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EXHIBIT 4.6
WARRANT AGREEMENT
THIS AGREEMENT dated as of November 1, 1990, among MIDLAND RESOURCES,
INC., a Texas corporation (the "Company") and Stock Transfer Company of America,
Inc. (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue Warrants, as hereinafter
described (the "Warrants"), to purchase up to an aggregate of 4,529,044 shares
of its common shares, par value $.001 per share, (the "Common Shares") in
connection with the consummation of the Consolidated Plan of Reorganization of
Xxxxxx Energy Partners 1982-83 Oil and Gas Income Program Series "A", "B", "C"
and "D" and the Xxxxxx Energy Partners 1984 Oil and Gas Income Program Series
"84-1", "84-2" and "84-3" to the equity interest holders of the limited
partnerships, each whole Warrant evidencing the right to purchase one Common
Share; and
WHEREAS, to provide for the appointment of a Warrant Agent, to provide
for countersignature of the Warrants by the Warrant Agent, and to establish the
terms and conditions of the Warrants, the Company in and by resolutions of its
Board of Directors has duly authorized the execution and delivery of this
Warrant Agreement and the execution, issuance and delivery of the certificates
evidencing the Warrants (the "Warrant Certificates").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. APPOINTMENT OF WARRANT. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the terms and
conditions hereinafter in this Agreement set forth, and the Warrant Agent hereby
accepts such appointment. The Company may from time to time appoint such
additional or substitute Warrant Agents as it may deem necessary or desirable.
SECTION 2. FORM OF WARRANT CERTIFICATES. The Warrant Certificates (and
the form of election to purchase Common Shares and of assignment to be printed
on the reverse thereof) to be delivered pursuant to this Agreement shall be in
registered form only, shall be substantially in the form set forth in Exhibit
"A" hereto, and may have such letters, numbers of other marks of identification
or designation and such legends, summaries or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Warrant Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may from time to time be listed, or to conform to usage. Each Warrant
Certificate shall be dated as of the date of issuance thereof by the Warrant
Agent issuing such
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Warrant Certificate, either upon initial issuance or upon transfer or exchange,
and on its face shall entitle the registered holder thereof to purchase one
Common Share for each Warrant evidenced by such Warrant Certificate, initially
at the price per share set forth therein, but the number of such shares and such
price per share shall be subject to adjustments as provided therein.
SECTION 3. ISSUANCE OF WARRANT CERTIFICATES; COUNTERSIGNATURE AND
REGISTRATION.
(a) Warrant Certificates not to exceed in the aggregate 4,529,044
Warrants (except as provided in Section 5 hereof) upon the execution of this
Warrant Agreement, or from time to time thereafter, may be executed by the
Company and delivered to the Warrant Agent for authentication, and the Warrant
Agent shall thereupon authenticate and deliver said Warrant Certificates to or
upon the written order of the Company signed by any two of its officers listed
in subsection (b) below, without further action by the Company hereunder.
(b) The Warrant Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, President or any Vice-President and by the
Secretary, Treasurer, Assistant Secretary or Assistant Treasurer by facsimile
signature. The Warrant Certificates shall be manually countersigned by the
Warrant Agent (or by any successor as a Warrant Agent hereunder) and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any Warrant Certificate shall cease to be such
officer of the Company before countersignature by a Warrant Agent and issuance
and delivery by the Company, such Warrant Certificate, nevertheless, may be
countersigned by the Warrant Agent, and issued and delivered with the same force
and effect as though the person who signed such Warrant Certificate had not
ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the Company,
to sign such Warrant Certificate although at the date of the execution of this
Warrant Agreement any such person was not such an officer. Upon countersignature
by the Warrant Agent and delivery, the Warrant Certificate shall be valid and
binding upon the Company, and the holder thereof shall be entitled to all the
benefits of this Agreement.
(c) The Warrant Agent shall keep or cause to be kept at its principal
office in Dallas, Texas, books for registration and registration of transfer of
the Warrant Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Warrant Certificates. the number of
Warrants evidenced on its face by each of the Warrant Certificates, and the date
of each of the Warrant Certificates
SECTION 4. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. Subject
to the provision of Section 13 hereof, any Warrant Certificate, with or without
other Warrant Certificates, may be transferred, split up, combined or exchanged
for another Warrant Certificate or Warrant Certificates representing in the
aggregate a like number of Warrants. Subject to any restriction on
transferability that may appear on a Warrant Certificate in accordance with the
terms hereof, any registered holder desiring
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to register the transfer of, or to split up, combine or exchange any Warrant
Certificate shall make such request in writing delivered to the Warrant Agent,
and shall surrender such Warrant Certificate or Warrant Certificates to the
Warrant Agent, at its principal offices maintained for the purpose in Dallas,
Texas. Warrant Agent shall require production of proof reasonably satisfactory
to it with respect to the identity of the registered holder and the genuineness
and effectiveness of any signature on any surrendered Warrant Certificates.
