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EXHIBIT 2.1
WARRANT AGREEMENT
BETWEEN
XXXXXX OIL AND GAS COMPANY
AND
HOLDERS SET FORTH
ON SCHEDULE A
DATED AS OF JANUARY 18, 1996
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WARRANT AGREEMENT dated as of January 18, 1996 (the "Agreement"), by
Xxxxxx Oil and Gas Company, a Delaware corporation (the "Company") for the
benefit of the individuals listed on Schedule A hereto("Holder").
WHEREAS, the Company proposes to issue to the Holder common
stock purchase warrants (the "Warrants") to purchase up to the number of
shares(the "Warrant Shares") of the Company's Common Stock, par value $.01 per
share (the "Common Stock") set forth opposite Holder's name on Schedule A
hereto, each Warrant entitling the holder thereof to purchase one share of
Common Stock.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein and for other good and valuable consideration, the
parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will
issue and deliver the Warrants to Holder, in consideration for, and as part of
the compensation to Holder in connection with the sale of the assets of the
Partnership. The number of Warrants to be issued and delivered shall be as set
forth opposite Holder's name on Schedule A hereto. No cash consideration will
be paid by Holder for the Warrants. The text of each Warrant, of the purchase
form and of each assignment form to be printed on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. The Warrants shall be
executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman of the Board, President, Treasurer or Vice
President of the Company, under its corporate seal, affixed or in facsimile,
attested by the manual or facsimile signature of the present or future
Secretary or an Assistant Secretary of the Company. A Warrant bearing the
manual or facsimile signature of individuals who were at any time the proper
officers of the Company shall bind the Company notwithstanding that such
individuals or any of them shall have ceased to hold such offices prior to the
delivery of such Warrant or did not hold such offices on the date of this
Agreement.
Warrants shall be dated as of the date of execution thereof by
the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
2. REGISTRATION. The Warrants shall be numbered and shall
be registered on the books of the Company (the "Warrant Register") as they are
issued. The Company shall be entitled to treat the registered holder of any
Warrant on the Warrant Register (the "Holder") as the owner in fact thereof for
all purposes and shall not be bound to recognize any equitable or other claim
to or interest in such Warrant on the part of any other person, and shall not
be liable for any registration or transfer of Warrants which are registered or
to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is committing
a breach of trust in requesting such registration or transfer, or with
knowledge of such facts that its participation therein amounts to bad faith.
The Warrants shall be registered initially in the name of Holder in such
denominations as Holder may request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any
restriction upon transfer set forth in this Agreement, each Warrant certificate
may be exchanged at the option of the Holder thereof for another certificate or
certificates of different denominations entitling the Holder thereof to
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purchase upon surrender to the Company or its duly authorized agent a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle such Holder to purchase. Any Holder desiring to
exchange a Warrant certificate or certificates shall make such request in
writing delivered to the Company, and shall surrender, properly endorsed, the
certificate or certificates to be so exchanged. Thereupon, the Company shall
execute and deliver to the person entitled thereto a new Warrant certificate or
certificates, as the case may be, as so requested. Any Warrant issued upon
exchange, transfer or partial exercise of the Warrants shall be the valid
obligation of the Company, evidencing the same generic rights and entitled to
the same generic benefits under this Agreement as the Warrants surrendered for
such exchange, transfer or exercise.
4. WARRANT TERMS.
4.1. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Holder thereof to purchase
one share of Common Stock subject to adjustment in accordance with
Section 8 hereof at any time from 9:00 A.M., Los Angeles time, on
January 18, 1996, until 5:00 P.M., Los Angeles time, on January
18, 1999(the "Expiration Date") at a purchase price of $11.00 per
share.
