise
1.1 Exerciseability.
The
Warrant granted hereunder shall be fully exercisable as of the date
hereof.
1.2 Expiration
Date.
The
Warrant shall expire on the fifth (5) anniversary of the date of this Warrant
set forth on the first page. After the Expiration Date, the Warrant shall expire
and be of no further force or effect.
1.3 Callable
Warrant.
If
during any consecutive 20 trading day period (after the effectiveness of the
registration statement if applicable), the Common Stock of Company closes at
the
prices set forth in the following table (“Trading Price”), the Warrant shall be
callable upon 10 days written notice at $0.01 per share, in the following
amounts:
Number
of Warrants callable
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Trading
Price
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½
of Warrants
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$____
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½
of Warrants
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$____
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If
Company has called the applicable Warrants, then Holder shall exercise such
Warrants at $____ per share. If Holder does not exercise such Warrants when
called within 10 days of receiving notice, then such Warrants shall immediately
expire after such 10 day period.
2. Adjustments
of Exercise Price and Number and Kind of Conversion Shares
2.1 In
the
event that Company shall at any time hereafter (a) pay a dividend in Common
Stock or securities convertible into Common Stock; (b) subdivide or split its
outstanding Common Stock; (c) combine its outstanding Common Stock into a
smaller number of shares; (d) spin-off to its shareholders a subsidiary or
operating-business unit; then the number of shares to be issued immediately
after the occurrence of any such event shall be adjusted so that the Holder
thereafter may receive the number of shares of Common Stock or the equivalent
value it would have owned immediately following such action if it had exercised
the Warrant immediately prior to such action and the Exercise Price shall be
adjusted to reflect such proportionate increases or decreases in the number
of
shares.
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2.2 In
case
of any reclassification of the outstanding shares of Common Stock (other than
a
change covered by Section 2.1 hereof or a change which solely affects the par
value of such shares) or in the case of any merger or consolidation or merger
in
which Company is not the continuing corporation and which results in any
reclassification or capital reorganization of the outstanding shares), the
holder shall have the right thereafter (until the Expiration Date) to receive
upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property receivable upon such reclassification,
capital reorganization, merger or consolidation, by a holder of the number
of
shares of Common Stock obtainable upon the exercise of the Warrant immediately
prior to such event; and if any reclassification also results in a change in
shares covered by Section 2.1, then such adjustment shall be made pursuant
to
both this Section 2.2 and Section 2.1. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, capital reorganizations
and mergers or consolidations, sales or other transfers.
3. Transfer.
Subject
to
compliance with applicable securities laws, the Warrant is transferable in
person, or by duly authorized attorney, upon surrender of this Warrant properly
endorsed and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. If less than all of the Warrant is
transferred, Company will, upon transfer, execute and deliver to the Holder
a
new certificate for the portion of the Warrant not so transferred.
4. Reservation
of Shares. Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, such number of shares of Common
Stock as shall from time to time be issuable upon exercise of the Warrant.
If at
any time the number of authorized but unissued shares of Common Stock shall
not
be sufficient to permit the exercise of the Warrant, Company shall promptly
seek
such corporate action as may necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for
such
purpose.
5. Certificate
as to Adjustments. In each case of any adjustment in the Exercise Price, or
number or type of shares issuable upon exercise of the Warrant, Company shall
compute such adjustment in accordance with the terms of the Warrant and prepare
a certificate setting forth such adjustment and showing in detail the facts
upon
which such adjustment is based, including a statement of the adjusted Exercise
Price. Company shall promptly send (by facsimile and by either first class
mail,
postage prepaid or overnight delivery) a copy of each such certificate to the
Holder.
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6. Loss
or
Mutilation. Upon receipt of evidence reasonably satisfactory to Company of
the
ownership of and the loss, theft, destruction or mutilation of this Warrant,
and
of indemnity reasonably satisfactory to it, and (in the case of mutilation)
upon
surrender and cancellation of the Warrant, Company will execute and deliver
in
lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or
mutilated Warrant.
7. Representations
and Warranties of Company. Company hereby represents and warrants to Holder
that:
7.1 Due
Authorization.
All
corporate action on the part of Company, its officers, directors and
shareholders necessary for (a) the authorization, execution and delivery of,
and
the performance of all obligations of Company under this Warrant, and (b) the
authorization, issuance, reservation for issuance and delivery of all of the
Common Stock issuable upon exercise of this Warrant, has been duly taken. This
Warrant constitute a valid and binding obligation of Company enforceable in
accordance with their terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium, reorganization and similar laws
affecting creditors’ rights generally and to general equitable
principles.
7.2 Organization.
Company
is a corporation duly organized, validly existing and in good standing under
the
laws of the Nevada and has all requisite corporate power to grant this
Warrant.
7.3 Valid
Issuance of Stock.
Any
shares of Common Stock issued upon exercise of this Warrant will be duly and
validly issued, fully paid and non-assessable.
