EXHIBIT 10.10
WARRANT AGREEMENT
December 9, 1997
Bois d'Arc Resources
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Gentlemen:
Xxxxxxxx Resources, Inc., a Nevada corporation (the "Company"), for value
received, hereby agrees to issue a stock purchase warrant entitling Bois d'Arc
Resources, a Louisiana partnership of Xxxxx X. Xxxxxx and Xxxx X. Xxxxxxx
("Original Owner"), to purchase up to an aggregate of 1,000,000 shares of the
Company's common stock, par value $.50 per share (the "Common Stock"). Such
warrant shall be evidenced by a warrant certificate in the form attached hereto
as Exhibit A (such instrument being hereinafter referred to as the "Warrant,"
and such Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). Subject to Section 1(a) below, the Warrants will
be exercisable by Original Owner or any other Warrantholder (as defined below)
as to all or any lesser number of shares of Common Stock covered thereby, at an
initial exercise price of $14.00 per share, subject to adjustment as provided in
Section 5 below (as adjusted, the "Exercise Price "), for the exercise period
defined in Section 1(a) below. The number of shares of Common Stock purchasable
upon exercise of the Warrants is subject to adjustment as provided in Section 5
below.
The term "Warrantholder" refers to Original Owner and any of its
transferees permitted by Section 3 below. Such term, when used in this Warrant
Agreement in reference to or in the context of a person who holds or owns shares
of Common Stock issued upon exercise of a Warrant, refers where appropriate to
such person who holds or owns such shares of Common Stock. The term "Shares"
refers to the shares of Common Stock issuable upon exercise of the Warrants.
SECTION 1. EXERCISE OF WARRANTS; PARTIAL EXERCISE
(a) Exercise Period; Vesting Requirement. The Warrants will be
exercisable by any Warrantholder as to all or any lesser number of shares of
Common Stock covered thereby, at the Exercise Price, at any time and from time
to time on and after the date hereof and ending at 5:00 p.m., Dallas time, on
December 31, 2007. The Warrants (i) are being issued pursuant to the Joint
Exploration Agreement dated as of December 8, 1997 ("Joint Exploration
Agreement") between the Original Owner and Xxxxxxxx Offshore, LLC, a Nevada
limited liability company, and (ii) shall vest and become exercisable as set
forth in Section 9 of the Joint Exploration Agreement. Any Warrants that have
not vested and become exercisable by January 1, 2005, as provided in the Joint
Exploration Agreement, shall terminate on such date.
(b) Exercise in Full. Subject to Section 1(a), the Warrants may be
exercised in full by the Warrantholder by surrender of the Warrants, with the
form of subscription on the Warrant duly executed by such Warrantholder, to the
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Company at its principal office at 0000 XXX Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, Attention: Chief Financial Officer, accompanied by payment, in cash or by
certified or bank cashier's check payable to the order of the Company, or by
delivery of previously owned shares of Common Stock (valued at the Market Price
Per Share), in the amount obtained by multiplying the number of shares of the
Common Stock represented by the respective Warrant or Warrants by the Exercise
Price per share (after giving effect to any adjustments as provided in Section 5
below). The Market Price Per Share of Common Stock at any date shall be deemed
to be the average of the daily closing prices for the five consecutive trading
days immediately prior to the day in question, as reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading.
(c) Partial Exercise. Subject to Section 1(a), each Warrant may be
exercised in part by a Warrantholder by surrender of the Warrant, with the form
of subscription at the end thereof duly executed by such Warrantholder, in the
manner and at the place provided in Section 1(b) above, accompanied by payment,
in cash or by certified or bank cashier's check payable to the order of the
Company, or by delivery of previously owned shares of Common Stock (valued at
the Market Price Per Share), in the amount obtained by multiplying the number of
shares of the Common Stock designated by the Warrantholder in the form of
subscription attached to the Warrant by the Exercise Price per share (after
giving effect to any adjustments as provided in Section 5 below). Upon any such
partial exercise, the Company at its expense will issue and deliver to or upon
the order of the Warrantholder a new Warrant of like tenor, in the name of the
Warrantholder or as the Warrantholder (upon payment by such Warrantholder of any
applicable transfer taxes) may request, subject to Section 3, calling in the
aggregate for the purchase of the number of shares of the Common Stock equal to
the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrantholder in the
aforementioned form of subscription.
