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Exhibit 1
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THE WARRANT OR AN
APPLICABLE EXEMPTION FROM REGISTRATION.
IMPERIAL PETROLEUM RECOVERY CORPORATION
Warrant for the Purchase of Shares of Common Stock
FOR VALUE RECEIVED, IMPERIAL PETROLEUM RECOVERY CORPORATION, a Nevada
corporation (the "Company"), hereby certifies that Maya LLC (a Nevada limited
liability company), or its permitted assigns, is entitled to purchase from the
Company 3,500,000 fully paid and nonassessable shares of the common stock, $.001
par value, of the Company for an aggregate purchase price of $3,500,000
(computed on the basis of $1.00 per share), as such number of shares and per
share price may be adjusted as hereinafter provided. (Hereinafter, (i) said
common stock, together with any other equity securities that may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock"; (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares"; (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price"; (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price"; (v) this Warrant and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrants"; and (vi) the holder of this Warrant is referred
to as the "Holder.
1. Exercise of Warrant. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on December 11, 1997 and ending at
5:00 p.m., Houston, Texas time then current, on December 11, 2001 (or on the
next business day, if the Company is closed for business on that date), by
surrendering this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Company. If this
Warrant is exercised in part, it must be exercised for a minimum of 25,000
Warrant Shares and for whole shares of Common Stock, and the Holder is entitled
to receive a new Warrant covering the number of Warrant Shares in respect of
which this Warrant has not been exercised and setting forth the proportionate
part of the Aggregate Warrant Price applicable to such Warrant Shares. Upon such
surrender of this Warrant, the Company will (a) issue a certificate or
certificates in the name of the Holder for the largest number of whole shares of
the Common Stock to which the Holder shall be entitled and, if this Warrant is
exercised in whole, in lieu of any fractional shares of the Common Stock to
which the Holder shall be entitled, cash equal to the fair value of such
fractional share (determined in such reasonable manner as the Board of Directors
of the Company shall determine), and (b) deliver any other securities and
property receivable upon the exercise of this Warrant, or the appropriate
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
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2. Reservation of Warrant Shares. The Company agrees that, until the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, and will keep available, solely for issuance and delivery upon the
exercise of this Warrant, the shares of the Common Stock and other securities
and property as from time to time shall be receivable upon the exercise of this
Warrant, free and clear of all restrictions on sale or transfer and free and
clear of all preemptive rights.
3. Protection Against Dilution.
(a) If, at any time or from time to time after the date of this Warrant,
the Company shall distribute to the holders of Common Stock (i) securities other
than shares of the Common Stock, or (ii) property other than cash, without
payment therefor, with respect to Common Stock, then, and in each such case, the
Holder, upon the exercise of this Warrant, shall be entitled to receive the
securities and property that the Holder would hold on the date of such exercise
if, on the date of this Warrant, the Holder had been the holder of record of the
number of shares of Common Stock subscribed for upon such exercise and, during
the period from the date of this Warrant to and including the date of such
exercise, had retained such shares and the securities and property receivable by
the Holder during such period. Notice of each such distribution shall be
forthwith given to the Holder.
(b) In case the Company shall hereafter (i) pay a dividend in shares of
Common Stock or make a distribution on its capital stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issue by reclassification of its Common Stock
any shares of capital stock of the Company, the Per Share Warrant Price in
effect immediately before such action shall be adjusted so that the Holder of
any Warrant surrendered for exercise immediately thereafter would be entitled to
receive the number of shares of Common Stock or other capital stock of the
Company that the Holder would have owned immediately following such action had
such Warrant been exercised immediately before such action. An adjustment made
pursuant to this Subsection 3(b) becomes effective immediately after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination,
or reclassification. If, as a result of an adjustment made pursuant to this
Subsection 3(b), the holder of any Warrant thereafter surrendered for exercise
becomes entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the Board of
Directors (whose determination shall be conclusive on this issue and shall be
described in the certificate required to be delivered to the Holder of this
Warrant promptly after such adjustment under Subsection 3(g)) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(c) In case the Company shall sell or issue shares of Common Stock, or
rights, options, warrants, or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock at a price per
share of Common Stock (determined, in the case of such rights, options,
warrants, or convertible or exchangeable securities, by dividing (X) the total
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amount receivable by the Company in consideration of the sale and issuance of
such rights, options, warrants, or convertible or exchangeable securities, plus
the total consideration payable to the Company upon exercise, conversion, or
exchange thereof, by (Y) the total number of shares of Common Stock covered by
such rights, options, warrants, or convertible or exchangeable securities) that
is lower than the Per Share Warrant Price, then the Per Share Warrant Price
shall be adjusted so that it shall equal the price per share of Common Stock at
which such Common Stock or other securities were sold or issued. Such adjustment
shall be made successively whenever such a sale or issuance occurs.