Thereupon such Warrant Agent shall countersign and deliver to the person
entitled thereto a Warrant Certificate or Warrant Certificates, as the case may
be, as so requested. The Warrant Agent shall require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Warrant Certificates.
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and such Warrant Agent of all reasonable expenses incidental thereto, and upon
surrender and cancellation of the Warrant Certificate if mutilated, the Company
will make and deliver a new Warrant Certificate of like tenor for the same
number of Warrants to such Warrant Agent for delivery to the registered owner in
lieu of the Warrant Certificates so lost, stolen, destroyed or mutilated.
SECTION 5. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES. Subsequent to
their original issuance, no Warrant Certificates shall be issued except (a)
Warrant Certificates issued upon any transfer, combination, split up or exchange
of Warrants pursuant to Section 4 hereof, (b) Warrant Certificates issued in
replacement of mutilated, destroyed, lost or stolen Warrant Certificates
pursuant to Section 4 hereof, (c) Warrant Certificates issued pursuant to
Section 6 hereof upon the partial exercise of Warrants represented by any
Warrant Certificate to evidence the unexercised Warrants represented by such
Warrant Certificate and (d) Warrant Certificates issued pursuant to Sections
10(g) or 19 hereof. All Warrant Certificates shall rank part passu regardless of
the actual date of issue thereof.
SECTION 6. EXERCISE OF WARRANTS; EXERCISE PRICE; EXPIRATION DATE OF
WARRANTS; CALL OF WARRANTS.
(a) Each Warrant may be exercised on any business day on or after the
date of issue until the close of business on the twelfth anniversary of the
issuance date (such date is herein called the "Expiration Date") or the first
business day thereafter if such date is not a regular business day.
(b) Subject to the provisions of this Agreement, including Section 10,
the registered holder of each Warrant shall have the right to purchase from the
Company (and the Company shall issue and sell to such holder(s) of a Warrant)
one fully paid and non-assessable Common Share at the price set forth in the
Warrant Certificate, as such price may be adjusted in accordance with the
provisions herein (the "Exercise Price"), upon surrender to the Warrant Agent,
at its principal corporate office maintained for that purpose in Dallas, Texas,
of the Warrant Certificate evidencing
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such Warrant, with the form of election to purchase on the reverse thereof duly
completed and signed, and upon payment of the Exercise Price. Payment of the
Exercise Price shall be in cash or by certified or official bank check or bank
draft or money order payable to the order of the Company. Under the terms of
this Agreement, Warrants may be issued in classes representing the right to
purchase (i) an aggregate of 2,264,522 Common Shares at $2.50 per share, and
(ii) an aggregate of 2,264,522 Common Shares at $4.00 per share.
(c) Upon receipt of a Warrant Certificate, with the form of election to
purchase duly executed, accompanied by proof reasonably satisfactory to the
Warrant Agent with respect to the identity of the registered holder and the
genuineness and effectiveness of any signature on any surrendered Warrant
Certificate, payment of the Exercise Price for the Common Shares to be purchased
and an amount (as required by Section 8 hereof) equal to any applicable transfer
tax in cash or by certified or official bank check or bank draft or money order
payable to the order of the Company, the Warrant Agent receiving such Warrant
Certificates shall thereupon promptly (i) requisition from any transfer agent of
the Common Shares of the Company certificates for the number of Common Shares to
be purchased, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional Common Shares or Warrants, and
(iii) promptly after receipt of such certificates cause the same to be delivered
to or upon the order of the registered holder of such Warrant Certificate,
registered in such name or names as may be designated by such holder, and, when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Warrant Certificate.
(d) In case the registered holder of any Warrant Certificate shall
exercise fewer than all of the Warrants evidenced thereby, a new Warrant
Certificate evidencing Warrants equivalent to the Warrants remaining unexercised
shall be issued by the Warrant Agent to the registered holder of such Warrant
Certificate or to his duly authorized assignee, subject to the provisions of
Section 13 hereof.