(d) Alternate Payment Right. The Warrantholder shall also have the
right (the "Alternate Payment Right") to convert those Warrants which have
vested and become exercisable as set forth in Section 1(a) above into shares of
Common Stock as provided for herein. Upon exercise of the Alternate Payment
Right (by delivery of the Warrants and a written notice at the place provided in
Section 1(b) above), the Company shall deliver to the Warrantholder (without
payment of any Exercise Price) that number of shares of Common Stock equal to
the quotient obtained by dividing (x) the value of the Warrant at the time the
Alternate Payment Right is exercised (determined by subtracting the aggregate
Exercise Price for the shares of Common Stock which the Warrantholder is
entitled to purchase under this Warrant on such date from the aggregate Market
Price Per Share for such shares on such date) by (y) the Market Price Per Share
on such date. If additional Warrants remain outstanding after exercise of the
Alternate Payment Right, then the Company shall also deliver a new Warrant for
the remaining balance of Warrants in accordance with Section 1(c) above.
(e) Delivery of Stock Certificates on Exercise. Any exercise of the
Warrants pursuant to Section 1 shall be deemed to have been effected immediately
prior to the close of business on the date on which the Warrants together with
the subscription form and the payment for the aggregate Exercise Price shall
have been received by the Company. At such time, the person or persons in whose
name or names any certificate or certificates representing the Shares or Other
Securities (as defined below) shall be issuable upon such exercise shall be
deemed to have become the holder or holders of record of the Shares or Other
Securities so purchased. As soon as practicable after the exercise of any
Warrant in full or in part, and in any event within 10 days thereafter, the
Company at its expense (including the payment by it of any applicable issue
taxes but excluding any income taxes resulting from the exercise) will cause to
be issued in the name of, and delivered to the purchasing Warrantholder, a
certificate or certificates representing the number of fully paid and
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nonassessable shares of Common Stock or Other Securities to which such
Warrantholder shall be entitled upon such exercise. The term "Other Securities"
refers to any stock (other than Common Stock), other securities or assets
(including cash) of the Company or any other person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 below or otherwise.
(f) Fractional Shares. In lieu of any fractional shares of Common
Stock which would otherwise be issuable upon exercise of this Warrant, the
Company shall issue a certificate for the next higher number of whole shares of
Common Stock for any fraction of a share which is one-half or greater. No shares
will be issued for less than one-half a share.
(g) Warrantholder to Reaffirm Intent. At the request of the Company,
the Warrantholder will, at the time of exercise of any Warrant, reaffirm its
agreement set out in Section 3(a) hereof and further will represent and warrant
that it is acquiring the Shares as an investment and not with a view to
distribution thereof unless the Warrant is exercised simultaneously with the
registration of the Shares to be issued.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Warrantholders as follows:
(a) Corporate and Other Action. The Company has all requisite power
and authority (corporate and other), and has taken all necessary corporate
action, to authorize, execute, deliver and perform this Warrant Agreement, to
execute, issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Exercise Price, to issue, sell and deliver, the Shares,
and to perform all of its obligations under this Warrant Agreement and the
Warrants. The Shares, when issued in accordance with this Agreement, will be
duly authorized and validly issued and outstanding, fully paid and nonassessable
and free of all liens, claims, encumbrances and preemptive rights (other than
any liens that may be created by Warrantholder). This Warrant Agreement and,
when issued, each Warrant issued pursuant hereto, has been or will be duly
executed and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms. No
authorization, approval, consent or other order of any governmental entity,
regulatory authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant
Agreement, the consummation of the transactions herein contemplated and the
compliance with the terms and provisions of this Warrant Agreement and of the
Warrants will not conflict with, or result in a breach of, or constitute a
default or an event permitting acceleration under, any statute, the Restated
Articles of Incorporation or Bylaws of the Company or any indenture, mortgage,
deed of trust, note, bank loan, credit agreement, franchise, license, lease,
permit, or any other agreement, understanding, instrument, judgment, decree,
order, statute, rule or regulation to which the Company is a party or by which
it is or may be bound.
