Exhibit 3
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Document No. 165607
THIS WARRANT AND THE SHARES OF THE COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT IN CONJUNCTION WITH
A SALE, PLEDGE, TRANSFER OR ASSIGNMENT OF PREFERRED STOCK OR COMMON STOCK
AS DESCRIBED HEREIN, AND EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO
THE COMPANY OF AN OPINION SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH SALE, PLEDGE, ASSIGNMENT OR TRANSFER.
THE TRANSFER OF THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF IS SUBJECT TO COMPLIANCE WITH THE CONDITIONS SPECIFIED
BELOW, AND NO TRANSFER OF THIS WARRANT OR SUCH SHARES SHALL BE VALID UNTIL
SUCH CONDITIONS HAVE BEEN FULFILLED.
CROWN ENERGY CORPORATION
COMMON STOCK PURCHASE WARRANT DATED ______________, 1997, AND
EXPIRING ____________, 2007
This is to Certify That, for value received, Enron Capital & Trade
Resources Corp., a Texas corporation, or its permitted assignee (the "Holder"),
upon due exercise of this Warrant, is entitled to purchase from Crown Energy
Corporation, a Utah corporation (the "Company"), before the close of business
on___________, 2007 (the "Expiration Date"), such number of fully paid and
nonassessable shares of common stock, par value $.02 per share, of the Company
("Common Stock"), that will enable the Holder to subscribe for and purchase, at
a per share Exercise Price of $.002 (the "Exercise Price"), up to eight percent
(8%) of the shares of Common Stock, measured as of the date hereof, on a fully
diluted basis (the "Initial Amount ") (subject to adjustment herein).
This Warrant is hereinafter called the "Warrant" and the shares of Common
Stock issuable upon exercise hereof are hereinafter called the "Warrant Shares."
This Warrant is issued by the Company pursuant to the Stock Purchase Agreement
between the Holder and the Company dated as of the date of this Warrant (the
"Stock Purchase Agreement"). Any capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Stock Purchase Agreement.
ARTICLE I
EXERCISE OF WARRANT
1.1 Expiration of Warrant. Except as otherwise provided herein, the
Holder may exercise this Warrant at any time on or after the fifth anniversary
of the date hereof and on or before the Expiration Date. Notwithstanding the
other provisions of this Section, this Warrant shall not be exercised after the
close of business on the Expiration Date.
1.2 Exercise of Warrant.
1.2.1 The Holder of this Warrant may, at any time on or after the
fifth anniversary of the date hereof and on or before the Expiration Date,
exercise this Warrant for the purchase of the shares of Common Stock which such
Holder is entitled to purchase hereunder at the Exercise Price. In order to
exercise this Warrant, the Holder hereof shall deliver to the Company (i) a
written notice of such Holder's election to exercise this Warrant, (ii) payment
of the aggregate Exercise Price of the shares of Common Stock being purchased in
cash or by certified or cashier's check, and (iii) this Warrant; provided that,
in case such shares shall not have been registered under the Securities Act of
1933, as amended (the "Securities Act"), the Company may require that such
Holder furnish to the Company a written statement that such Holder is purchasing
such shares for such Holder's own account for investment and not with a view to
the distribution thereof, and that none of such shares will be offered or sold
in violation of the provisions of the Securities Act or other applicable state
securities laws. Upon receipt thereof, the Company shall, as promptly as
practicable but in any event within 30 days, execute or cause to be executed and
deliver to such Holder a certificate or certificates representing the aggregate
number of shares of Common Stock obtained pursuant to the exercise of this
Warrant. The stock certificate or certificates so delivered shall be in such
denominations as may be specified in said notice and shall be registered in the
name of such Holder or such other name as shall be designated in such notice.
The Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
person so designated or named in such notice shall be deemed to have become a
Holder of record of the Warrant Shares for all purposes as of the date that such
notice is received by the Company.
1.2.2 The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, execution and delivery of stock
certificates under this Section. The Company represents, warrants and agrees
that all shares of Common Stock issuable upon any exercise of this Warrant shall
be validly authorized, duly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof attributable
to any act or omission by the Company, and the Company shall take no action
which will cause a contrary result (including, without limitation, any action
which would cause the Exercise Price to be less than the par value, if any, of
the Common Stock).