(e) The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all monies
received for the purchase of Common Shares through the exercise of Warrants.
(f) Call of Warrants. The Company shall have the right to redeem any
class of the Warrants if the current Market Value (as such term is defined in
Section 10(d) hereof) per Common Share of the Company exceeds the Exercise Price
of the class of Warrants being redeemed by fifty percent (50%) for ninety (90)
consecutive calendar days.
Notice of any redemption made pursuant to this section shall be mailed
at least 30 days prior to the date scheduled for such redemption (the "Call
Date") and shall be given to the Warrant Agent and the Warrant Holders of the
class of Warrants being redeemed in accordance with the provisions of Section 21
hereof. The notice of redemption also shall be given no more than 20 days nor
less than 10 days prior to the mailing of notice to the Warrant Agent and the
Warrant Holders pursuant to this section, by publishing at least once in The
Wall Street Journal. Such notice shall state the
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date, place and price of such repurchase. The $2.50 Warrants may be redeemed at
a price of $.05 per Warrant, and the $4.00 Warrants may be redeemed at a price
of $.08 per Warrant. Each Warrant Holder shall continue to have the right to
exercise the warrants until the close of business on the fifth business day
immediately preceding the Call Date. No less than one business day prior to the
Call Date, the Company shall deposit with the Warrant Agent funds sufficient to
purchase all of the Warrants which are outstanding at the close of business on
the date when the right to exercise expired.
SECTION 7. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All
Warrant Certificates surrendered for the purpose of exercise, exchange,
substitution or registration of transfer shall, if surrendered to the Company or
to any of its agents, be delivered to the Warrant Agent for cancellation or in
cancelled form or, if surrendered to Warrant Agent, shall be cancelled by it.
The Company shall deliver to the Warrant Agent for cancellation and retirement,
and such Warrant Agent shall so cancel and retire, any other Warrant Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Warrant Agent shall deliver all cancelled Warrant Certificates to the
Company, or shall, at the written request of the Company, destroy such cancelled
Warrant Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 8. RESERVATION AND AVAILABILITY OF COMMON SHARES. The Company
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued Common Shares, for the purpose
of enabling it to satisfy any obligation to issue Common Shares upon exercise of
Warrants, the full number of Common Shares deliverable upon the exercise of all
outstanding Warrants.
Before taking any action which would cause an adjustment pursuant to
Section 10 reducing the Exercise Price, the Company will take any corporate
action which may, in the opinion of its counsel (which may be counsel employed
by the Company), be necessary in order that the Company may validly and legally
issue fully paid and non-assessable Common Shares at the Exercise Price as so
adjusted.
The Company covenants that all Common Shares which may be issued upon
exercise of Warrants will upon issue be fully paid and non-assessable and free
from all taxes, liens, charges and security interests with respect to the issue
thereof.
The Warrant Agent is hereby authorized to requisition from time to time
from the transfer agent for the Common Shares, and any subsequent transfer agent
of any of the Company's securities issuable upon the exercise of the Warrants,
share certificates required to honor outstanding Warrants. The Company hereby
directs its present and shall direct any future transfer agent to comply with
all such requests. The Company will supply such transfer agent with duly
executed share certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
13.
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So long as the Common Shares issuable upon the exercise of Warrants may
be listed on any securities exchange in the United States, the Company shall use
its best efforts to cause all shares reserved for such issuance to be listed on
each such exchange upon official notice of issuance upon such exercise.
The Company further covenants and agrees that it will pay when due and
payable any and all U.S. federal and state transfer taxes and charges which may
be payable us respect of the issuance or delivery of the Warrant Certificates or
of any Common Shares upon the exercise of Warrants. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer involved in the transfer or delivery of Warrant Certificates or the
issuance or delivery of certificates for Common Shares in a name other than that
of the registered holder of the Warrant Certificate evidencing Warrants
surrendered for exercise or to issue or deliver any certificates for Common
Shares upon the exercise of any Warrants until any such tax shall have been paid
(any such tax being payable by the holder of such Warrant Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 9. COMMON SHARE RECORD DATE. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Warrants shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated the date upon which
the Warrant Certificate evidencing such Warrants, together with reasonable proof
of the identity of the registered holder and the genuineness and effectiveness
of any signature on any surrendered Warrant Certificate and payment of the
Exercise Price (and any applicable transfer taxes) was duly received by a
Warrant Agent. Prior to the exercise of the Warrants evidenced thereby, the
holder of a Warrant Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Warrants shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, except as set forth herein, or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 10. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF
WARRANTS. The Exercise Price, the number and kind of securities purchasable upon
the exercise of each Warrant and the number of Warrants outstanding shall be
subject to adjustment from time to time upon the happening of the events
enumerated in this Section 10.