SECTION 3. TRANSFER RESTRICTIONS
(a) Compliance with Securities Law. Each Warrantholder agrees that the
Warrants are being acquired as an investment and not with a view to distribution
thereof and that the Warrants may not be transferred, sold, assigned or
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hypothecated except as provided herein and in compliance with all applicable
securities and other laws. Each Warrantholder agrees not to make any sale or
other disposition of the Shares except pursuant to a registration statement
which has become effective under the Securities Act of 1933, as amended (the
"Act"), setting forth the terms of such offering, the underwriting discount and
commissions and any other pertinent data with respect thereto, unless the
Company has been provided with an opinion of counsel reasonably acceptable to
the Company that such registration is not required. Certificates representing
the Shares, which are not registered as provided in Section 4 below, shall bear
an appropriate legend and be subject to a "stop-transfer" order.
(b) Transfer Restrictions. Prior to the Warrants vesting and becoming
exercisable in accordance with Section 9 of the Joint Exploration Agreement, the
Warrants may not be assigned or transferred by the Original Owner without the
prior written consent of the Company. Notwithstanding the foregoing, the
Original Owner may transfer all or any part of such Original Owner's interest in
the Warrants to the partners of such Original Owner or to family members of such
Original Owner's partners, trusts, corporations, partnerships or other entities
in which a family member of Original Owner or its partners owns a majority of
the beneficial interest provided that the transferee agrees in a writing
delivered to the Company to accept the terms and conditions hereof, and assume
all of the obligations of the transferring Original Owner under this Warrant
Agreement. A "family member" for purposes of this paragraph shall include only
the spouse, parents, siblings, children and descendants of the partners of
Original Owner. "Descendants" for purposes of this paragraph shall include
descendants through all generations and shall include blood descendant,
descendants of stepchildren and persons adopted by their parent prior to
attaining eighteen (18) years of age. After the Warrants or any portion thereof
shall have vested and become exercisable in accordance with Section 9 of the
Joint Exploration Agreement, such Warrants that have vested and become
exercisable may be assigned to any person, subject to compliance with the terms
of this Warrant Agreement and all applicable securities laws.
(c) Tax Matters. To the extent that the exercise of the Warrants or
the disposition of shares of Common Stock acquired by exercise of the Warrants
results in income subject to federal or state income tax withholding,
Warrantholder shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Common Stock as the Company may
require to meet its obligations under applicable tax laws or regulations, and,
if Warrantholder fails to do so, the Company is authorized to withhold from any
cash or Common Stock remuneration then or thereafter payable to Warrantholder
any tax required to be withheld by reason of such resulting income. Upon an
exercise of the Warrants, the Company is further authorized in its discretion to
satisfy any such withholding requirement out of any cash or shares of Common
Stock distributable to Warrantholder upon such exercise.
SECTION 4. REGISTRATION RIGHTS
(a) Required Registration. If the Warrantholder shall request the
Company to effect the registration under the Securities Act of Shares acquired
upon exercise of the Warrants or to be acquired no later than five business days
after the registration hereunder shall have become effective, the Company shall
use its best efforts to effect, as expeditiously as possible, the registration
under the Securities Act of such Shares on Form S-3 or such similar form;
provided, however, that the Company shall not be obligated to effect any such
registration if the Company's counsel delivers to the Warrantholder a written
opinion to the effect that the Shares may be sold or distributed without
registration; and provided further, that if the Company is engaged in
negotiations in respect of a merger, acquisition, combination or other
transaction and in the good faith judgment of the Board of Directors of the
Company disclosure of such transaction would not be in the best interest of the
Company, the Company shall be entitled to postpone the filing of such
registration statement until such time as the Board of Directors deems that
disclosure of the transaction would not adversely affect the Company, but in no
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event for more than six months. All expenses incident to the Company's
performance with its obligations under this paragraph shall be paid by the
Company; provided, however, the Warrantholder shall be responsible for and shall
pay any underwriting, brokerage or selling agent's fees, discounts or
commissions, and shall be responsible for all legal fees or counsel to the
Warrantholder.