ARTICLE II
TRANSFER
2.1 Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's offices at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx
00000, and may subsequently be such other office of the Company or of any
transfer agent of the Common Stock in the continental United States as to which
written notice has previously been given to the Holder hereof. The Company
shall maintain, at the Warrant Office, a register for the Warrant in which the
Company shall record the name and address
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of the Person in whose name this Warrant has been issued, as well as the name
and address of each permitted assignee of the rights of the registered owner
hereof.
2.2 Ownership of Warrants. The Company may deem and treat the Person in
whose name the Warrants are registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration of transfer
an provided in this Article II. Notwithstanding the foregoing, the Warrants
represented hereby, if properly assigned in compliance with this Article II, may
be exercised by an assignee for the purchase of Warrant Shares without having a
new Warrant issued.
2.3 Restrictions on Transfer of Warrants. The Company agrees to maintain
at the Warrant Office books for the registration and transfer of the Warrants.
Subject to the restrictions on transfer of the Warrants in this Section 2.3, the
Company, from time to time, shall register the transfer of the Warrants in such
books upon surrender of this Warrant at the Warrant Office properly endorsed or
accompanied by appropriate instruments of transfer and written instructions for
transfer satisfactory to the Company. Upon any such transfer and upon payment
by the Holder or its transferee of any applicable transfer taxes, new Warrants
shall be issued to the transferee and the transferor (as their respective
interests may appear) and the surrendered Warrant shall be canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses and charges payable in connection with the transfer of
the Warrants pursuant to this Section 2.3.
2.3.1 Restrictions in General. The Holder of the Warrants agrees
that it will neither (i) transfer the Warrants prior to delivery to the Company
of the opinion of counsel referred to in, and to the effect described in,
Section 2.3.2 hereof, or until registration hereof under the Securities Act of
1933 (the "Securities Act") and any applicable state securities or blue sky laws
has become effective, (ii) transfer such Warrant Shares prior to delivery to the
Company of the opinion of counsel referred to in, and to the effect described
in, Section 2.3.2 hereof, or until registration of such Warrant Shares under the
Securities Act and any applicable state securities or blue sky laws has become
effective nor (iii) transfer the Warrants other than together with, and to the
transferee pursuant to, a transfer of Preferred Stock (or of Common Stock
previously issued upon conversion of Preferred Stock), in a transaction in which
the percentage of the Warrants so transferred is equal to the percentage that
the transferred Preferred Stock (and transferred Common Stock previously issued
upon conversion of the Preferred Stock, as applicable) represents of the sum of
all of such Holder's (a) Preferred Stock, and (b) Common Stock previously issued
upon conversion of Preferred Stock (in all instances counting each share of
Preferred Stock as being equal to the number of shares of Common Stock into
which it is then convertible).
2.3.2 Statement of Intention to Transfer; Opinion of Counsel.
Except as otherwise expressly provided herein, by its acceptance hereof the
Holder of the Warrants agrees that, prior to any transfer of the Warrants or any
transfer of the related Warrant Shares, such Holder will deliver to the Company
a statement setting forth the intention of such Holder's prospective transferee
with
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respect to its retention or disposition of the Warrants or of such Warrant
Shares (whichever is involved in such transfer), in either such case together
with a signed copy of the opinion of such Holder's counsel, to the effect that
the proposed transfer of the Warrant or the proposed transfer of the Warrant
Shares may be effected without registration under the Securities Act and any
applicable state securities or blue sky laws. The Holder of the Warrant shall
then be entitled to transfer the Warrants or to transfer such Warrant Shares in
accordance with the statement of intention delivered by such Holder to the
Company.
2.3.3 Permitted Transfers. Notwithstanding any provisions
contained in this Warrant to the contrary (other than Section 2.3.1(iii)), this
Warrant may be transferred, in whole or in part, by the Holder hereof without
regard to the requirements and conditions set forth in Sections 2.3.1 and 2.3.2
above if any such transfer is made to any entity that is an Affiliate of such
Holder.
2.4 Compliance with Securities Laws. Notwithstanding any other provisions
contained in this Warrant, the Holder hereof understands and agrees that the
following restrictions and limitations shall be applicable to all Warrant Shares
and to all resales or other transfers thereof pursuant to the Securities Act:
2.4.1 The Holder hereof agrees that the Warrant Shares shall not
be sold or otherwise transferred unless the Warrant Shares are registered under
the Securities Act and applicable state securities or blue sky laws or are
exempt therefrom.
