PARALLEL PETROLEUM CORPORATION AND AMERICAN STOCK TRANSFER, INC. Warrant Agent PURCHASE WARRANT AGREEMENT Dated as of October 1, 1980
Exhibit 4.7
PARALLEL PETROLEUM CORPORATION
AND
AMERICAN STOCK TRANSFER, INC.
Warrant Agent
Dated as of October 1, 1980
THIS AGREEMENT dated as of October 1, 1980, between PARALLEL PETROLEUM CORPORATION, a Texas
corporation (the “Company”), and AMERICAN STOCK TRANSFER, INC., a Colorado corporation, (the
“Warrant Agent”).
WHEREAS:
1. In connection with a public offering of 1,500,000 Units (the “Units”), each consisting of
10 common shares of the Company, $.001 par value (the “Common Shares”), and 2 detachable purchase
warrants (the “Warrants”) to purchase one Common Share each, the Company proposes to issue
3,000,000 Warrants to purchase initially up to an aggregate of 3,000,000 Common Shares.
2. The Company desires to provide for the issuance of Purchase Warrant Certificates (the
“Warrant Certificates”) representing the Warrants.
3. The Company desires the Warrant Agent to act on behalf of the Company, and the Warrant
Agent is willing to so act, in connection with the issuance, registration, registration of transfer
and exchange of Warrant Certificates and the exercise of Warrants.
NOW, THEREFORE, in consideration of the promises and the mutual agreements hereinafter set
forth and for the purpose of defining the terms and provisions of the Warrant Certificates and the
Warrants, and the respective rights and obligations thereunder of the Company, the registered
holder of the Warrant Certificates and the Warrant Agent, the parties hereto agree as follows:
Section 1. Definitions. As used herein:
A. “Common Shares” shall mean shares of the Company of any class, whether now or hereafter
authorized, which have the right to participate in the distribution of earnings and assets of the
Company without limit as to amount or percentage, which as of the date hereof consists of the
Company’s Common Shares, $.001 par value.
B. “Corporate Office” shall mean the principal place of business of the Warrant Agent (or its
successor) in Denver, Colorado, which office is presently located at 0000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000.
C. “Initial Exercise Date” shall mean August 21, 1981 (9 months after the close of the
Company’s public offering of the Units) prior to which date the Warrants are not exercisable.
D. “Expiration Date” shall mean 5:00 P.M. (Denver time) 30 days after the Initial Exercise
Date or, if such day shall in the State of Colorado be a holiday or a day on which banks are
authorized to close, then 5:00 P.M. (Denver time) on the next following day which in the State of
Colorado is not a holiday or a day on which banks are authorized to close.
E. “Exercise Price” shall mean $.60 per Common Share.
F. “Registered Holder” shall mean the person in whose name any Warrant Certificate shall be
registered on the books maintained by the Warrant Agent pursuant to Section 6.
G. “Subsidiary” shall mean any corporation of which shares having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of whether or not at
the time shares of any other class or classes of such corporation shall have or may have voting
power by reason of the happening of any contingency) is at the time directly or indirectly owned by
the Company or by one or more Subsidiaries, or by the Company and one or more Subsidiaries.
H. “Trading Date” shall mean 5:00 P.M. (Denver time) 14 days after the closing of the public
offering of the Units.
I. “Transfer Agent” shall mean the Company’s transfer agent, American Stock Transfer, Inc., or
its successor.
J. “Warrant Shares” shall mean and include (i) up to 3,000,000 shares of authorized and
unissued Common Shares initially reserved for issuance upon exercise of the Warrants; and (ii) any
additional Common Shares or other property which may hereafter be issuable or deliverable upon
exercise of the Warrants pursuant to Section 8.
Section 2. Warrants and Issuance of Warrant Certificates. Each Warrant shall
initially entitle the Registered Holder of the Warrant Certificate representing such Warrant to
purchase one Common Share upon the exercise thereof, subject to modification and adjustment as
provided in Section 8. Upon execution of this Agreement, Warrant Certificates representing up to an
aggregate of 3,000,000 Warrants to purchase the Warrant Shares, attached to certificates
representing 15,000,000 Common Shares in Units each consisting of 10 Common Shares and two
Warrants, shall be executed by the Company and delivered to the Warrant Agent and, after the
attached certificates for Common Shares shall have been duly countersigned by the Transfer Agent of
the Company’s Common Shares, shall be countersigned, issued and delivered by the Warrant Agent upon
written order of the Company signed by its President or a Vice President and its Treasurer or an
Assistant Treasurer or its Secretary or an Assistant Secretary.