(b) Company Indemnification. In the event of any registration under
the Securities Act of any securities pursuant to this Section 4, the Company
will indemnify and hold harmless each Warrantholder and each other individual,
corporation, partnership, trust, organization, association or other entity or
individual ("Person"), if any, which controls (within the meaning of the
Securities Act) such holder, against any losses, claims, damages or liabilities,
joint or several, to which such holder or controlling Person may become subject
under the Securities Act or otherwise, to the extent that such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such securities were registered under the Securities Act, in any
preliminary prospectus or final prospectus contained therein, or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such holder and each such controlling Person for any legal or any
other expenses reasonably incurred by such holder or such controlling person in
connection with investigating or defending any loss, claim, damage, liability or
proceeding, except insofar as any such losses, claims, damages, liabilities or
expenses result from an untrue statement or omission contained in information
furnished in writing to the Company by such holder expressly for use therein.
(c) Indemnification by Warrantholder. In the event of any registration
of any securities under the Securities Act pursuant to this Section 4, the
Warrantholder will (or will furnish the written undertaking of such other Person
or Persons as shall be acceptable to the Company to) indemnify and hold harmless
the Company and each other Person, if any, who controls the Company within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which the Company or such controlling Person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
said registration statement, said preliminary prospectus, or said prospectus or
said amendment or supplement in reliance upon and in conformity within written
information furnished to the Company through an instrument duly executed by such
Warrantholder or any underwriter of such holder's securities specifically for
use in the preparation thereof, and such Warrantholder will (or will furnish the
written undertaking of such other Person or Persons as shall be acceptable to
the Company to) reimburse the Company and each such controlling Person for any
legal and any other expenses reasonably incurred by the Company or such
controlling Person in connection with investigation or defending any such loss,
claim, damage, liability, or action.
(d) Acknowledgment of Rights. The Company will, at the time of the
exercise of this Warrant in accordance with the terms hereof, upon the request
of the Warrantholder hereof, acknowledge in writing its continuing obligation to
afford to such holder any rights (including without limitation, any right to
registration of the Shares) to which such holder shall continue to be entitled
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after such exercise in accordance with the provisions of this Warrant, provided
that if the holder of this Warrant shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford to
such holder any such rights.
SECTION 5. ANTI-DILUTION PROVISIONS. The Exercise Price and the number of
Shares purchasable upon the exercise of each Warrant are subject to adjustment
from time to time as set forth in this Section 5.
(a) Adjustment of Exercise Price and Number of Shares Purchasable. In
case the Company shall at any time after the date of this Agreement (i) declare
a dividend on the Common Stock in shares of its capital stock, (ii) subdivide
the outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the surviving corporation), then in each case the Exercise Price, in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination, or reclassification shall be adjusted so that
the holder of any Warrant exercised after such time shall be entitled to receive
the number of shares of Common Stock or other capital stock of the Company
which, if such Warrant had been exercised immediately prior to such time, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur. If as a
result of an adjustment made pursuant to this Section 5(a), the holder of any
Warrant thereafter exercised shall become entitled to receive shares of two or
more classes of capital stock or shares of Common Stock and other capital stock
of the Company, the Board of Directors of the Company (whose determination shall
be conclusive) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock or shares of Common
Stock and other capital stock. Upon each adjustment of the Exercise Price or the
number of Shares as a result of the calculations made in this Section 5(a), each
Warrant outstanding prior to the making of the adjustment in the Exercise Price
or number of Shares shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, the adjusted number of Shares, without the necessity
for issuing a replacement Warrant.
(b) Minimum Adjustment. No adjustment in the Exercise Price shall be
required if such adjustment is less than $.05; provided, however, that any
adjustments which by reason of this subsection (b) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 5 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
(c) Reorganization, etc. In case of any capital reorganization of the
Company, or of any reclassification of the Common Stock (other than a
reclassification of the Common Stock referred to in Section 5(a) above), or in
the case of the consolidation of the Company with or the merger of the Company
into any other corporation or of the sale or transfer of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation, each Warrant shall after such capital reorganization,
reclassification of the Common Stock, consolidation, merger, sale or transfer be
exercisable, upon the terms and conditions specified in this Agreement, for the
number of shares of stock or other securities, assets, or cash to which a holder
of the number of shares of Common Stock purchasable (at the time of such capital
reorganization, reclassification of shares, consolidation, merger, sale or
transfer) upon exercise of such Warrant would have been entitled upon such
capital reorganization, reclassification of the Common Stock, consolidation,
merger, sale or transfer; and in any such case, if necessary, the provisions set
forth in this Section 5(c) with respect to the rights and interests thereafter
of the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or other
securities, assets, or cash thereafter deliverable upon the exercise of the
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Warrants. The subdivision or combination of the Common Stock at any time
outstanding into a greater or lesser number of shares shall not be deemed to be
a reclassification of the Common Stock for the purposes of this paragraph. The
Company shall not effect any such consolidation, merger, transfer, or sale,
unless prior to or simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing or receiving, such assets or other
appropriate corporation or entity shall assume, by written instrument executed
and delivered to the holders of the Warrants, the obligation to deliver to the
holder of each Warrant such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such holders may be entitled to
purchase, and to perform the other obligations of the Company under this Warrant
Agreement. This Section 5(c) shall not apply to any sale, transfer or lease as
an entirety, or substantially as an entirety, of the properties and assets of
the Company as collateral security for obligations of the Company.