(a) In case the Company shall at any time after the date of this
Agreement (i) pay a dividend in Common Shares (except dividends on Common Shares
payable at the option of the holder in cash or in Common Shares) or make a
distribution in Common Shares (or securities exchangeable for or convertible
into Common Shares) to holders of all or substantially all of its outstanding
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of Common Shares or (iv) issue
by reclassification of its Common Shares other securities of the Company
(including any such reclassification in connection with an amalgamation,
consolidation or merger in which the Company is the continuing corporation), the
Exercise Price, the number and the kind of shares purchasable
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upon exercise of each Warrant immediately prior thereto shall be adjusted so
that the holder of each Warrant shall be entitled to receive the kind and number
of Common Shares or other securities of the Company which he would have owned or
have been entitled to, had he exercised immediately prior to the earlier of the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph 10(a) shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event. Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) In case the Company shall issue rights, options or warrants to all
or substantially all of the holders of its outstanding Common Shares, entitling
them (for a period expiring within 45 days after the record date mentioned
below) to subscribe for or purchase Common Shares (or securities exchangeable
for or convertible into Common Shares) at a price per Common Share (or having an
exchange or conversion price per Common Share, with respect to a security
exchangeable for or convertible into Common Shares) which is less than 95% of
the current Market Price per Common Share (as defined in paragraph (d) below) on
the record date for such event, then the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be offered
(or the aggregate initial exchange or conversion price of the exchangeable or
convertible securities so to be offered) would purchase at such current Market
Price and of which the denominator shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares to
be offered for subscription or purchase (or into which the exchangeable or
convertible securities so to be offered are initially exchangeable or
convertible). Such adjustment shall become effective at the close of business on
such record date; however, to the extent that Common Shares (or securities
exchangeable for or convertible into Common Shares) are not delivered after the
expiration of such rights or warrants, the Exercise Price shall be readjusted
(but only with respect to Warrants exercised after such expiration) to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of delivery of only
the number of Common Shares (or securities exchangeable for or convertible into
Common Shares) actually issued. In case any subscription price may by paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined by the Board of Directors of the
Company and shall be described in a statement filed with the Warrant Agent.
Common Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.
(c) In case the Company shall distribute to all or substantially all of
the holders of its Common Shares (including any such distribution made in
connection with an amalgamation, consolidation or merger in which the Company is
the surviving corporation) evidences of its indebtedness or assets (other than
cash dividends or distributions and dividends payable in Common Shares described
in paragraph (a) above and dividends on Common Shares payable at the option of
the holder in cash or Common Shares) or shares of the Company of any class other
than Common Shares (or securities exchangeable for or convertible into Common
Shares) or rights, options or
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warrants or exchangeable or convertible securities containing the right to
subscribe for or purchase Common Shares (excluding those expiring within 45 days
after the record date mentioned in (b) above), then the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for the determination of shareholders entitled to receive such
distribution by a fraction, of which the numerator shall be the current Market
Price per Common Share (as defined in subsection (d) of this Section 10) on such
record date, less the fair market value (as determined by the Board of Directors
of the Company, whose determination shall be conclusive, and described in a
statement filed with each of the Warrant Agents) of the portion of the evidences
of indebtedness or assets or shares so to be distributed or of such subscription
rights or warrants applicable to one Common Share and of which the denominator
shall be such current Market Price per Common Share. Such adjustment shall be
made whenever any such distribution is made and shall become effective on the
date of distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs (b) and (c) of
this Section, the current Market Price per Common Share at any date shall be
deemed to be (i) the average of the daily closing prices on the principal
national securities exchange on which the Common Shares are traded for the 15
consecutive trading days commencing 20 trading days before the day in question
or (ii) if the Common Shares are not traded on a national securities exchange,
the average of the mean between the bid and asked prices in the United States
over-the-counter market, as reported by the National Association of Securities
Dealers Automated Quotation System (NASDAQ), or if not so quoted, then by The
National Quotation Bureau, Inc., or an equivalent generally accepted reporting
service, for the 15 consecutive trading days commencing 20 trading days before
the day in question. The closing price referred to in clauses (i) and (ii) above
shall be the last reported sale price or, in case no reported sale takes place
on such day, the average of the reported closing bid and asked prices on the
applicable quotation medium.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent or more
of the Exercise Price; provided, however, that any adjustments which by reason
of this paragraph (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 10 shall be made to the nearest cent or to the nearest one-hundredth of
a share, as the case may be.