2.4.2 A legend in substantially the following form will be placed
on the certificate(s) evidencing the Warrant Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or under applicable state
securities laws. The shares may not be offered, sold, transferred,
pledged or otherwise disposed of except in connection with a sale,
pledge, transfer or assignment of Preferred Stock or Common Stock (as
described in more detail in the Warrant Agreement with respect to this
certificate), and except pursuant to an effective registration
statement with respect thereto under all applicable securities laws,
or an opinion of counsel satisfactory to Crown Energy Corporation that
such registrations are not required."
2.4.3 Stop transfer instructions will be imposed with respect to
the Warrant Shares so as to restrict resale or other transfer thereof, subject
to this Section 2.4.
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ARTICLE III
ANTI-DILUTION
3.1 Anti-Dilution Provisions. The Exercise Price shall be subject to
adjustment from time to time as hereinafter provided. Upon each adjustment of
the Exercise Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
3.2 Basic Calculation of Warrant Shares. Upon the fifth
anniversary of the date hereof, the Warrant will become exercisable into a
number of Warrant Shares equal to (a) the sum of the Purchase Price plus the
product of (i) the Purchase Price multiplied by (ii) 39% multiplied by (iii) 5
(the "39% Internal Rate of Return") minus (b) the sum of (i) all dividends and
other distributions paid by Company on the Preferred Stock or on the Common
Stock received upon conversion of the Preferred Stock, plus (ii) the greater of
the proceeds from the sale of any Common Stock received by the Holder from the
conversion of the Preferred Stock prior to the fifth anniversary hereof, or the
Terminal Value (as defined below) of such Common Stock sold prior to the fifth
anniversary hereof, plus (iii) the Terminal Value of the Preferred Stock and the
Common Stock received upon conversion of the Preferred Stock then held; divided
by (c) the Fair Market Value (as defined below) of the Company's Common Stock on
a weighted average basis for the 90 days immediately preceding the fifth
anniversary of the date hereof. "Terminal Value" is defined as the (x) sum of
(i) the shares of Common Stock into which the Preferred Stock then held is
convertible, plus (ii) shares of Common Stock received upon conversion of
Preferred Stock, multiplied by (y) the Fair Market Value (as defined below) of
the Company's Common Stock on a weighted average basis for the ninety (90) days
immediately preceding the fifth anniversary of the date hereof.
For example, as is expressed herein, the 39% Internal Rate of Return
equates to $14,750,000. If, on the third anniversary of the delivery of this
Warrant, the Holder sold 50% of the shares of Common Stock receivable upon the
conversion of the Preferred Stock (2,143,474 shares), at a per share price of $3
and the Terminal Value for such shares of Common Stock prevailing on both the
date of sale and the fifth anniversary of this Warrant is $2.50 per share, the
amount realized by the Holder would be $13,789,107 ($6,430,422 in sales
proceeds, $5,358,685 in Terminal Value on the fifth anniversary, and $2,000,000
in dividends). Consequently, pursuant to the equations set forth above, the
Holder would receive a total of 384,357 Warrants to achieve the 39% Internal
Rate of Return ($14,750,000 minus $13,789,107 equals $960,893 divided by $2.50).
In the event that (a-b) divided by (c) above should equal zero, no Warrant
Shares would be issued hereunder.
For purposes hereof, the terms "Fair Market Value" on any date shall
mean (i) if the Common Stock is listed or admitted to trade on a national
securities exchange or national market system, the closing price of the Common
Stock, as published in the Wall Street Journal or, if there is no trading of the
Common Stock on such date, then the closing price on the next preceding date on
which there
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was trading of such shares; (ii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or national market system, the mean
between the bid and asked price for the Common Stock on such date, as furnished
by the National Association of Securities Dealers, Inc., through NASDAQ or a
similar organization if NASDAQ is no longer reporting such information; or (iii)
if the Common Stock is not listed or admitted to trade on a national securities
exchange or national market system and if bid and asked price for the Common
Stock are not so furnished through NASDAQ or a similar organization, the market
value established by the Board of Directors as fairly reflecting the worth of
the Corporation.
If the number of Warrant Shares, as calculated pursuant to the above
formula, is zero or less than zero, then this Warrant Agreement shall terminate
automatically.