(b) The Warrant Price and the number of shares issuable
upon exercise of Warrants are subject to adjustment upon the
occurrence of certain events, pursuant to the provisions of
Section 8 of this Agreement. Subject to the provisions of this
Agreement, each Holder shall have the right, which may be
exercised as expressed in such Warrants, to purchase from the
Company (and the Company shall issue and sell to such Holder) the
number of fully paid and nonassessable shares of Common Stock
specified in such Warrants, upon surrender to the Company, or its
duly authorized agent, of such Warrants, with the purchase form
on the reverse thereof duly filled in and signed, and upon payment
to the Company of the Warrant Price, as adjusted in accordance
with the provisions of Section 8 of this Agreement, for the number of
shares in respect of which such Warrants are then exercised. Payment
of such Warrant Price may be made only in cash, or by certified or
official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price
as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Holder and (subject to
receipt of evidence of compliance with the act in accordance with the
provisions of Section 10 of this Agreement) in such name or names as the Holder
may designate, a certificate or certificates for the number of full shares of
Common Stock so purchased upon the exercise of such Warrants, together with
cash, as provided in Section 9 of this Agreement, in respect of any fraction of
a share of such stock otherwise issuable upon such surrender. Such certificate
or certificates shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a holder of
record of such shares as of the date of the surrender of such Warrants and
payment of the Warrant Price as aforesaid; PROVIDED, HOWEVER, that if, at the
time of surrender of the Warrant and payment of such Warrant Price, the
transfer books for the Common Stock or other class of stock purchasable upon
the exercise of the Warrants shall be closed, the certificates for the shares
in respect of which the Warrants are then exercised
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shall be issuable as of the date on which such books shall next be opened
whether before, on or after the Expiration Date and until such date the Company
shall be under no duty to deliver any certificate for such shares; PROVIDED,
FURTHER, however, that the transfer books shall not be closed at any one time
for a period longer than five days unless otherwise required by law. The rights
of purchase represented by the Warrants shall be exercisable, at the election
of the Holders thereof, either in full or from time to time in part and, in the
event that any Warrant is exercised in respect of less than all of the shares
purchasable on such exercise at any time prior to the Expiration Date, a new
certificate evidencing the remaining Warrant or Warrants will be issued.
4.2. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants
that if any shares of Common Stock required to be reserved for purposes of
exercise or conversion of Warrants require, under any Federal or state law or
applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange, before such shares may be issued upon
exercise, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares to be duly registered, approved or listed on the
relevant national securities exchange, as the case may be, provided, however,
that in no event shall such shares of Common Stock be issued, and the Company
is hereby authorized to suspend the exercise of all Warrants, for the period
during which such registration, approval or listing is required but not in
effect.
5. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants and any securities issued pursuant to Section 8
hereof; PROVIDED, HOWEVER, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any Warrants or certificates for Warrant Shares and any
securities issued pursuant to Section 8 hereof in a name other than that of the
Holder of such Warrants.
6. MUTILATED OR MISSING WARRANTS. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant, or in lieu of and in substitution for
the Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent right or interest; but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction of
such Warrant and indemnity or bond, if requested, also reasonably satisfactory
to the Company. An applicant for such substitute Warrants shall also comply
with such other reasonable regulations and pay such other reasonable charges as
the Company may prescribe.
7. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION
OF WARRANTS. Thave been reserved out of the authorized and unissued shares
of Common Stock, a number of shares sufficient to provide for the exercise of
the rights of purchase represented by the Warrants, and the transfer agent for
the Common Stock ("Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every
subsequent transfer agent for any shares of the Company's capital stock
issuable upon
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the exercise of the rights of purchase represented by the Warrants. The Company
will supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be issuable as provided in Section
9 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section
8.3 hereof. All Warrants surrendered in the exercise of the rights thereby
evidenced shall be cancelled, and such cancelled Warrants shall constitute
sufficient evidence of the number of shares of stock which have been issued
upon the exercise of such Warrants (subject to adjustment as herein provided).
No shares of stock shall be subject to reservation in respect of the Warrants
subsequent to the Expiration Date except to the extent necessary to comply with
the terms of this Agreement.
8. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
number and kind of securities purchasable upon the exercise of each Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined.
8.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price shall be
subject to adjustment as follows:p
(a) In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities of
the Company (including any such reclassification in connection with
a consolidation or merger in which the Company is the surviving
corporation), the number of Warrant Shares purchasable upon exercise
of each Warrant immediately prior thereto shall be adjusted so that
the Holder of each Warrant shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive after the happening
of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any
record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event
or at the time of any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately
after the effective date of such event retroactive to the record
date, if any, for such event.
(b) In case the Company shall issue rights, options
or warrants to all holders of its outstanding Common Stock, without
any charge to such holders, entitling them (for a period expiring
within 60 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per
share which is lower at the record date mentioned below than the then
current market price per share of Common Stock (as determined in
accordance with paragraph (e) below), the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon exercise of each Warrant by a fraction, of which the
numerator shall be the number of shares of Common
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Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of additional shares of Common Stock offered for subscription
or purchase, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of shares which the aggregate offering price of the
total number of shares of common stock so offered would purchase at the current
market price per share of Common Stock at such record date. Such adjustment
shall be made whenever such rights, options or warrants are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph (a) above or in
the paragraph immediately following this paragraph) or rights, options or
warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding those referred to
in paragraph (b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon the
exercise of each Warrant by a fraction, of which the numerator shall be the
then current market price per share of Common Stock (as determined in
accordance with paragraph (e) below) on the date of such distribution, and of
which the denominator shall be the then current market price per share of
Common Stock, less the then fair value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so distributed or of
such subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
the determination of stockholders entitled to receive such distribution.