(f) Unless the Company shall have exercised its election as provided in
paragraph (g) of this Section 10, upon each adjustment of the Exercise Price as
a result of the calculations made in paragraphs (a), (b) or (c) of this Section
10, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of Common Shares (calculated to the nearest
hundredth) obtained by (a) multiplying the number of Common Shares purchasable
upon exercise of a Warrant prior to adjustment of the number of Common Shares by
the Exercise Price in effect prior to adjustment of the Exercise Price and (B)
dividing the product so obtained by the Exercise Price in effect after such
adjustment of the Exercise Price.
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(g) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Warrants, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Warrant as provided in paragraph (f) of this Section 10. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for one Common Share. Each Warrant held of record prior to such adjustment of
the number of Warrants shall become that number of Warrants (calculated to the
nearest hundredth) obtained by dividing the Exercise Price in effect prior to
adjustment of the Exercise Price by the Exercise Price in effect after
adjustment of the Exercise Price. The Company shall send to each Warrantholder
an announcement of its election to adjust the number of Warrants indicating the
record date for the adjustment and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but shall be at least 10 days later
than the date such announcement is sent to the Warrantholders. Upon each
adjustment of the number of Warrants pursuant to this paragraph (g), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Warrant Certificates on such record date Warrant Certificates evidencing,
subject to Section 13, the additional Warrants to which such holders shall be
entitled as a result of such adjustment or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Warrant Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to which such holder shall be
entitled after such adjustment. Warrant Certificates so to be distributed shall
be issued, executed and countersigned in the manner specified in Section 3 (but
may bear, at the option of the Company, the adjusted Exercise Price) and shall
be registered in the names of the holders of record of Warrant Certificates on
the record date specified in the announcement sent to Warrantholders.
(h) In case of any capital reorganization of the Company, or of any
reclassification of the Common Shares (other than a reclassification of the
Common Shares referred to in subsection (a) of this Section 10), or in case of
the amalgamation or consolidation of the Company with or the merger of the
Company into any other corporation (other than a reclassification of the Common
Shares referred to in subsection (a) of this Section 10) or of the sale of the
properties and assets of the Company as, or substantially as, an entirety to any
other corporation or entity, each Warrant shall, after such capital
reorganization, reclassification of Common Shares, consolidation, amalgamation,
merger or sale, be exercisable, upon the terms and conditions specified in this
Agreement, for the number of shares or other securities, assets or cash to which
a holder of the number of Common Shares purchasable (at the time of such capital
reorganization, reclassification of Common Shares, consolidation, amalgamation,
merger or sale) upon exercise of such Warrant would have been entitled upon such
capital reorganization, reclassification of Common Shares, consolidation,
amalgamation, merger or sale; and in any such case, if necessary, the provisions
set forth in this Section 10 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 or other securities,
assets or cash thereafter deliverable on the exercise of the Warrants.
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The subdivision or combination of Common Shares at any time outstanding
into a greater or lesser number of shares shall not be deemed to be a
reclassification of the Common Shares for the purposes of this paragraph. The
Company shall not effect any such consolidation, amalgamation, merger or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation, amalgamation or merger or the corporation or entity purchasing
such assets or other appropriate corporation or entity shall assume, by written
instrument executed and delivered to the Warrant Agent, the obligation to
deliver to the holder of each Warrant such shares, securities or assets as, in
accordance with the foregoing provisions, such holders may be entitled to
purchase and the other obligations under this Warrant Agreement.
(i) In the event that at any time, as a result of an adjustment made
pursuant to this Section 10, the holders of a Warrant or Warrants shall become
entitled to purchase any shares or securities of the Company other than the
Common Shares, thereafter the number of such other shares or securities so
purchasable upon exercise of each Warrant and the Exercise Price for such shares
or securities shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Common Shares contained in paragraphs (a) through (h) inclusive, above, and
the provisions of Sections 6, 8, 9 and 13, with respect to the Common Shares
shall apply on like terms to any such other shares.