From time to time, up to the Expiration Date, the Warrant Agent shall countersign and deliver
Warrant Certificates in required whole number denominations to the persons entitled thereto in
connection with any transfer or exchange permitted under this Agreement. Except as provided in
Section 7 hereof, no Warrant Certificates shall be issued except (i) Warrant Certificates
initially, up to the Trading Date, issued hereunder and attached to certificates for a number of
Common Shares equal to 5 times the number of Warrants represented thereby, (ii) Warrant
Certificates issued on or after the Trading Date, upon transfer thereof by the holder pursuant to
Section 6, (iii) Warrant Certificates issued on or after the Initial Exercise Date, upon the
partial exercise of any Warrant to evidence the portion of such Warrant not exercised, and (iv)
Warrant Certificates issued on or after the Exercise Date, upon any transfer or exchange of
Warrants.
Section 3.
Form and Execution of Warrant Certificates. The Warrant
Certificates shall be substantially in the form annexed hereto as Exhibit A (the provisions of
which are hereby incorporated herein) and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements printed, lithographed or
engraved hereon as the Company may deem
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appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall be dated as of the
date of their issuance (whether upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates).
The Warrant Certificates initially shall be issued only when attached to certificates for a
number of Common Shares equal to 5 times the number of Warrants represented thereby. Such Warrants
shall be numbered serially in accordance with the Common Shares with letter “W” on Warrant
Certificates. Thereafter the Warrants may be issued by number preceded by the letter “W” without
regard to the number of the Common Shares.
The Warrant Certificates shall be executed on behalf of the Company by its President or a Vice
President and by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary, by manual signatures or by facsimile signatures printed thereon, and shall have
imprinted thereon a facsimile of the Company’s seal. The Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Warrant Certificates shall
cease to be such officer of the Company before the date of issuance of the Warrant Certificates or
before countersignature by the Warrant Agent and issue and delivery thereof, such Warrant
Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with
the same force and effect as though the person who signed such Warrant Certificates had not ceased
to be such officer of the Company.
Section 4. Exercise. Each Warrant represented by a Warrant Certificate may be
exercised at any time on or after the Initial Exercise Date, but not after the Expiration Date,
upon the terms and subject to the conditions set forth herein and in such Warrant Certificate. A
Warrant shall be deemed to have been exercised immediately prior to the close of business on the
date of the surrender for exercise (the “Exercise Date”) of the Warrant Certificate representing
such Warrant, with the exercise form thereon duly executed by the registered holder thereof or his
attorney duly authorized in writing, together with payment to the Warrant Agent, in cash or by
official bank or certified check, of an amount in lawful money of the United States of America
equal to the Purchase Price, and the person entitled to receive the number of Warrant Shares
deliverable upon such exercise shall be treated for all purposes as the holder of such Warrant
Shares as of the close of business on the Exercise Date. The Company shall not be obligated to
issue any fractional share interests in Warrant Shares issuable or deliverable upon the exercise of
any Warrant or Warrants. If more than one Warrant shall be exercised at one time by the same
registered holder, the number of full shares which shall be issuable upon exercise thereof shall be
computed on the basis of the aggregate number of full shares issuable upon such exercise. As soon
as practicable on or after the Exercise Date and in any event within 30 days after such date, the
Warrant Agent on behalf of the Company shall cause to be issued to the person or persons entitled
to receive the same, a certificate or certificates for the number of Warrant Shares deliverable
upon such exercise, and the Warrant Agent shall deliver the same to the person or persons entitled
thereto. No adjustment shall be made in respect of cash dividends on Warrant Shares delivered upon
exercise of any Warrant. Upon the exercise of any Warrant the Warrant Agent shall promptly notify
the Company in writing of such fact and of the number of Warrant Shares delivered upon such
exercise and shall cause payment of an amount in cash equal to the Exercise Price, to be made
promptly to or on the order of the Company.
