THIS WARRANT (THE "WARRANT") AND COMMON STOCK ISSUABLE UPON
THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED OR SOLD UNLESS SAME ARE REGISTERED UNDER THE
ACT OR AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
Void after 5:00 P.M., New York, New York USA Time, on December 20,
2002 (the "Termination Date")
Warrant to Purchase 4,560,200 Shares of Common Stock, $.001par value
WARRANT TO PURCHASE COMMON STOCK
TO BE ISSUED BY
DOVER PETROLEUM CORP.
This is to Certify that, FOR VALUE RECEIVED, Xxxxxx Xxxxx or
assigns (the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from Dover Petroleum Corp., a Nevada
corporation ("Company"),Four Million Five Hundred Sixty Thousand Two
Hundred (4,560,200) shares of Common Stock, $.001 par value (the
"Shares") at a price of eighty cents (US$0.80) per Share at any time
or from time to time during the period from the date hereof until
5:00 P.M., New York, New York USA time on the Termination Date. The
number of Shares to be received upon the exercise of this Warrant
and the price to be paid for each such Share may be adjusted from
time to time as hereinafter set forth. The Shares deliverable upon
such exercise, and as adjusted from time to time, are hereinafter
sometimes referred to as "Warrant Shares" and the exercise price of
this Warrant as in effect at any time and as adjusted from time to
time is hereinafter sometimes referred to as the "Exercise Price".
1. Exercise of Warrant. This Warrant may be exercised
in whole or in part at any time or from time to time on or after the
date hereof and until 5:00 P.M., New York, New York USA time on the
Termination Date (the "Exercise Period"); provided, however, that
(1) if such Termination Date is a day on which banking institutions
in the State of New York are authorized by law to close, then the
Termination Date shall become the next succeeding day on which
banking institutions in the State of New York are open for business,
and (2) in the event of any merger, consolidation or sale of
substantially all the assets of the Company as an entirety that
results in any distribution to the Company's stockholders on or
before the Termination Date, the Holder shall have the right to
exercise this Warrant commencing at such time through the
Termination Date which shall entitle the Holder to receive, in lieu
of Shares, the kind and amount of securities and property (including
cash) receivable by a holder of the number of shares of Shares into
which this Warrant might have been exercisable immediately prior
thereto. This Warrant may be exercised by presentation and
surrender hereof to the Company at its principal office, or at the
office of its stock transfer agent, if any, with the purchase form
annexed hereto (the "Purchase Form"), duly executed and accompanied
by payment of the Exercise Price for the number of Warrant Shares
specified in such Purchase Form. As soon as practicable after each
such exercise of the Warrants, but not later than seven (7) days
from the date of such exercise, the Company shall issue and deliver
to the Holder a certificate representing the securities constituting
the Warrant Shares issuable upon such exercise, registered in the
name of the Holder or such Xxxxxx's designee. If this Warrant
should be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable thereunder. Upon receipt by the
Company of this Warrant at its office, or by the stock transfer
agent of the Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that
certificates representing such shares of Common Stock shall not then
be physically delivered to the Holder.
2. Reservation of Shares. The Company shall at all
times reserve for issuance and/or delivery upon exercise of this
Warrant such number of shares of its Common Stock as shall be
required for issuance and delivery upon exercise of this Warrant.
3. Fractional Shares.
(a) No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
With respect to any fraction of a Share called for upon any
exercise hereof, the Company shall pay to the Holder an amount in
cash equal to such fraction multiplied by the current market value
of a Share, determined as follows:
(b) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on
such exchange or listed for trading on the NASDAQ Stock Market
system, the current market value shall be the last reported sale
price of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant, or if no
such sale is made on such day, the average closing bid and asked
prices for such day on such exchange or system; or
(c) If the Common Stock is not so listed or admitted to
unlisted trading privileges but bid and asked prices are reported by
the National Quotation Bureau, Inc., or any successor thereto, the
current market value shall be the mean of the last reported high bid
and low asked prices reported by the National Quotation Bureau,
Inc., or any successor thereto, on the last business day prior to
the date of the exercise of this Warrant; or
(d) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount not less than
book value thereof as of the end of the fiscal quarter of the
Company ending immediately prior to the date of the exercise of the
Warrant.