(j) In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective upon the happening of a
specified event or as of a record date for a specified event, the Company may
elect to defer, until the later of the occurrence of such event and the date
that the notice referred to in Section 11 is filed with the Warrant Agent,
issuing to the holder of any Warrant exercised after such date or such record
date, as the case may be, the Common Shares, if any, issuable upon such exercise
over and above the Common Shares, if any, issuable upon such exercise on the
basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
Common Shares upon the occurrence of the event requiring such adjustment.
SECTION 11. NOTICES TO WARRANT HOLDERS. Upon any adjustment of the
Exercise Price pursuant to Section 10, the Company within 20 days thereafter
shall (i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing (who may be the regular
auditors of the Company) selected by the Board of Directors of the Company
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrants to be issued
under Section 10(g) hereof, or the number of Common Shares (or portion thereof)
or other property purchasable upon exercise of a Warrant after such adjustment
in the Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at his address appearing
on the Warrant register written notice of such adjustment by
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first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 11.
In the event of any of the following:
(a) the Company shall authorize the issuance to all holders of Common
Shares of rights or warrants to subscribe for or purchase Common Shares or of
any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
Common Shares of evidences of its indebtedness or assets; or
(c) any consolidation, amalgamation or merger to which the Company is a
party and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company as, or
substantially as, an entirety, or of any reclassification or change of
outstanding Common Shares issuable upon exercise of the Warrants (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination); or
(d) the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(e) the Company proposes to take any action (other than actions of the
character described in Section 10(a) except as required under (c) above) which
would require an adjustment of the Exercise Price pursuant to Section 10; then
the Company shall cause to be filed with the Warrant Agent and shall cause to be
given to each of the registered holders of the Warrant Certificates at his
address appearing on the Warrant register, at least 20 days (or 10 days in any
case specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, by first-class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of Common Shares to be
entitled to receive any such rights, warrants or distribution are to be
determined, or (ii) the date on which any such consolidation, merger,
amalgamation, conveyance, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of record of Common Shares shall be entitled to exchange their Common
Shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, amalgamation, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any distribution, right, warrant, consolidation, merger,
amalgamation, conveyance, transfer, dissolution, liquidation or winding up, or
the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter or any rights whatsoever as shareholders of the Company.
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SECTION 12. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and shall make all securities acts filings under United States
federal and state laws which may be or become requisite in connection with the
issuance, sale, transfer and delivery of the Warrant Certificates, the exercise
of the Warrants and the issuance, sale, transfer and delivery of the Common
Shares issued upon exercise of the Warrants.
SECTION 13. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Warrants on
any distribution of Warrants to holders of Warrant Certificates pursuant to
Section 10(g) or to distribute Warrant Certificates which evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be paid to the
registered holders of Warrant Certificates with regard to which such fractional
Warrants would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Warrant. For purposes of this
Section 13(a), the current market value of a Warrant shall be the closing price
of the Warrant for the trading day immediately prior to the date on which a
fractional Warrant would have been otherwise issuable (as determined pursuant to
Section 10(d)).
(b) If the number of Common Shares purchasable upon the exercise of
each Warrant is adjusted pursuant to Section 10(f), the Company shall
nonetheless not be required to issue fractions of Common Shares upon exercise of
the Warrants or to distribute Common Share certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, there shall be
paid to the registered holders Warrant Certificates at the time such Warrants
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of a Common Share. For purposes of this Section 13(b),
the current market value of a Common Share shall be the closing price of a
Common Share (as determined pursuant to Section 10(d)) for the trading day
immediately prior to the date of such exercise.
(c) The holder of a Warrant, by the acceptance of the Warrant,
expressly waives his right to receive any fractional Warrant or any fractional
Common Share upon exercise of a Warrant.
SECTION 14. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of any Warrant Agent or of the holder of any other Warrant Certificate,
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of his right to exercise the Warrants evidenced by such
Warrant Certificate in the manner provided in such Warrant Certificate and in
this Agreement.
SECTION 15. AGREEMENT OF WARRANT CERTIFICATE HOLDERS. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the Company
and the Warrant Agent and with every other holder of a Warrant Certificate that:
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(a) transfer of the Warrant Certificates shall be registered on the
registry books of the Warrant Agent only if surrendered at the principal
corporate trust office of the Warrant Agent set forth in Section 4 hereof, duly
endorsed or accompanied by a proper instrument of transfer; and
(b) prior to due presentment for registration of transfer, the Company
and the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company or the Warrant Agent)
for all purposes whatsoever, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 16. THE WARRANT AGENT. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
such Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company), and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant
Certificate in respect of any action taken in accordance with the opinion or the
advice of such counsel, provided such Warrant Agent shall have exercised
reasonable care in the selection and continued employment of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any notice, resolution, waiver, consent, order, certificates, or
other paper, document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for the services rendered by such Warrant Agent in the execution of
this Agreement, to reimburse such Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by such
Warrant Agent in the execution of this Agreement, and to indemnify such Warrant
Agent and hold it harmless against any and all liabilities, including judgments,
expenses and counsel fees, for anything done or omitted by such Warrant Agent in
connection with this Agreement except as a result of the Warrant Agent's
negligence or bad faith.