The number of Warrant Shares shall also be adjusted and shall be that
number determined by multiplying the number of shares of Common Stock issuable
upon exercise immediately before the adjustment by a fraction, the numerator of
which shall be the Per Share Warrant Price in effect immediately before the
adjustment and the denominator of which shall be the Per Share Warrant Price as
so adjusted. For the purposes of adjustments, the shares of Common Stock which
the holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of the sale or issuance of the rights,
warrants, or convertible or exchangeable securities and the consideration
received by the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants, or convertible or
exchangeable securities, plus the consideration or premiums stated in such
rights, options, warrants or convertible or exchangeable securities to be paid
for the shares of Common Stock covered thereby. In case the Company shall sell
or issue shares of Common Stock or rights, options, warrants, or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then in determining the "price per share of
Common Stock" and the "consideration received by the Company," the Board of
Directors of the Company shall determine, in good faith, the fair value of said
property.
(d) No adjustment in the Per Share Warrant Price or number of Warrant
Shares shall be required in the case of the sale or issuance by the Company of
(i) shares of Common Stock upon the exercise of stock options granted or to be
granted by the Company from time to time to directors, employees or consultants
for bona fide services rendered or (ii) the Common Stock issuable upon the
exercise of this Warrant or other warrants.
(e) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Company), the Holder shall have the right thereafter to
convert this Warrant into the kind and amount of securities, cash, or other
property that the Holder would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale, or
conveyance had such Warrant been exercised immediately before the effective date
of such consolidation, merger, statutory exchange, sale, or conveyance and in
any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Subsection 3(e) with respect to
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the rights and interests thereafter of the Holder to the end that the provisions
set forth in this Section 3 shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any securities or property
thereafter deliverable on the exercise of this Warrant. The above provisions of
this Subsection 3(e) shall similarly apply to successive consolidations,
mergers, statutory exchanges, sales, or conveyances. Notice of any such
consolidation, merger, statutory exchange, sale, or conveyance shall be given to
the Holder not less than 30 days before such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
(f) No adjustment in the Per Share Warrant Price shall be required
unless the adjustment would require an increase or decrease of at least $0.05
per share of Common Stock; provided, however, that any adjustments which by
reason of this Subsection 3(f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment, and provided
further, however, that adjustments shall be required and made in accordance with
the provisions of this Section 3 (other than this Subsection 3(f)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution to the Holder. All calculations under this Section 3 shall be made
to the nearest cent or to the nearest 1/100th of a share, as the case may be.
Anything in this Section 3 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Per Share Warrant Price, in addition to
those required by this Section 3, as it in its discretion shall deem to be
advisable in order that any stock dividend, subdivision of shares, or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its shareholders shall
not be taxable.
(g) Whenever the Per Share Warrant Price or number of Warrant Shares is
adjusted as provided in this Section 3 and upon any modification of the rights
of a Holder of Warrants in accordance with this Section 3, the Company shall
promptly deliver to the Holder a certificate setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or the effect of
such modification, a brief statement of the facts requiring such adjustment or
modification, and the manner of computing the same. If the Holder disagrees with
the contents of the certificate, the Holder may require the Company to deliver a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors (which may be the regular auditors of the
Company) recomputing the Per Share Purchase Price and the number of Warrant
Shares after the adjustment or the effect of the modification and a brief
statement of the firm's manner of recomputing the same. The firm's recomputation
shall be binding upon the Company and the Holder. One-half of the cost of
obtaining the second certificate shall be borne by the Company and the other
half shall be borne ratably by the Holder and any holders of securities of the
Company that benefit from requiring the second certificate, if such holders are
contractually obligated to contribute to such cost.