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Section 5. Reservation of Shares; Listing; Payment of Taxes; Etc. The Company
covenants that it will at all times reserve and keep available out of its authorized Common Shares
solely for the purpose of issue upon exercise of Warrants as herein provided, such number of Common
Shares as shall then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all Warrant Shares which shall be so issuable shall be duly and validly issued and
fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue
thereof, and that upon issuance such shares shall be listed on each national securities exchanged,
if any, on which the other outstanding Common Shares of the Company are then listed.
If any Common Shares to be reserved for the purpose of exercise of Warrants hereunder require
registration with or approval of any governmental authority under any federal or state law, before
such shares may be validly issued or delivered upon such exercise, then the Company covenants that
it will in good faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be; however, Warrants may not be exercised by, or shares issued to, any
registered holder in any state in which such exercise would be unlawful.
The Warrant holder shall pay all documentary, stamp or similar taxes and other governmental
charges that may be imposed with respect of the issuance of the Warrants, or the issuance, transfer
or delivery of any Warrant Shares upon exercise of the Warrants; provided, however, that if Warrant
Shares are to be delivered in a name other than the name of the registered holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery shall be made unless
the person requesting the same has paid to the Warrant Agent the amount of any such taxes or
charges incident thereto.
The Warrant Agent is hereby irrevocably authorized to requisition the Company’s Transfer Agent
from time to time for certificates of Warrant Shares required upon exercise of the Warrants, and
the Company will authorize the Transfer Agent to comply with all such requisitions. The Company
will file with the Warrant Agent a statement setting forth the name and address of its Transfer
Agent for Common Shares or other capital shares issuable upon exercise of the Warrants and of each
successor Transfer Agent.
Section 6. Registration of Transfer. The Warrant Certificates may be transferred in
whole or in part. Warrant Certificates to be so exchanged shall be surrendered to the Warrant Agent
at its Corporate Office, and the Company shall execute and the Warrant Agent shall countersign,
issue and deliver in exchange therefor the Warrant Certificate or certificates which the holder
making the transfer shall be entitled to receive.
The Warrant Agent shall keep, at such office, books in which, subject to such reasonable
regulations as it may prescribe, it shall register Warrant Certificates and the transfer thereof.
Upon due presentment for registration of transfer of any Warrant Certificate at such office, the
Company shall execute and the Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal aggregate number of
Warrants.
All Warrant Certificates presented for registration of transfer or exercise on the
subscription form on the reverse thereof shall be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer and subscription in form satisfactory to the Company and the
Warrant Agent duly executed by the registered holder thereof or his attorney duly authorized in
writing.
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A $3.00 fee shall be paid by the registered holder for any registration of transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
All Warrant Certificates so surrendered or surrendered for exercise in case of mutilated
Warrant Certificates shall be promptly cancelled by the Warrant Agent and thereafter delivered or
disposed of as directed by the Company in writing.
Prior to due presentment for registration of transfer thereof the Company and the Warrant
Agent may deem and treat the registered holder of any Warrant Certificate as the absolute owner
thereof and of each Warrant represented thereby (notwithstanding any notations of ownership or
writing thereon made by anyone other than the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
Section 7. Loss or Mutilation. Upon receipt by the Company and the Warrant Agent of
evidence satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of
any Warrant Certificate and (in the case of loss, theft or destruction) of indemnity satisfactory
to them, and in the case of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall countersign and deliver in lieu thereof a new Warrant
Certificate representing an equal aggregate number of Warrants. Applicants for a substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 8. Adjustment of Exercise Price and Number of Shares Deliverable. After each
adjustment of the Exercise Price pursuant to this Section 8, the number of Common Shares
purchasable upon the exercise of each Warrant shall be the number derived by dividing such adjusted
Purchase Price into the original Exercise Price as defined in Section 1.E above. The Exercise Price
shall be subject to adjustment as follows:
(a) In the event, prior to the expiration of the Warrant by exercise or by its
terms, the Company shall issue any of its Common Shares as a stock dividend or shall subdivide the
number of outstanding Common Shares into a greater number of shares, then, in either of such
events, the then applicable Exercise Price per Common Share purchasable pursuant to this Warrant in
effect at the time of such action be reduced proportionately and the number of Common Shares at
that time purchasable pursuant to this Warrant shall be increased proportionately; and conversely,
in the event that the Company shall reduce the number of its outstanding Common Shares by
combining such shares into a smaller number of shares, then, in such event, the then applicable
Exercise Price per Common Share purchasable pursuant to this Warrant in effect at the time of such
action shall be increased proportionately and the number of Common Shares at that time purchasable
pursuant to the Warrant proportionately shall be decreased. Any dividend paid or distributed upon
the Common Shares in shares of any other class of the Company or securities convertible into Common
Shares shall be treated as a dividend paid in Common Shares to the extent that such Common Shares
are issuable upon the conversion thereof.