3.3 Adjustment of Initial Amount. The Initial Amount shall be
increased to maintain the Initial Amount of 8% (measured at the fifth
anniversary of the date hereof) with respect to any common shares or common
share equivalents (including without limitation common shares or common share
equivalents into which any Options or Convertible Securities (as defined herein)
are convertible) issued in connection with:
(a) any aspect (including without limitation the construction,
startup or operation) of the Project, or of the next two oil sands
processing facilities in the Project Area (as defined in the Operating
Agreement) having a capacity of at least 660,000 tons/year (in raw
materials) to be developed by the Corporation, any Subsidiary, Crown
Asphalt Ridge or any other entity in which the Corporation has a
direct or indirect financial interest; or
(b) the compensation of any employee, director, consultant or
other service provider of the Corporation or any Subsidiary thereof
(other than Options to acquire up to 5% of the Corporation's Common
Stock (having an exercise price equal to or less than the Fair Market
Value of the Common Stock at the fifth anniversary of the date
hereof), to be granted as incentive compensation to key management
personnel of the Corporation).
3.4 Stock Splits and Reverse Splits. In the event that the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares (by way of dividend, split or otherwise), the Exercise Price in
effect immediately prior to such subdivision shall be proportionately reduced
and the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such subdivision shall be proportionately increased, and
conversely, in the event that the outstanding shares of Common Stock shall at
any time be combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall be proportionately increased
and the number of Warrant Shares purchasable upon the exercise of this Warrant
immediately prior to such combination shall be proportionately reduced. Except
as provided in this Section 3.4 no adjustment in the Exercise Price and no
change in the number of Warrant Shares purchasable shall be made under this
Article III as a result of or by reason of any such subdivision or combination.
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3.5 Reorganizations and Asset Sales. If any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation,
merger or share exchange of the Company with another Person, or the sale,
transfer or other disposition of all or substantially all of its assets to
another Person shall be effected in such a way that holders of Common Stock
shall be entitled to receive capital stock, securities or assets with respect to
or in exchange for their shares, then the following provisions shall apply:
3.5.1 As a condition of such reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer or other disposition
(except as otherwise provided below in this Section 3.4), lawful and adequate
provisions shall be made whereby the Holders of Warrants shall thereafter have
the right to purchase and receive upon the terms and conditions specified in
this Warrant and in lieu of the Warrant Shares immediately theretofore
receivable upon the exercise of the rights represented hereby, such shares of
capital stock, securities or assets of the surviving entity (the "Successor
Person") as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of Warrant Shares
immediately theretofore so receivable, had such reorganization,
reclassification, consolidation, merger, share exchange or sale not taken place,
and in any such case appropriate provision reasonably satisfactory to such
Holder shall be made with respect to the rights and interests of such Holder to
the end that the provisions hereof (including, without limitation, provisions
for adjustments of the Exercise Price and of the number of Warrant Shares
receivable upon the exercise) shall thereafter be applicable, as nearly as
possible, in relation to any shares of capital stock, securities or assets
thereafter deliverable upon the exercise of Warrants.
3.5.2 In the event of a merger, share exchange or consolidation of
the Company with or into another Person as a result of which a number of shares
of common stock or its equivalent of the Successor Person greater or lesser than
the number of shares of Common Stock outstanding immediately prior to such
merger, share exchange or consolidation are issuable to holders of Common Stock,
then the Exercise Price in effect immediately prior to such merger, share
exchange or consolidation shall be adjusted in the same manner as though there
were a subdivision or combination of the outstanding shares of Common Stock.
3.5.3 The Company shall not effect any such consolidation, merger,
share exchange, sale, transfer or other disposition unless prior to or
simultaneously with the consummation thereof the Successor Person (if other than
the Company) resulting from such consolidation, share exchange or merger or the
Person purchasing or otherwise acquiring such assets shall have assumed by
written instrument executed and mailed or delivered to the Holder hereof at the
last address of such Holder appearing on the books of the Company the obligation
to deliver to such Holder such shares of capital stock, securities or assets as,
in accordance with the foregoing provisions, such Holder may be entitled to
receive, and all other liabilities and obligations of the Company hereunder.
Upon written request by the Holder hereof, such Successor Person will issue a
new Warrant revised to reflect the modifications in this Warrant effected
pursuant to this Section 3.5.
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3.5.4 If a purchase, tender or exchange offer is made to and accepted
by the holders of 50% or more of the outstanding shares of Common Stock the
Company shall not effect any consolidation, merger, share exchange or sale,
transfer or other disposition of all or substantially all of the Company's
assets with the Person having made such offer or with any affiliate of such
Person, unless prior to the consummation of such consolidation, merger, share
exchange, sale, transfer or other disposition the Holder hereof shall have been
given a reasonable opportunity to then elect to receive upon the exercise of the
Warrants either the capital stock, securities or assets then issuable with
respect to the Common Stock or the capital stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer.