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4. Fully Paid Stock; Taxes. The shares of Common Stock represented by
each and every certificate for Warrant Shares delivered on the exercise of this
Warrant shall, at the time of such delivery, be duly authorized, validly issued,
fully paid, and nonassessable, and the Company shall take all such actions as
may be necessary to assure that the par value or stated value, if any, per share
of the Common Stock is at all times equal to or less than the then Per Share
Warrant Price. The Company further covenants and agrees that it will pay, when
due and payable, any and all federal and state stamp, original issue, or similar
taxes that may be payable in respect of the issue of any Warrant Share or
certificate therefor.
5. Provision of Information. For such period as this Warrant is
exercisable, the Company will furnish to the Holder,
(a) contemporaneously with its delivery to holders of the Common Stock,
a copy of each report or other communication delivered to holders of the Common
Stock; and
(b) promptly upon the filing thereof, a copy of each Form 15 (or a
successor form) that the Company files with the U.S. Securities and Exchange
Commission.
6. Transferability. This Warrant is transferable or assignable by the
Holder, but is so transferable and assignable only upon the books that the
Company shall cause to be maintained for the purpose and only if the transfer or
assignment is deemed to be in accordance with all applicable securities laws in
the reasonable judgment of the Company. The Company may treat the registered
holder of this Warrant as he, she, or it appears on the Company's books at any
time as the Holder for all purposes. The Company shall permit any Holder of a
Warrant or the duly authorized attorney of the Holder, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered holders of Warrants.
7. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen, or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor, and
denomination.
8. Warrant Holder Not Shareholder. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, before
the exercise hereof.
9. Communications. No notice, or other communication under this Warrant
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given or delivered if and when, the
same is in writing and is physically delivered or mailed by first-class mail,
postage prepaid, addressed to:
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(a) the Company at 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000, or such other address as the Company has
designated in writing to the Holder, or
(b) the Holder at 0000 Xxxxxxxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000, or such other address as the Holder has designated in
writing to the Company.
10. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
11. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Nevada, without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, IMPERIAL PETROLEUM RECOVERY CORPORATION has caused
this Warrant to be signed by its Vice President as of the 11th day of December
1997.
IMPERIAL PETROLEUM RECOVERY
CORPORATION
By: /s/ X. Xxxxx Xxxxxxxxx
------------------------------
X. Xxxxx Xxxxxxxxx
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SUBSCRIPTION
The undersigned, ________________________________, pursuant to the
provisions of the foregoing Warrant, hereby agrees to subscribe for and purchase
______________ shares of the Common Stock of IMPERIAL PETROLEUM RECOVERY
CORPORATION covered by said Warrant and makes payment therefor in full at the
price per share provided by said Warrant.
Dated: Signature:
Address:
ASSIGNMENT
FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns, and transfers unto _______________________________ the foregoing
Warrant and all rights evidenced thereby, and does irrevocably constitute and
appoint _________________________, attorney, to transfer said Warrant on the
books of IMPERIAL PETROLEUM RECOVERY CORPORATION.
Dated: Signature:
Address:
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, __________________________________ hereby sells and
transfers unto _________________________ the right to purchase ______________
________ shares of the Common Stock of IMPERIAL PETROLEUM RECOVERY CORPORATION
granted by the foregoing Warrant, and a proportionate part of said Warrant and
the rights evidenced thereby, and does irrevocably constitute and appoint
___________________________, attorney, to transfer that part of said Warrant on
the books of IMPERIAL PETROLEUM RECOVERY CORPORATION.
Dated: Signature:
Address:
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