4. Exchange, Transfer, Assignment or Loss of Warrant.
This Warrant is exchangeable, without expense, at the option of the
Holder, upon presentation and surrender hereof to the Company or at
the office of its stock transfer agent, if any, for other warrants
of different denominations entitling the holder thereof to purchase
in the aggregate the same number of shares of Common Stock
purchasable hereunder. The term "Warrant" as used herein includes
any Warrants into which this Warrant may be divided or exchanged.
Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new
Warrant of like tenor and date. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost,
stolen, destroyed or mutilated shall be at any time enforceable by
anyone.
5. Rights and Liabilities of the Holder. The Holder
shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in the Warrant
and are not enforceable against the Company except to the extent set
forth herein. No provision of this Warrant, in the absence of
affirmative action by the Holder to purchase the Warrant Shares, and
no mere enumeration herein of the rights or privileges of the Holder
shall give rise to any liability of the 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.
6. Adjustments, Notice Provisions and Restrictions on
Issuance of Additional Securities.
(a) Adjustment of Exercise Price. The Exercise Price
in effect from time to time shall be subject to adjustment, as follows:
(1) In case the Company shall:
(A) declare a dividend or make a distribution
on the outstanding shares of its capital stock that is
payable in shares of its Common Stock;
(B) subdivide, split or reclassify the
outstanding shares of its Common Stock into a greater number
of shares, or
(C) combine or reclassify the outstanding
shares of its Common Stock into a smaller number of shares,
then the Exercise Price in effect immediately after the
record date for such dividend or distribution or the
effective date of such subdivision, combination or
reclassification shall be adjusted so that it shall equal
the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the number of shares of Common
Stock outstanding immediately before such dividend,
distribution, split, subdivision, combination or
reclassification, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately
after such dividend, distribution, split, subdivision,
combination or reclassification. Any shares of Common Stock
issuable in payment of a dividend shall be deemed to have
been issued immediately prior to the record date for such
dividend for purposes of calculating the number of
outstanding shares of Common Stock of the Company under this
Paragraph 6. Such adjustment shall be made successively
upon the occurrence of each event specified above.
(2) In case the Company fixes a record date
for the issuance to holders of its Common Stock of rights,
options, warrants or convertible or exchangeable securities
generally entitling such holders to subscribe for or
purchase shares of Common Stock at a price per share less
than the Current Market Price (as such term is defined in
Paragraph 6.(a)(4) hereof) per share of Common Stock on such
record date, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the price
determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of
which shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered would purchase
at the Current Market Price per share, and the denominator
of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription
or purchase. Such adjustment shall be made successively on
each date whenever a record date is fixed. To the extent
that any such rights, options, warrants or convertible or
exchangeable securities are not so issued or expire
unexercised, the Exercise Price then in effect shall be
readjusted to the Exercise Price which would then be in
effect if such unissued or unexercised rights, options,
warrants or convertible or exchangeable securities had not
been issuable.
(3) In case the Company fixes a record date
for the making of a distribution to all holders of shares of
its Common Stock:
(A) of shares of any class of capital stock
other than its Common Stock; or
(B) of evidences of its indebtedness; or
(C) of assets other than extraordinary cash
dividends or distributions, and dividends or distributions
referred to in Paragraph 6.(a)(1) hereof; or
(D) of rights, options, warrant or convertible
or exchangeable securities (excluding those rights, options,
warrants or convertible or exchangeable securities referred
to in Paragraph 6.(a)(2) hereof),
then in each such case the Exercise Price in effect
immediately thereafter shall be determined by multiplying
the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding on such record date
multiplied by the Current Market Price (as such term is
defined in Paragraph 6.(a)(4) hereof) per share on such
record date, less the aggregate fair market value as
determined in good faith by the Board of Directors of the
Company of said shares or evidences of indebtedness or
assets or rights, options, warrants or convertible or
exchangeable securities so distributed, and the denominator
of which shall be the total number of shares of Common Stock
outstanding on such record date multiplied by such Current
market Price per share. Such adjustment shall be made
successively each time such a record date is fixed. In the
event that such distribution is not so made, the Exercise
Price then in effect shall be readjusted to the Exercise
Price which would then be in effect if such record date had
not been fixed.