3.6 Record Date. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (i) to receive a dividend
or other distribution payable in Common Stock or any stock or securities
convertible into or exchangeable for Common Stock ("Convertible Securities"), or
options, rights or warrants to acquire same ("Options"), or (ii) to subscribe
for or purchase Common Stock, Convertible Securities or Options, then such
record date shall be deemed to be the date of the issuance or sale of the Common
Stock, Convertible Securities or Options deemed to have been issued or sold as a
result of the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be..
3.7 Adjustment for Asset Distribution. If the Company declares a dividend
or other distribution payable to all holders of shares of Common Stock in
evidences of indebtedness of the Company or other assets of the Company
(including, cash (other than regular cash dividends declared by the Board of
Directors), capital stock (other than Common Stock, Convertible Securities or
Options) or other property), the Exercise Price in effect immediately prior to
such declaration of such dividend or other distribution shall be reduced by an
amount equal to the amount of such dividend or distribution payable per share of
Common Stock, in the case of a cash dividend or distribution, or by the fair
value of such dividend or distribution per share of Common Stock (as reasonably
determined in good faith by the Board of Directors of the Company), in the case
of any other dividend or distribution. Such reduction shall be made whenever
any such dividend or distribution is made and shall be effective as of the date
as of which a record is taken for purpose of such dividend or distribution or,
if a record is not taken, the date as of which holders of record of Common Stock
entitled to such dividend or distribution are determined.
3.8 De Minimis Adjustments. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one share of Common Stock
purchasable upon an exercise of each Warrant and no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least $.01 in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 3.8 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest full share or nearest one
hundredth of a dollar, as applicable.
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3.9 Notice of Adjustment. Whenever the Exercise Price or the number of
Warrant Shares issuable upon the exercise of the Warrant shall be adjusted as
herein provided, or the rights of the Holder hereof shall change by reason of
other events specified herein, the Company shall compute the adjusted Exercise
Price and the adjusted number of Warrant Shares in accordance with the
provisions hereof and shall prepare an Officer's Certificate setting forth the
adjusted Exercise Price and the adjusted number of Warrant Shares issuable upon
the exercise of the Warrant or specifying the other shares of stock, securities
or assets receivable as a result of such change in rights, and showing in
reasonable detail the facts and calculations upon which such adjustment or other
changes are based, and shall obtain an opinion of the Company's independent
accountants as to the correctness of such adjustments and calculations and to
the effect that such adjustments and calculations have been made in accordance
with the terms hereof. The Company shall cause to be mailed to the Holder
hereof copies of such Officer's Certificate and an independent accountants'
opinion together with a notice stating that the Exercise Price and the number of
Warrant Shares purchasable upon exercise of the Warrants have been adjusted and
setting forth the adjusted Exercise Price and the adjusted number of Warrant
Shares purchasable upon the exercise of the Warrants.
3.10 Notifications to Holders. In case at any time the Company proposes:
(i) to offer for subscription pro rata to all of the holders of its
Common Stock any additional shares of capital stock of any class or other
rights;
(ii) to effect any capital reorganization, or reclassification of the
capital stock of the Company, or consolidation, merger or share exchange of the
Company with another Person, or sale, transfer or other disposition of all or
substantially all of its assets; or
(iii) to effect a voluntary or involuntary dissolution,
liquidation or winding up of the Company,
then, in any one or more of such cases, the Company shall give the Holder hereof
(a) at least 15 days (but not more than 90 days) prior written notice of the
date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in respect of any such issuance, reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer, disposition, dissolution,
liquidation or winding up, and (b) in the case of any such issuance,
reorganization, reclassification, consolidation, merger, share exchange, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 15 days
(but not more than 90 days) prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (a) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled thereto, and
such notice in accordance with the foregoing clause (b) shall also specify the
date on which the holders of Common Stock shall be entitled to exchange their
Common Stock, as the case may be, for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, share
exchange, sale, transfer, disposition, dissolution, liquidation or winding up,
as the case may be.
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3.11 Company to Prevent Dilution. If any event or condition occurs as to
which other provisions of this Article III are not strictly applicable or if
strictly applicable would not fairly protect the exercise or purchase rights of
the Warrants evidenced hereby in accordance with the essential intent and
principles of such provisions, or that might materially and adversely affect the
exercise or purchase rights of the Holder hereof under any provisions of this
Warrant, then the Company shall make such adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such exercise and purchase rights as aforesaid, and any adjustment
necessary with respect to the Exercise Price and the number of Warrant Shares
purchasable hereunder so as to preserve the rights of the Holder hereunder. In
no event shall any such adjustment have the effect of increasing the Exercise
Price as otherwise determined pursuant to this Article III except in the event
of a combination of shares of the type contemplated in Section 3.4 hereof, and
then in no event to an amount greater than the Exercise Price as adjusted
pursuant to Section 3.4 hereof.