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(f) Except as otherwise provided by law, the Warrant Agent and any
shareholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as fully and
freely as though it were not a Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
(g) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof and
of the Warrant Certificate. The Warrant Agent shall not be liable for anything
which it may do or refrain from doing in connection with this Agreement except
for its own negligence or bad faith.
(h) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer, President or any Vice President, or the Secretary,
Treasurer, Assistant Secretary or Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.
SECTION 17. CHANGE OF WARRANT AGENTS. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and by giving notice in writing by first class mail, postage
prepaid, to each registered holder of a Warrant Certificate at his address
appearing in the registry books of the Warrant Agent, specifying a date when
such resignation shall take effect, which notice shall be sent at least 30 days
prior to the date so specified. The Company may remove the Warrant Agent or any
successor warrant agent upon 30 days' notice in writing, mailed to such Warrant
Agent and any successor warrant agent and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of Warrant
Certificates at their addresses appearing in such registry books. If any Warrant
Agent shall resign or shall otherwise become incapable of acting, the Company
shall appoint a successor to such Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of a Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to such Warrant Agent. Pending
appointment of a successor to a Warrant Agent, either by the Company or by such
a court, the duties of such Warrant Agent shall be carried out by the Company.
Any warrant agent that is to be the successor of the Warrant Agent or any of its
successors, whether appointed by the Company or by such a court, shall be a
registered transfer agent, bank or trust company in good standing, incorporated
under the laws of any State or of the United States of America, and having its
principal office in the United States, and if a bank or trust company, having at
the time of its appointment as warrant agent a combined capital and surplus of
at least $25,000,000. After appointment, any successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor
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warrant agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Failure to give any notice provided for in this Section, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Warrant Agent or the appointment of the successor warrant
agent, as the case may be. The Company may at any time no earlier than one month
after the Expiration Date terminate the appointment of the Warrant Agent.
SECTION 18. MAINTENANCE OF OFFICE. As long as any of the Warrant
Certificates remain unexercised, the Company will maintain an office or agency
within the United States, where the Warrant Certificates may be presented for
registration, transfer, exchange or exercise pursuant to the terms of this
Agreement, and where notices and demands to or upon the Company in respect of
the Warrants, Warrant Certificates or this Agreement may be served. The
principal address of the Warrant Agent shall be the office or agency for such
purposes, which at the date hereof is:
Stock Transfer Company of America, Inc.
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000
SECTION 19. ISSUANCE OF NEW WARRANT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price and the number or kind or class of
shares of stock or other securities or property purchasable under the several
Warrant Certificates made in accordance with the provisions of this Agreement.
SECTION 20. EXPIRATION OF WARRANTS. To the extent that any Warrant
Certificates remain outstanding after the Expiration Date, as set forth in
Section 6(a) hereof, the unexercised Warrants represented thereby shall be void
and of no effect.
SECTION 21. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Warrant Agent or by the holder of any Warrant
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Warrant Agent) as follows:
Midland Resources, Inc.
000 Xxxx Xxxxxx, Xxxxx X-000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx, III
Subject to the provisions of Section 17, any notice or demand authorized by this
Agreement to be given or made by the Company, or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made,
except as provided in Sections 3 and 6(c), if sent by
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first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Stock Transfer Company of America, Inc.
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000
Notices or demands authorized by this Agreement to be given by the Company or
the Warrant Agent to the holder of any Warrant Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Warrant Agent.
SECTION 22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Warrant Certificates.
SECTION 23. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 24. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement, but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 25. TEXAS CONTRACT. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Texas and for all purposes shall be governed and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.
SECTION 26. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 27. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
MIDLAND RESOURCES, INC.
By: /s/ XXXX X. XXXXXX, III
-------------------------------
[WARRANT AGENT]
STOCK TRANSFER COMPANY OF
AMERICA, INC.