In the event of distribution by the Company to all holders of its shares
of Common Stock of stock of a subsidiary or securities convertible into or
exercisable for such stock, then in lieu of an adjustment in the number of
Warrant Shares purchasable upon the exercise of each Warrant, the Holder of
each Warrant, upon the exercise thereof at any time after such distribution,
shall be entitled to receive from the Company, such subsidiary or both, as the
Company shall determine, the stock or other securities to which such Holder
would have been entitled if such Holder had exercised such Warrant immediately
prior thereto regardless of whether the Warrants are exercisable at such time,
all subject to further adjustment as provided in this subsection 8.1; provided,
however, that no adjustment in respect of cash dividends or interest on such
stock or other securities shall be made during the term of a Warrant or upon
the exercise of a Warrant.
(d) In case the Company shall sell and issue shares of Common Stock
(other than pursuant to rights, options, warrants, or convertible securities
initially issued before the date of this Agreement) or rights, options,
warrants or convertible securities containing the
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right to subscribe for or purchase shares of Common Stock (excluding shares,
rights, options, warrants or convertible securities issued in any of the
transactions described in paragraphs (a), (b) or (c) above) at a price per
share of Common Stock (determined, in the case of such rights, options,
warrants or convertible securities, by dividing (w) the total of the amount
received or receivable by the Company (determined as provided below) in
consideration of the sale and issuance of such rights, options, warrants or
convertible securities, by (x) the total number of shares of Common Stock
covered by such rights, options, warrants or convertible securities) lower than
the then current market price per share of Common Stock (as determined in
accordance with paragraph (e) below) in effect immediately prior to such sale
and issuance, then the number of Warrant Shares thereafter purchasable upon the
exercise of the Warrants shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon exercise by a fraction, of which
the numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such shares, rights, options, warrants or convertible
securities plus the number of additional shares of Common Stock sold or subject
to issuance pursuant to such rights, options, warrants or convertible
securities, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such shares, rights,
options, warrants or convertible securities plus the number of shares of Common
Stock which the aggregate consideration received or receivable (determined as
provided below) for such sale or issuance would purchase at such current market
price per share. Such adjustment shall be made successively whenever such an
issuance is made. For the purposes of such adjustments, the consideration
received or receivable by the Company for rights, options, warrants or
convertible securities shall be deemed to be the consideration received by the
Company for such rights, options, warrants or convertible securities, plus the
consideration or premiums stated in such rights, options, warrants or
convertible securities to be paid for the shares of Common Stock covered
thereby. In case the Company shall sell and issue shares of Common Stock, or
rights, options, warrants or convertible 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 or receivable by the Company" for purposes of the first
sentence of this paragraph (d), the Board of Directors shall determine, in its
discretion, the fair value of said property, and such determination, if made in
good faith, shall be binding upon all Holders.
(e) For the purpose of any computation under paragraphs (b),
(c) and (d) of this Section, the current market price per share of Common Stock
at any date shall be the daily closing price of the Company's Common Stock, as
reported by the Nasdaq National Market. The closing price for such day shall be
the last such reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the closing bid and asked prices
regular way for such day, in each case on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if not listed or admitted to trading, the average of the closing bid and
asked prices of the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more such quotations,
the Board of Directors of the Company shall
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determine the current market price, in good faith, on the basis of such
quotations as it considers appropriate. Notwithstanding the foregoing, for the
purpose of any calculation under paragraph (d) above (A) with respect to any
issuance of options under the Company's employee or director compensation stock
option plans as in effect or as adopted by the Board of Directors of the
Company on the date hereof, the term "current market price" in such instances
shall mean the fair market price on the date of the issuance of any such option
determined in accordance with the Company's employee compensation stock option
plans as in effect or as adopted by the Board of Directors of the Company on
the date hereof; (B) with respect to any issuances of Common Stock (or rights,
options, warrants or convertible securities containing the right to subscribe
for or purchase shares of Common Stock) in connection with bona fide corporate
transactions (other than issuances in such transactions for cash or similar
consideration), the term "fair market price" shall mean the fair market price
per share as determined in arm's-length negotiations by the Company and such
other parties (other than affiliates or subsidiaries of the Company) to such
transactions as reflected in the definitive documentation with respect thereto,
unless such determination is not reasonably related to the closing market price
on the date of such determination; and (c) with respect to any issuance of the
Company's common stock for cash or similar consideration in a firm commitment
underwriting, the current fair market price shall be the price the shares are
sold at, regardless of whether such price is higher or lower than the quoted
price on the date of the sale and therefore no adjustment will be made.