(4) For the purpose of any computation under
Paragraphs 6.(a)(1), 6.(a)(2) or 6.(a)(3) hereof, the
"Current Market Price" per share at any date (the
"Computation Date") shall be deemed to be the average of the
daily current market value of the Common Stock as determined
in accordance with the provision of paragraph 3 over twenty
(20) consecutive trading days ending the trading day before
such date; provided, however, upon the occurrence, prior to
the Computation Date, of any event described in Paragraphs
6.(a)(1), 6.(a)(2) or 6.(a)(3) that shall have become
effective with respect to market transactions at any time
(the "Market-Effect Date") on or after the beginning of such
20-day period, the current market value, as determined in
accordance with the provisions of paragraph 3, for each
trading day preceding the Market-Effect Date shall be
adjusted, for purposes of calculating such average, by
multiplying such average by a fraction the numerator of
which is the Exercise Price as in effect immediately after
the Market-Effect Date and the denominator of which is the
Exercise Price immediately prior to the Market-Effect Date,
it being understood that the purpose of this proviso is to
ensure that the effect of such event on the market price of
the Common Stock shall, as nearly as possible, be eliminated
in order that distortion of the calculation of the Current
Market Price may be minimized.
(5) All calculations under this Paragraph
6.(a) shall be made to the nearest cent.
(b) Adjustment of Number of Shares. Upon each
adjustment of the Exercise Price pursuant to Paragraphs 6.(a)(1),
6.(a)(2) or 6.(a)(3) hereof, this Warrant shall thereupon evidence
the right to purchase, in addition to any other securities to which
the Holder is entitled to purchase, that number of shares of Common
Stock (calculated to the nearest one-hundred thousandth of a share)
obtained by multiplying the number of shares of Common Stock
purchasable upon exercise of the Warrant immediately prior to such
adjustment by the Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment.
(c) Verification of Computations. The Company shall
select a firm of independent public accountants, which may be the
Company's independent auditors, and which selection may be changed
from time to time, to verify the computations made in accordance
with this Paragraph 6. The certificate, report or other written
statement of any such firm shall be conclusive evidence of the
correctness of any computation made under this Paragraph 6.
Promptly upon its receipt of such certificate, report or statement
from such firm of independent public accountants, the Company shall
deliver a copy thereof to the Holder.
(d) Warrant Certificate Amendments. Irrespective of
any adjustments pursuant to this Paragraph 6, Warrant Certificates
theretofore or thereafter issued need not be amended or replaced,
but Warrant Certificates thereafter issued shall bear an appropriate
legend or other notice of any adjustments and which legend and/or
notice has been provided by the Company to the Holder; provided,
however, the Company may, at its option, issue new Warrant
Certificates evidencing Warrants to reflect any adjustment in the
Exercise Price and the number of Warrant Shares evidenced by such
Warrant Certificates and deliver the same to the Holder in
substitution for existing Warrant Certificates.
7. Officer's Certificate. Whenever the Exercise Price
shall be adjusted as required by the provisions of the foregoing
Paragraph 6, the Company shall forthwith place in the custody of its
Secretary or an Assistant Secretary at its principal office, with a
copy to its stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional shares
of Common Stock, if any, and such other facts as shall be necessary
to show the reason for and the manner of computing such adjustment.
Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a
Warrant executed and delivered pursuant to Paragraph 1, and the
Company shall, forthwith after each such adjustment, mail a copy by
certified mail of such certificate to the Holder or any such holder.
8. Notices to Warrant Holders. So long as this
Warrant shall be outstanding:
(a) if the Company shall pay any dividend or make any
distribution upon the Common Stock;
(b) if the Company shall offer to the holders of its
Common Stock rights to subscribe for, purchase, or exchange property
for any shares of any class of stock, or any other rights or
options; or
(c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation
or merger of the Company with or into another corporation, sale,
lease or transfer of all or substantially all of the property and
assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company
shall be effected
then in any such case, the Company shall cause to be sent by
mail or courier service to the Holder, at least five days prior to
the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating
the date on which (x) a record is to be taken for the purpose of
such dividend, distribution or subscription rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of Common
Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or
winding up.