(b) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall be recapitalized by reclassifying its outstanding Common Shares into shares with a
different par value, or by changing its outstanding Common Shares to shares without par value, or
in the
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event the Company or a successor corporation shall consolidate or merge with or convey all or
substantially all of its, or of any successor corporation’s property and assets to any other
corporation or corporations (any such other corporation being included within the
meaning of the term “successor corporation” hereinbefore used in the context of any consolidation
or merger of any other corporation with, or the sale of all or substantially all of the property of
any such other corporation to, another corporation or corporations), or in the event of any other
material change of the capital structure of the Company or of any successor corporation by reason
of any reclassification, reorganization, recapitalization, consolidation, merger or conveyance, a
prompt, proportionate, equitable, lawful and adequate provision shall be made whereby the Holder of
this Warrant shall thereafter have the right to purchase, upon the basis and the terms and
conditions specified in this Warrant, in lieu of the Common Shares of the Company theretofore
purchasable upon the exercise of this Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number of Common Shares of the Company
theretofore purchasable upon the exercise of this Warrant had such reclassification,
reorganization, recapitalization, consolidation, merger or conveyance not taken place; and in any
such event, the rights of the Holder of this Warrant to any adjustment in the number of,
shares of Common Shares purchasable upon exercise of this Warrant, as hereinbefore provided, shall
continue and be preserved in respect of any stock, securities or assets which the Holder becomes
entitled to purchase.
(c) In the event the Company, at any time while this Warrant shall remain unexpired and
unexercised, shall sell all or substantially all of its property, or dissolves, liquidates or winds
up its affairs, prompt, proportionate, equitable, lawful and adequate provision shall be made as
part of the terms of any such sale, dissolution, liquidation, or winding up such that the Holder of
this warrant may thereafter receive, upon exercise hereof, in lieu of each Common Share of the
Company which he would have been entitled to receive, the same kind and amount of any stock,
securities or assets as may be issuable, distributable or payable upon any such sale, dissolution,
liquidation or winding up with respect to each Common Share of the Company; provided however, that
in the event of any such sale, dissolution, liquidation or winding up, the right to exercise this
Warrant shall terminate on a date fixed by the Company, such date so fixed to be not earlier than
5:00 P.M., Mountain Time, on the 30th day next succeeding the date on which notice of such
termination of the right to exercise this Warrant has been given by mail to the Holder of this
Warrant at his address as it appears on the books of the Company.
(d) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall take a record of the holders of its Common Shares for the purpose of entitling them
to purchase its Common Shares at a price per share more than 10% below the then current market
price per share (as defined below) of its Common Shares at the date of taking such record, then,
(i) the number of Common Shares purchasable pursuant to the Warrant shall be redetermined as
follows: the number of Common Shares purchasable pursuant to this Warrant immediately prior to such
adjustment (taking into account fractional interests to the nearest one-thousandth of a share)
shall be multiplied by a fraction, the numerator of which shall be the number of Common Shares of
the Company then outstanding (excluding the Common Shares then owned by the Company) immediately
prior to taking of such record, plus the number of additional shares offered for purchase, and the
denominator of which shall be the number of Common Shares of the Company outstanding (excluding the
Common Shares owned by the Company) immediately prior to the taking of such record, plus
the number of shares which the aggregate offering price of the total number of additional shares so
offered would purchase at such current market price; and (ii) the Exercise Price per Common Share
purchasable pursuant to this Warrant shall be redetermined as follows: the Exercise Price in effect
immediately prior to the taking of such record, shall be
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multiplied by a fraction, the numerator of which is the number of Common Shares purchasable
hereunder immediately prior to the taking of such record, and the denominator of which is the
number of Common Shares purchasable hereunder immediately after the taking of such record as
determined pursuant to clause (i) above. For the purpose hereof, the current market price per
Common Share of the Company at any date shall be deemed to be the average of the daily closing
prices for 30 consecutive business days commencing 45 business days before the day in question. The
closing price for each day shall be the average of the highest bid-and-asked prices as reported by
NASDAQ or, if the Common Shares are not admitted to listing for trading thereon, then in the “pink
sheets” of the National Association of Securities Dealers, Inc., for the over-the-counter market in
Denver, Colorado, or in the local daily newspapers for such city, or if not reported, the average
of the highest bid-and-asked prices as furnished by any member firm of the New York Stock Exchange,
Inc. selected from time to time by the Company for such purpose.