(f) In any case in which this Section 8.1 shall require that any
adjustment in the number of Warrant Shares be made effective as of immediately
after a record date for a specified event, the Company may elect to defer until
the occurrence of the event the issuing to the Holder of any Warrant exercised
after that record date the shares of Common Stock and other securities of the
Company, if any, issuable upon the exercise of any Warrant over and above the
shares of Common Stock and other securities of the Company, if any, issuable
upon the exercise of any Warrant prior to such adjustment; provided, however,
that the Company shall deliver to the holder a due xxxx or other appropriate
instrument evidencing the holder's right to receive such additional shares or
securities upon the occurrence of the event requiring such adjustment.
(g) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Warrant Shares
purchasable upon the exercise of each Warrant; provided, however, that any
adjustments which by reason of this paragraph (g) 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 one-thousandth of a share.
(h) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant Price
payable upon the exercise of each Warrant shall be adjusted by multiplying such
Warrant Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise
of such Warrant immediately prior to such adjustment, and of
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which the denominator shall be the number of Warrant Shares purchasable
immediately thereafter.
(i) No adjustment in the number of Warrant Shares purchasable upon
the exercise of each Warrant need be made under paragraphs (b), (c) and (d) if
the Company issues or distributes to each Holder of Warrants the rights,
options, warrants, or convertible or exchangeable securities, or evidences of
indebtedness or assets referred to in those paragraphs which each Holder of
Warrants would have been entitled to receive had the Warrants been exercised
prior to the happening of such event or the record date with respect thereto
regardless of whether the Warrants are exercisable at the time of the happening
of such event or at the time of any record date with respect thereto. No
adjustment need be made for a change in the par value of the Warrant Shares.
(j) For the purpose of this Section 8.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the Common Stock
of the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value to no par value,
or from no par value to par value. In the event that at any time, as a result
of an adjustment made pursuant to paragraph (a) above, the Holders shall become
entitled to purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so purchasable upon
exercise of each Warrant and the Warrant Price of such securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares
contained in paragraphs (a) through (i), inclusive, above, and the provisions
of Section 4 and Sections 8.2 through 8.5, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other securities.
(k) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such expiration, be
readjusted and shall thereafter be such as it would have been had it been
originally adjusted (or had the original adjustment not been required, as the
case may be) as if (A) the only shares of Common Stock so issued were the
shares of Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion or exchange rights and (B) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the issuance, sale
or grant of all such rights, options, warrants or conversion or exchange rights
whether or not exercised; PROVIDED, HOWEVER, that no such readjustment shall
have the effect of increasing the Warrant Price or decreasing the number of
Warrant Shares by an amount in excess of the amount of the adjustment initially
made with respect to the issuance, sale or grant of such rights, options,
warrants or conversion or exchange rights.
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8.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at
its option, at any time during the term of the Warrants, reduce the then
current Warrant Price to any amount determined appropriate by the Board of
Directors of the Company.
8.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Warrant Price of
such Warrant Shares is adjusted, as herein provided, the Company shall promptly
mail by first class, postage prepaid, to each Holder notice of such adjustment
or adjustments and a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price of such
Warrant Shares after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate, absent manifest error, shall be
conclusive evidence of the correctness of such adjustment.
8.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 8.1,
no adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
8.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the
Company or such successor or purchasing corporation, as the case may be, shall
execute with each Holder an agreement that each Holder shall have the right
thereafter upon payment of the Warrant Price in effect immediately prior to
such action to purchase upon exercise of each Warrant the kind and amount of
shares and other securities and property which he would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale,
transfer or lease had such Warrant been exercised immediately prior to such
action regardless of whether the Warrants are exercisable at the time of such
action; provided, however, that no adjustment in respect of cash dividends,
interest or other income on or from such shares or other securities and
property shall be made during the term of a Warrant or upon the exercise of a
Warrant. Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 8. The provisions of this Section 8.5 shall similarly apply to
successive consolidations, mergers, sales, transfers or leases.