By: /s/ [ILLEGIBLE]
-------------------------------
Its: President
------------------------------
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EXERCISABLE ON OR BEFORE NOVEMBER 1, 2002
No. W. Warrants
------------
WARRANT CERTIFICATE
MIDLAND RESOURCES, INC.
Initial Warrant Exercise Price $
This certifies that _______________________ is the registered holder of
________________ (_________) Warrants of Midland Resources, Inc., each of which
entitles the holder to purchase one Common Share of Midland Resources, Inc. at
an initial exercise price of $_____ per share, subject to adjustment as provided
in the Warrant Agreement. The right to purchase Common Shares of Midland
Resources, Inc. may be exercised by the holder by completing the Purchase Form
on the back of this certificate and delivering this certificate with the
required payment in cash or by certified or official bank check or bank draft or
money order (payable to the order of Midland Resources, Inc.) before the close
of business ______________, 2002 to _________________________________ at its
principal office in _____________, Texas.
The Warrants evidenced by this certificate are issued under the
provisions of a Warrant Agreement dated as of _______________, 1990, among
Midland Resources, Inc. and __________________________________, as Warrant
Agent, and reference is made to the Warrant Agreement for particulars of the
rights and obligations of the holders of Warrants, the Warrant Agent and Midland
Resources, Inc. and for the terms and conditions upon which the Warrants are
issued and held. The provisions of the Warrant Agreement form part of the
Warrants evidenced hereby, and the holder of this certificate, by the acceptance
hereof, assents to the provisions of the Warrant Agreement. Holders of Warrants
are entitled to receive a copy of the Warrant Agreement without charge upon
request made to Midland Resources, Inc. or the Warrant Agent.
A registered holder may transfer Warrants by completing the Transfer
Form on the back of this certificate. If fewer than all of the Warrants
represented by this certificate are to be transferred, the number being
transferred should be inserted in the Transfer Form, and a separate certificate
for the Warrants being retained will be issued to the transferor. Warrants may
be combined into one or more new certificates or may be subdivided into a number
of certificates as desired by the holder. If there is to be a change of name of
the registered holder in such combination or division, it is necessary to
complete the Transfer Form in order to obtain new certificates. Warrants may be
transferred, subdivided or combined at the principal corporate office of
_____________________, in _____________, Texas.
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THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE WARRANT AGENT
Dated: MIDLAND RESOURCES, INC.
By:
-------------------------------
X. X. Xxxxxx, III, President
By:
-------------------------------
, Secretary
-------------------
Countersigned and Registered:
---------------------------------
Warrant Agent
By:
------------------------------
Authorized Signature
Void after _____________, 2002
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PURCHASE FORM
TO MIDLAND RESOURCES, INC.
The undersigned hereby irrevocably
subscribes for Common Shares of Midland
Resources, Inc. as indicated below.
NUMBER OF COMMON SHARES SUBSCRIBED FOR
TOTAL PRICE $ [ ]
-----------------
Payment of the purchase price must be made
in full at the time of purchase either in
cash or by certified or official bank check
or bank draft payable to the order of
Midland Resources, Inc.
NAME AND ADDRESS
OF PERSON IN WHOSE ------------------------
NAME PURCHASED (Name)
COMMON SHARES ARE
TO BE REGISTERED ------------------------
(Address)
[ ]
Please check if share certificates
representing Common Shares purchased are to
be delivered at the office of the Warrant
Agent where this certificate is surrendered
failing which the share certificates will be
mailed.
[ ]
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If any warrants represented by this
certificate are not being exercised, a new
warrant certificate will be issued in the
name of the registered holder of this
certificate and mailed to the address of the
holder entered on the books of Midland
Resources, Inc.
---------------------------- ----------------------------
(Date) (Subscriber's Signature)
TRANSFER FORM
For value received, the undersigned
hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(Print Name of Transferee)
--------------------------------------------------------------------------------
(Address of Transferee)
--------------------------------------------------------------------------------
(Number of Warrants Transferred)
Warrants of Midland Resources, Inc. represented by
this Certificate and does hereby irrevocably
constitute and appoint
--------------------------------------------------------------------------------
as attorney to transfer the said Warrants on the
books of Midland Resources, Inc., with full power
of substitution
Date:
-------------------------------
------------------------------------- ----------------------------------
Signature Guarantee Signature of Registered Holder
NOTICE: The signature of the registered holder must correspond in every
particular with the name appearing on the face of this certificate without any
change whatsoever.
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