(e) Upon any exercise of this Warrant by the Holder, the Company shall not be required to
deliver fractions of the Common Shares; but prompt proportionate, equitable, lawful and adequate
adjustment in the Exercise Price payable by the Holder shall be made in respect of any such
fraction of one Common Share on the basis of the Exercise Price per share then applicable upon the
exercise of this Warrant.
(f) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall determine to take a record of the holders of its Common Shares for the purpose of
determining shareholders entitled to receive any stock dividend, distribution or other right which
will cause any change or adjustment in the number, amount, price or nature of the Common Shares or
other stock, securities or assets deliverable upon the exercise of this Warrant pursuant to the
foregoing provisions, the Company shall give to the registered Holder of this Warrant at his
address as it appears on the books of the Company at least 15 days prior written notice to the
effect that it intends to take such a record. Such notice shall specify the date as of which such
record is to be taken; the purpose for which such record is to be taken; and the number, amount,
price and nature of the Common Shares or other stock, securities or assets which will be
deliverable upon exercise of this Warrant after the action for which such record will be taken has
been consummated. Without limiting the obligation of the Company to provide notice to the
registered holders of the Warrant Certificates of corporate action hereunder, the failure of the
Company to give notice shall not invalidate such corporate action of the Company.
(g) The Company may deem and treat the registered Holder of this Warrant at any time as the
absolute owner hereof for all purposes, and the Company shall not be affected by any notice to the
contrary.
(h) This Warrant shall not entitle the Holder hereof to any of the rights of shareholders or
to any dividend declared upon the Common Shares unless the Holder shall have exercised this Warrant
and purchased the Common Shares prior to the record date fixed by the Board of Directors of the
Company for the determination of holders of Common Shares entitled to such dividend or other right.
(i) No adjustment of the Exercise Price shall be made as a result of or in connection with (i)
the issuance of Common Shares of the Company pursuant to options, warrants and share purchase
agreements outstanding or in effect on the date hereof, (ii) the granting of additional option
plans
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of the Company as currently or thereafter in effect or as hereafter modified, renewed or extended,
or the issuance of Common Shares of the Company upon exercise of any such options, or (iii) the
issuance of Common Shares in connection with acquisition of any type, in connection with
compensation arrangements with officers, employees or agents of the Company or any Subsidiary, or
under any circumstances other than those set forth in subsection (i) above.
(j) The foregoing subparagraphs (a)-(i) shall be included on the back side of the Warrant
Certificate as a “Statement of Rights of Warrant Holders.”
Section 9. Concerning the Warrant Agent. The Warrant Agent acts hereunder as agent
and in a ministerial capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be issuing and delivering Warrant Certificates or by
any other act hereunder be deemed to make any representations as to the validity or value or
authorization of the Warrant Certificate or the Warrants represented thereby or of any Common
Shares or other property delivered upon exercise of any Warrant or whether any such share is fully
paid and nonassessable. The Warrant Agent shall not at time be under any duty or responsibility to
any holder of Warrant Certificates to make or cause to be made any adjustment of the Exercise Price
provided in this Agreement, or to determine whether any fact exists which may require any such
adjustments, or with respect to the nature or extent of any such adjustment, when made, or with
respect to the method employed in making the same. It shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken, suffered or omitted by it in reliance
on any Warrant Certificate or other document or instrument believed by it in good faith to be
genuine and to have been signed or presented by the proper party or parties, (ii) be responsible
for any failure on the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in the Warrant Certificates, or (iii) be liable for any act or
omission in connection with this Agreement except for its own negligence or willful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it (who may be counsel
for the Company) and shall incur no liability or responsibility for any action taken, suffered or
omitted by it in good faith in accordance with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand of the Company shall
be sufficiently evidenced by an instrument signed by the President, a Vice President, its
Secretary, an Assistant Secretary, its Treasurer, or an Assistant Treasurer (unless other evidence
in respect thereof is herein specifically prescribed). The Warrant Agent shall not be liable for
any action taken, suffered or omitted by it in accordance with such notice, statement, instruction,
request, direction, order or demand.