8.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in
the Warrant Price or the number or kind of shares purchasable upon the exercise
of the Warrants, Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
9. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than
one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full Warrant Shares which shall be issuable
upon the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share
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would, except for the provisions of this Section 9, be issuable on the exercise
of any Warrant (or specified portion thereof), the Company shall pay an amount
in cash equal to the closing price for one share of the Common Stock, as
determined in accordance with paragraph (e) of Section 8.1, on the trading day
immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
10. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Holder
represents and warrants to the Company that Holder will not dispose of any such
Warrants or Warrant Shares except pursuant to (i) an effective registration
statement, or (ii) an applicable exemption from registration under the
Securities Act of 1933 (the "Act"). In connection with any sale by Holder
pursuant to clause (ii) of the preceding sentence, Holder shall furnish to the
Company an opinion of counsel reasonably satisfactory to the Company to the
effect that such exemption from registration is available in connection with
such sale.
The Company hereby agrees to file a registration statement with
the Securities and Exchange Commission within 90 days of the issuance of the
Warrants to permit the holders of the Warrants to exercise the Warrants
pursuant to the terms hereof. The Company agrees to take all reasonable steps
to ensure that such registration statement will be promptly ordered effective
by the Securities and Exchange Commission. Further, the Company agrees to make
such filings pursuant to state securities laws to permit a holder to exercise
the Warrants within the time frame set forth in this paragraph.
11. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS.
Nothing contained in this Agreement or in any of the Warrants shall be
construed as conferring upon the Holders or their transferees the right to vote
or to receive dividends or to consent or to receive notice as stockholders in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company. If, however, at any time prior to the expiration of the Warrants and
prior to their exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in
any securities upon its shares of Common Stock or make any
distribution (other than a cash dividend) to the holders of its
shares of Common Stock; or
(b) the Company shall offer to the holders of its
shares of Common Stock any additional shares of Common Stock or
securities convertible into or exchangeable for shares of Common
Stock or any right to subscribe to or purchase any thereof; or
(c) a dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation, merger,
sale, transfer or lease of all or substantially all of its property,
assets, and business as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice
in writing of such event to the Holders as provided in Section 12 hereof and
(b) if there are more than 100 Holders, cause notice of such event to be
published once in The Wall Street Journal (national edition), such giving
of notice and publication to be completed at least 15 days prior to the date
fixed as a record date or
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the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights,
or for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the
publication or mailing thereof shall not affect the validity of any action
taken in connection with such dividend, distribution or subscription rights, or
such proposed dissolution, liquidation or winding up.
12. NOTICES. Any notice pursuant to this Agreement to be given
or made by the Holder of any Warrant or Warrant Shares to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed as follows:
Xxxxxx Oil and Gas Company
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Notices or demands authorized by this Agreement to be given or made to or on
the Holder of any Warrant or Warrant Shares shall be sufficiently given or made
(except as otherwise provided in this Agreement) if sent by registered mail,
return receipt requested, postage prepaid, addressed to such Holder at the
address of such Holder as shown on the Warrant Register or the Common Stock
Register, as the case may be.
13. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, without
giving effect to principles of conflict of laws.
14. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders
may from time to time supplement or amend this Agreement in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Holder may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interests of the Holders. Any amendment to this Agreement may be
effected with the consent of Holders of at least 66 2/3% of the Warrants (for
this purpose Warrant Shares shall be deemed to be Warrants in the proportion
that Warrant Shares are then issuable upon the exercise of Warrants); provided
that, any amendment which shall have the effect of materially adversely
affecting the interests of any Holder shall not be effective with respect to
such Holder if such Holder shall not have consented thereto.
15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holders shall bind and
inure to the benefit of their respective successors and assigns hereunder.
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16. MERGER OR CONSOLIDATION OF THE COMPANY. So long as
this Agreement remains in effect, the Company will not merge or consolidate
with or into, or sell, transfer or lease all or substantially all of its
property to, any other corporation unless the successor or purchasing
corporation, as the case may be (if not the Company), shall expressly assume,
by supplemental agreement executed and delivered to the Holders, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Company.
17. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and
the Holders, any legal or equitable right, remedy or claim under this
Agreement, but this Agreement shall be for the sole and exclusive benefit of
the Company and the Holders of the Warrants and Warrant Shares.
18. CAPTIONS. The captions of the sections and subsections of
this Agreement have been inserted for convenience and shall have no substantive
effect.
19. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the day, month and year first above written.
XXXXXX OIL AND GAS COMPANY
By:/s/ Xxxxxxx X. Xxxxxx
____________________________________
Xxxxxxx X. Xxxxxx,
Vice President-Corporate Development
and Administration
(CORPORATE SEAL)
Attest:
/s/ Xxxx X. Xxxxxxx
__________________________
Xxxx X. Xxxxxxx