7.4 Governmental
Consents.
All
consents, approvals, orders, authorizations or registrations, qualifications,
declarations or filings with any federal or state governmental authority on
the
part of Company required in connection with the consummation of the transactions
contemplated herein have been obtained.
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8. Notices
of Record Date. In
case,
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant), for
the
purpose:
8.1 of
entitling them to receive any dividend or other distribution, or any right
to
subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right; or
8.2 of
any
consolidation or merger of Company with or into another corporation, any capital
reorganization of Company, any reclassification of the capital stock of Company,
or any conveyance of all or substantially all of the assets of Company to
another corporation in which holders of Company stock are to receive stock,
securities or property of another corporation; or
8.3 of
any
voluntary dissolution, liquidation or winding-up of Company; or
8.4 of
any
redemption or conversion of all outstanding Common Stock; then, and in each
such
case, Company will mail or cause to be mailed to the Holder a copy of the notice
with respect to the foregoing received by it from Company specifying, as the
case may be, (a) the date on which a record is to be taken for the purpose
of
such dividend, distribution or right, or (b) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation, winding-up, redemption or conversion is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock or (such stock or securities as at the time are receivable upon the
exercise of this Warrant), shall be entitled to exchange their shares of Common
Stock (or such other stock or securities), for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up. Company shall use all
reasonable efforts to ensure such notice shall be delivered at least 15 days
prior to the date therein specified.
9. Severability.
If any
term, provision, covenant or restriction of the Warrant is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of the Warrant shall remain
in
full force and effect and shall in no way be affected, impaired or invalidated
to the same extent as if Company is owner of the underlying Common
Stock.
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10. Notices.
All notices, requests, consents and other communications required hereunder
shall be in writing and by first class mail or by registered or certified mail,
postage prepaid, return receipt requested, and (other than in connection with
the exercise of the Warrant) shall be deemed to have been duly made when
received or, if sent registered or certified mail, postage prepaid, return
receipt requested, on the third day following deposit in the mails: if addressed
to the Holder, to the address set forth on the Securities Purchase Agreement
between the Holder and Company; and if addressed to Company, Attention,
President, 000 Xxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 or such other
address as it may designate in writing.
11. No
Rights
as Shareholder. The Holder shall have no rights as a shareholder of Company
with
respect to the shares issuable upon exercise of the Warrant until the actual
exercise hereunder.
UNITED
FUEL & ENERGY CORPORATION
By:
__________________________________
Xxxxxxx
X. XxXxxxxx, President and Chief Executive Officer
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EXHIBIT
“A”
NOTICE
OF
EXERCISE
(To
be signed only upon exercise of the Warrant)
To: UNITED
FUEL & ENERGY CORPORATION.
The
undersigned hereby elects to purchase shares of Common Stock (the “Warrant
Shares”) of UNITED FUEL & ENERGY CORPORATION. (“Company”), pursuant to the
terms of the enclosed Warrant (the “Warrant”). The undersigned tenders herewith
payment of the exercise price pursuant to the terms of the Warrant.
The
undersigned hereby represents and warrants to, and agrees with Company as
follows:
1. Holder
is
acquiring the Warrant Shares for its own account, for investment purposes
only.
2. Holder
understands that an investment in the Warrant Shares involves a high degree
of
risk, and Xxxxxx has the financial ability to bear the economic risk of this
investment in the Warrant Shares, including a complete loss of such investment.
Holder has adequate means for providing for its current financial needs and
has
no need for liquidity with respect to this investment.
3. Holder
has such knowledge and experience in financial and business matters that it
is
capable of evaluating the merits and risks of an investment in the Warrant
Shares and in protecting its own interest in connection with this
transaction.
4. Holder
understands that the Warrant Shares have not been registered under the
Securities Act or under any state securities laws. Holder is familiar with
the
provisions of the Securities Act and Rule 144 thereunder and understands that
the restrictions on transfer on the Warrant Shares may result in Holder being
required to hold the Warrant Shares for an indefinite period of
time.
5. Xxxxxx
agrees not to sell, transfer, assign, gift, create a security interest in,
or
otherwise dispose of, with or without consideration (collectively, “Transfer”)
any of the Warrant Shares except pursuant to an effective registration statement
under the Securities Act or an exemption from registration. As a further
condition to any such Transfer, except in the event that such Transfer is made
pursuant to an effective registration statement under the Securities Act, if
in
the reasonable opinion of counsel to Company any Transfer of the Warrant Shares
by the contemplated transferee thereof would not be exempt from the registration
and prospectus delivery requirements of the Securities Act, Company may require
the contemplated transferee to furnish Company with an investment letter setting
forth such information and agreements as may be reasonable requested by Company
to ensure compliance by such transferee with the Securities Act.
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Until
the
effectiveness of the registration statement each certificate evidencing the
Warrant Shares will bear the following legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS
AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Number
of Warrant Exercised: ________
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Dated:
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[Name]
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