3.12 Common Shares. For purposes of this Article 3, the term "common
shares" shall mean (i) the Common Stock or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from no par value to par value, or
from par value to no par value. If at any time as a result of an adjustment
pursuant to Article 3 a holder of shares of Preferred Stock thereafter
surrendered for conversion shall become entitled to receive any shares of the
Corporation other than common shares, thereafter the number of such other shares
so receivable upon conversion of shares of Preferred Stock 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 in Article 3,
and the other provisions of this Article 3 with respect to the common shares
shall apply on like terms to any such other shares.
ARTICLE IV
MISCELLANEOUS
4.1 Notices. Any notice or other document required or permitted to be
given or delivered to the Holder of this Warrant and the Holder of the Warrant
Shares shall be sent by certified or registered mail to each such Holder at the
address shown on such Holder's Warrant or such other address as shall have been
furnished to the Company in writing by such Holder. Any notice or other
document required or permitted to be given or delivered to the Company shall be
sent by certified or registered mail to the principal office of the Company, 000
Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx, xx such other address as shall
have been furnished to the Holder of this Warrant and the Holder of Warrant
Shares by the Company.
4.2 Governing Law. This Warrant shall be governed by the laws of the
State of Texas, without respect to the law or principles of conflicts-of-law of
any state.
4.3 Entire Agreement. This Warrant, together with the Agreement, contain
the entire agreement between the Holder hereof and the Company with respect to
the Warrant Shares
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purchasable upon exercise hereof and the related transactions and supersedes all
prior arrangements or understandings with respect thereto.
4.4 Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the Holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant shall be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way effect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
4.5 Illegality. ln the event that any or more of the provisions contained
in this Warrant shall be determined to be invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any
such provision in any other respect and the remaining provisions of this Warrant
shall not, at the election of the party for whom the benefit of the provision
exists, be in any way impaired.
4.6 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of this Warrant, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity or such other security in such
form and amount as shall be reasonably satisfactory to the Company, or in the
event of such mutilation upon surrender and cancellation of this Warrant, the
Company will make and deliver a new Warrant of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any Warrant issued under the provisions
of this Section 4.6 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or in lieu of any mutilated Warrant, shall constitute an original
contractual obligation on the part of the Company. This Warrant shall be
promptly canceled by the Company upon the surrender hereof in connection with
any exchange or replacement. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses and charges payable in
connection with the preparation, execution and delivery of Warrants pursuant to
this Section 4.6.
4.7 Registration Rights. The Warrants Shares shall be entitled to such
registration rights under the Securities Act and under applicable state
securities laws as are specified in the Stock Purchase Agreement.
4.8 Headings. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
name by an authorized officer and accepted by the Holder as of the _________ day
of __________, 1997.
CROWN ENERGY CORPORATION
By:__________________________________
Name: _______________________________
Title: ______________________________
ACCEPTED:
DATE: ____________________
ENRON CAPITAL & TRADE RESOURCES CORP.
By:___________________________________
Name: ________________________________
Title: _______________________________
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ASSIGNMENT
TO BE EXECUTED BY THE REGISTERED HOLDER
IF IT DESIRES TO TRANSFER THE WARRANT
Subject to the provisions of Section 2.3, for value received,
_______________________ hereby sells, assigns and transfers unto
________________________ the right to purchase _________ shares of Common Stock,
evidenced by the within Warrant, and does hereby irrevocably constitute and
appoint ___________________ Attorney to transfer the said Warrant on the books
of the Company, with full power of substitution.
_________________________________________
Signature
_________________________________________
_________________________________________
Address
Dated:_____________________
In the presence of:
___________________________
NOTICE
The signature of the foregoing Assignment must correspond to the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
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NOTICE OF EXERCISE
TO BE EXECUTED BY THE REGISTERED HOLDER
IF IT DESIRES TO EXERCISE THE WARRANT
The undersigned hereby exercises the right to purchase such number of
shares of stock covered by this Warrant according to the conditions thereof and
herewith makes full payment of the Exercise Price for such shares.
_________________________________________
Signature
_________________________________________
_________________________________________
Address
Dated:____________________
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