The Company agrees to pay the Warrant Agent reasonable compensation for its services hereunder
and to reimburse it for its reasonable expenses hereunder; it further agrees to indemnify the
Warrant Agent and save it harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of its duties and powers hereunder except losses, expenses and liabilities arising as a
result of the Warrant Agent’s negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may terminate the Warrant Agent and the
Warrant Agent shall be discharged from all further duties and liabilities hereunder (except
liabilities arising as a result of the Warrant Agent’s own negligence or wilful misconduct), after
giving 30 days’
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prior written notice to the other party. At least 15 days prior to the date such resignation is to
become effective, the Warrant Agent shall cause a copy of such notice of resignation to be mailed
to the registered holder of each Warrant Certificate. Upon such resignation or termination the
Company shall appoint in writing a new 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 by
the resigning Warrant Agent, then the registered holder of any Warrant Certificate may apply to any
court of competent jurisdiction for the appointment of a new warrant agent. Any new warrant agent,
whether appointed by the Company or by such a court, shall be a bank or trust company having a
capital and surplus, as shown by its last published report to its stockholders, of not less than
$1,000,000 and having its principal office in the City of Denver, State of Colorado. After
acceptance in writing of such appointment by the new warrant agent is received by the Company, such
new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the resigning Warrant Agent.
Not later than the effective date of any such appointment the Company shall file notice thereof
with the resigning Warrant Agent and shall forthwith cause a copy of such notice to be mailed to
the registered holder of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new warrant agent may be converted or
merged or any corporation resulting from any consolidation to which the Warrant Agent or any new
warrant agent shall be a party or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor Warrant Agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as successor to the Warrant Agent under
the provisions of the preceding paragraph. Any such successor Warrant Agent shall promptly cause
notice of its succession as Warrant Agent to be mailed to the Company and to the registered holder
of each Warrant Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any of its or their officers or
directors, may buy and hold or sell Warrants or other securities of the Company and otherwise deal
with the Company in the same manner and to the same extent and with like effect as though it were
not Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
Section 10. Modification of Agreement. The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or inconsistent provision or manifest
mistake or error herein contained; or (ii) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates; but this Agreement
shall not otherwise be modified, supplemented or altered in any respect except with the consent in
writing of the registered holders of Warrant Certificates representing not less than 66-2/3% of the
Warrants outstanding; provided, however, that no change in the number or nature of the Warrant
Shares purchasable upon the exercise of a Warrant, or the Exercise Price therefor, or the
Expiration Date of a Warrant, shall be made without the consent in writing of the registered holder
of the Warrant Certificate representing such Warrant, other than such changes as are specifically
prescribed by this Agreement as originally executed.
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Section 11. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when delivered or mailed
first-class postage prepaid or delivered to a telegraph office for transmission:
(i) if to the registered holder of a Warrant Certificate at the address of such holder as
shown on the registry books maintained by the Warrant Agent; or
(ii) if to the Company at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention:
President, or at such other address as may have been furnished to the Warrant Agent in writing by
the Company; or
(iii) if to the Warrant Agent at the Corporate Office.
Section 12. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Colorado.
Section 13. Persons Benefiting. This Agreement shall be binding upon and inure to
the benefit of the Company, the Warrant Agent and their respective successors and assigns, and the
holders from time to time of the Warrant Certificates or any of them. Nothing in this Agreement is
intended or shall be construed to confer upon any other person any right, remedy or claim or to
impose upon any other person any duty, liability or obligation.
Section 14. Execution. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above mentioned.
| PARALLEL PETROLEUM CORPORATION |
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| By: | /s/ Xxxxx X. Xxxxx | |||
| Xxxxx X. Xxxxx, President | ||||
| AMERICAN STOCK TRANSFER, INC., as Warrant Agent |
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| By: | /s/ Signature Illegible | |||
| Authorized Officer | ||||
10