9. Reclassification, Reorganization or Merger. In
case of any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the Company, or in case of
any consolidation or merger of the Company with or into another
corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result
in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon
exercise of this Warrant) or in case of any sale, lease or
conveyance to another corporation of the property of the Company as
an entirety (collectively such actions being hereinafter referred to
as "Reorganizations"), the Company shall, as a condition precedent
to such Reorganization transaction, cause effective provisions to be
made so that the Holder shall have the right thereafter by
exercising this Warrant at any time prior to the expiration of the
Warrant, to receive in lieu of the amount of securities otherwise
deliverable, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a
holder of the number of shares of Common Stock which might have been
purchased upon exercise of this Warrant and the warrants included in
the Shares immediately prior to such Reorganization. Any such
provision shall include provision for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this paragraph
shall similarly apply to successive Reorganizations.
10. Issue Tax. The issuance of certificates
representing the Warrant Shares upon the exercise of this Warrant
shall be made without charge to the Holder for any issuance tax in
respect thereof.
11. Exchange Provisions. At any time during which this
Warrant is exercisable in accordance with its terms, the Holder may,
at its option, exchange this Warrant, in whole or in part (a
"Warrant Exchange"), into the number of Warrant Shares determined in
accordance with this paragraph 11, by surrendering this Warrant at
the principal office of the Company or at the office of its stock
transfer agent, accompanied by a notice stating such Xxxxxx's intent
to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such
Warrant Exchange occur (the "Notice of Exchange"). The Warrant
Exchange shall take place on the date specified in the Notice of
Exchange or, if later, the date the Notice of Exchange is received
by the Company (the "Exchange Date"). Certificates for the shares
issuable upon such Warrant Exchange and, if applicable, a new
warrant of like tenor evidencing the balance of the shares remaining
subject to this Warrant, shall be issued as of the Exchange Date and
delivered to the Holder within seven (7) days following the Exchange
Date. In connection with any Warrant Exchange, this Warrant shall
represent the right to subscribe for and acquire the number of
Warrant Shares (rounded to the next highest integer) equal to (i)
the number of Warrant Shares specified by the Holder in its Notice
of Exchange (the "Total Number") less (ii) the number of Warrant
Shares equal to the quotient obtained by dividing (A) the product of
the Total Number and the existing Exercise Price by (B) the Fair
Market Value determined as set forth in the following sentence. If
the Common Stock is listed on a National Securities Exchange or
admitted to unlisted trading privileges on such exchange or listed
for trading on the NASDAQ system, Fair Market Value shall be the
average of the last reported sale prices of the Common Stock on such
exchange or system for the twenty (20) business days ending on the
last business day prior to the date for which the determination is
being made; or if the Common Stock is not so listed or admitted to
unlisted trading privileges, Fair Market Value shall be the average
of the means of the last reported bid and asked prices reported by
the National Quotation Bureau, Inc. or any successor thereto for the
twenty (20) business days ending on the last business day prior to
the date for which the determination is being made; or if the Common
Stock is not so listed or admitted to unlisted trading privileges
and bid and asked prices are not so reported, the Fair Market Value
shall be the book value thereof as at the end of the most recent
fiscal year of the Company ending prior to the Exchange Date,
determined in accordance with generally accepted accounting principles.
12. Governing Law. This Warrant shall be governed by
and construed and enforced in accordance with the laws of the State
of Florida, and any action, suit or proceeding brought by or on
behalf of either the Company or the Holder with respect to this
Warrant shall be adjudicated in the courts of the State of Florida
located in Palm Beach County and the United States District Court in
and for the Southern District of Florida.
(Signatures Appear Next Page)
This Warrant is dated the _______ day of ______________, 2002.
DOVER PETROLEUM CORP.,
a Nevada corporation
(Corporate Seal)
By: Xxx Xxxxxxxxx, President
Attest: Secretary
PURCHASE FORM
Dated , 200
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing
Shares and hereby makes payment of
in payment of the actual exercise price thereof.
Instructions for Registration of Stock
(Please type or print in block letters)
Name
Address
Signature