(d) Distributions to All Shareholders Below Market Price. If the
Company shall distribute to all holders of Common Stock any rights, options,
warrants or convertible or exchangeable securities entitling such holders to
subscribe for or purchase Common Stock at a price per share that is, at the
record date for such distribution, lower than the market price per share of
Common Stock on such date, then the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately before such record date by a fraction, of which the numerator shall
be the sum of (i) the number of shares of Common Stock that the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at the Market Price Per Share of Common
Stock (as defined in Section 1(b) above) on such date, and the denominator shall
be the sum of (x) the number of shares of Common Stock outstanding at the close
of business on such record date and (y) the number of shares so offered for
subscription or purchase.
(e) Other Distributions to All Shareholders. If the Company shall
distribute to all holders of Common Stock (i) any rights, options, warrants or
convertible or exchangeable securities entitling the holder to subscribe for or
purchase any equty securities of the Company (other than any rights, options,
warrants or exchangeable securities referred to in Xxxxxxx 0 (x), (xx) any
evidences of indebtedness or other securities of the Company (other than Common
Stock) or (iii) assets (other than cash dividends paid out of the earned surplus
of the Company), then in each such case the Exercise Price to be in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the Market Price Per Share of Common Stock (as defined in Section 1(b)
above) on such record date, less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive, and described in a
statement sent to the Warrantholder, of the portion of the rights, warrants,
evidences of indebtedness, other securities or assets so distributed applicable
to one share of Common Stock and of which the denominator shall be such Market
Price Per Share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively immediately after
the record date for the determination of stockholders entitled to receive such
distribution.
(f) Statement Regarding Adjustments. Whenever the Exercise Price shall
be adjusted as provided in this Section, and upon each change in the number of
shares of the Common Stock issuable upon exercise of the Warrants, the Company
shall send notice to the Warrantholder, a statement showing in detail the facts
requiring such adjustment and the Exercise Price and new number of shares
issuable that shall be in effect after such adjustment. Each such statement
shall be signed by the Company's chief financial or accounting officer. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions of Section 5(g) below.
(g) Notice to Warrantholders. In the event the Company shall propose
to take any action of the type described in Sections 5(a), (c), (d) or (e), the
Company shall give notice to the holder of this Warrant, in the manner set forth
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in Section 8, which notice shall specify the record date, if any, with respect
to any such action and the approximate date on which such action is to take
place. Such notice shall also set forth such facts with respect thereto as shall
be reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price and
the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such notice
shall be given at least 15 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.
SECTION 6. FURTHER COVENANTS OF THE COMPANY.
(a) Dilution or Impairments. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants or of this Warrant Agreement, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Warrantholders against dilution or other impairment. Without limiting the
generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely
for issuance and delivery upon the exercise of the Warrants, all
shares of Common Stock (or Other Securities) from time to time
issuable upon the exercise of the Warrants and shall take all
necessary actions to ensure that the par value per share, if any, of
the Common Stock (or Other Securities) is at all times equal to or
less than the then effective Exercise Price per share;
(ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or Other
Securities upon the exercise of the Warrants from time to time
outstanding; and
(iii) will not consolidate with or merge into any other
person or permit any such person to consolidate with or merge into the
Company (if the Company is not the surviving corporation), unless such
other person shall expressly assume in writing and will be bound by
all the terms of this Warrant Agreement and the Warrants.
(b) Title to Stock. All shares of Common Stock delivered upon the
exercise of the Warrants shall be validly issued, fully paid and nonassessable;
each Warrantholder shall, upon such delivery, receive good and marketable title
to the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever created by the Company; and the
Company shall have paid all taxes, if any, in respect of the issuance thereof.
(c) Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon the
exercise of the Warrants, and maintain such listing of, all shares of Common
Stock from time to time issuable upon the exercise of the Warrants, and the
Company will so list on any national securities exchange, will so register and
will maintain such listing of, any Other Securities if and at the time that any
securities of like class or similar type shall be listed on such national
securities exchange by the Company. The Company currently lists its Common Stock
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on the New York Stock Exchange and so long as so listed, will list all shares of
Common Stock issued on the exercise of the Warrant on such exchange.
(d) Exchange of Warrants. Subject to Section 3 hereof, upon surrender
for exchange of any Warrant to the Company, the Company at its expense will
promptly issue and deliver to or upon the order of the holder thereof a new
Warrant of like tenor, in the name of such holder or as such holder (upon
payment by such Warrantholder of any applicable transfer taxes) may direct,
calling in the aggregate for the purchase of the number of shares of the Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
The Warrants and all rights thereunder are transferable in whole or in part upon
the books of the Company by the registered holder thereof, subject to the
provisions of Section 3, in person or by duly authorized attorney, upon
surrender of the Warrant, duly endorsed, at the principal office of the Company.
(e) Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement and bond reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company, at the expense of the Warrantholder,
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
(f) Reporting by the Company. The Company agrees that during the term
of the Warrants it will use commercially reasonable efforts to keep current in
the filing of all forms and other materials, if any, which it may be required to
file with the appropriate regulatory authority pursuant to the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and all other forms and
reports required to be filed with any regulatory authority having jurisdiction
over the Company.
SECTION 7. OTHER WARRANTHOLDERS; HOLDERS OF SHARES. The Warrants are issued
upon the following terms, to all of which each Warrantholder by the taking
thereof consents and agrees: (a) any person who shall become a transferee,
within the limitations on transfer imposed by Section 3 hereof, of a Warrant
properly endorsed shall take such Warrant subject to the provisions of Section 3
hereof and thereupon shall be authorized to represent himself as absolute owner
thereof and, subject to the restrictions contained in this Warrant Agreement,
shall be empowered to transfer absolute title by endorsement and delivery
thereof to a permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to the
provisions of Section 3 hereof; (c) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary. At the request of the Company, before registration
of any transfer of a Warrant, the transferee will make the representation and
warranties contained in Section 2(a); and (d) Warrantholders shall not have any
rights as a shareholder of the Company until exercise of the Warrants, except as
otherwise provided herein.
SECTION 8. MISCELLANEOUS.
(i) All notices, certificates and other communications from
or at the request of the Company to any Warrantholder shall be mailed
by first class, registered or certified mail, postage prepaid, to such
address as may have been furnished to the Company in writing by such
Warrantholder, or, until an address is so furnished, to the address of
the last holder of such Warrant who has so furnished an address to the
Company, except as otherwise provided herein. The initial address of
the Original Owner shall be as set forth at the beginning of this
Agreement, and the initial address of the Company shall be as set
forth in Section 1(b) hereof.
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(ii) This Warrant Agreement and any of the terms hereof may
be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change,
waiver, discharge or termination is sought.
(iii) This Warrant Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Texas.
(iv) The headings in this Warrant Agreement are for purposes
of reference only and shall not limit or otherwise affect any of the
terms hereof. This Warrant Agreement, together with the forms of
instruments annexed hereto as exhibits, and the Joint Exploration
Agreement, constitute the full and complete agreement of the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed effective as of the 9th day of December, 1997, in Dallas, Texas by its
proper corporate officers, hereunto duly authorized.
XXXXXXXX RESOURCES, INC.
By:/s/M. XXX XXXXXXX
-----------------
M. XXX XXXXXXX, President and
Chief Executive Officer
This Warrant Agreement is confirmed and agreed to effective as of December 9,
1997:
BOIS D'ARC RESOURCES
By:/s/XXXXX X. XXXXXX
------------------
XXXXX X. XXXXXX, Partner
By:/s/XXXX XXXXXXX
----------------
XXXX XXXXXXX, Partner
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