EXHIBIT 4.5
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as of
{Date}, between BETA OIL & GAS, INC., a Nevada corporation (the "Company") and
{NAME} ("Holder").
R E C I T A L S
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WHEREAS, the Company proposes to issue to Holder ____ warrants (the
"Warrants"), each such Warrant entitling the holder thereof to purchase one
share of Common Stock, $0.001 par value, of the Company (the "Shares" or the
"Common Stock"); and
WHEREAS, the Warrants which are the subject of this Agreement will be
issued by the Company to Holder as part of consideration payable to Holder in
connection with an investment by the Holder pursuant to the concurrent private
offering of the Company (the "Offering").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
A G R E E M E N T
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1. Warrant Certificates. The warrant certificates to be delivered
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pursuant to this Agreement (the "Warrant Certificates") shall be in the form set
forth in Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Warrant Agreement.
2. Right to Exercise Warrants. Each Warrant may be exercised from the
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date of this Agreement until 11:59 P.M. (Los Angeles time) on the date that is
five years after the date of this Agreement (the "Expiration Date"). Each
Warrant not exercised on or before the Expiration Date shall expire.
Each Warrant shall entitle its holder to purchase from the Company one
share of Common Stock at an exercise price of $7.50 per share, subject to
adjustment as set forth below ("Exercise Price").
The Company shall not be required to issue fractional shares of capital
stock upon the exercise of this Warrant or to deliver Warrant Certificates which
evidence fractional shares of capital stock. In the event that a fraction of an
Exercisable Share would, except for the provisions of this paragraph 2, be
issuable upon the exercise of this Warrant, the Company shall pay to the Holder
exercising the Warrant an amount in cash equal to such fraction multiplied by
the current market value of the Exercise Share. For purposes of this paragraph
2, the current market value shall be determined as follows:
(a) if the Exercise Shares are traded in the over-the-counter market
and not on any national securities exchange and not in the NASDAQ Reporting
System, the average of the mean between the last bid and asked prices per share,
as reported by the National Quotation Bureau, Inc., or an equivalent generally
accepted reporting service, for the last business day prior to the date on which
this Warrant is exercised, or, if not so reported, the average of the closing
bid and asked prices for an Exercise Share as furnished to the Company by any
member of the National Association of Securities Dealers, Inc., selected by the
Company for that purpose.
(b) if the Exercise Shares are listed or traded on a national
securities exchange or in the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded or
in the NASDAQ Reporting System, as the case may be, on the last business day
prior to the date of the exercise of this Warrant. The closing price referred
to in this Clause (b) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in
either case on the national securities exchange on which the Exercise Shares are
then listed on in the NASDAQ Reporting System; or
(c) if no such closing price or closing bid and asked prices are
available, as determined in any reasonable manner as may be prescribed by the
Board of Directors of the Company.
3. Mutilated or Missing Warrant Certificates. In case any of the Warrant
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Certificates shall be mutilated, lost, stolen or destroyed prior to its
expiration date, the Company shall issue and deliver, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and in substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest.
4. Reservation of Shares. The Company will at all times reserve and keep
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available, free from preemptive rights, out of the aggregate of its authorized
but unissued Shares or its authorized and issued Shares held in its treasury for
the purpose of enabling it to satisfy its obligation to issue Shares upon
exercise of Warrants, the full number of Shares deliverable upon the exercise of
all outstanding Warrants.
The Company covenants that all Shares which may be issued upon exercise of
Warrants will be validly issued, fully paid and nonassessable outstanding Shares
of the Company.
5. Rights of Holder. The Holder shall not, by virtue of anything
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contained in this Warrant Agreement or otherwise, prior to exercise of this
Warrant, be entitled to any right whatsoever, either in law or equity, of a
stockholder of the Company, including without limitation, the right to receive
dividends or to vote or to consent or to receive notice as a shareholder in
respect of the meetings of shareholders or the election of directors of the
Company of any other matter.
6. Callability. The Warrants are callable at the option of the Company,
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on and after the date that its Common Stock is traded on any exchange, including
the NASD Bulletin Board, at a Market Price, as defined below, equal to or
exceeding $10.00 per share for 10 consecutive trading days. The Market Price
shall be the closing bid price of the Common Stock, as reported by the National
Association of Securities Dealers Automated Quotation System, or the closing
price in the over-the-counter market, or in the event the Common Stock is listed
on a stock exchange, the fair market value per share shall be the closing price
on the exchange, as reported in the Wall Street Journal. The trading price
shall be the last quoted sales price, regular way, or, in case no such sale
takes place during such time, the average of the last quoted closing bid and low
asked prices, regular way, in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or
such other system.
7. Investment Intent. Holder represents and warrants to the Company that
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Holder is acquiring the Warrants for investment and with no present intention of
distributing or reselling any of the Warrants.
8. Certificates to Bear Language. The Warrants and the certificate or
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certificates therefor shall bear the following legend by which each holder shall
be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND
THE SHARES OF COMMON STOCK (OR OTHER SECURITIES)
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT IS AVAILABLE."
The Shares and the certificate or certificates evidencing any such
Shares shall bear the following legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE."
Certificates for Warrants without such legend shall be issued if such
warrants or shares are sold pursuant to an effective registration statement
under the Securities Act of 1933 (the "Act") or if the Company has received an
opinion from counsel reasonably satisfactory to counsel for the Company, that
such legend is no longer required under the Act.
9. Registration Rights. The Company is obligated to register the shares
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of Common Stock underlying the Unit Warrants in any subsequent registration
statement filed by the Company with the Securities and Exchange Commission, so
that holders of such Common Stock shall be entitled to sell the same
simultaneously with and upon the terms and conditions as the securities sold for
the account of the Company are being sold pursuant to any such registration
statement, subject to such lock-up provisions as may be proposed by the
underwriter of said registration statement and agreed to by the investors (the
"Piggyback Registration Right"). In such registration, the Company shall pay
all its expenses and filing fees and shall make a reasonable number of copies of
the registration statement and any prospectus available to holders. The Company
will not pay any selling commissions or similar expenses incurred by Seller or
of any counsel or other representative of a seller.
10. Adjustment of Number of Shares and Class of Capital Stock Purchasable.
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The Number of Shares and Class of Capital Stock purchasable under this Warrant
Agreement are subject to adjustment from time to time as set forth in this
Section.
(a) Adjustment for Change in Capital Stock. If the Company:
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(i) pays a dividend or makes a distribution on its Common
Stock, in each case, in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares;
(iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(v) issues by reclassification of its shares of Common Stock
any shares of its capital stock;
then the number and classes of shares purchasable upon exercise of each Warrant
in effect immediately prior to such action shall be adjusted so that the holder
of any Warrant thereafter exercised may receive the number and classes of shares
of capital stock of the Company which such holder would have owned immediately
following such action if such holder had exercised the Warrant immediately prior
to such action.
For a dividend or distribution the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment the holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company shall in good faith determine the allocation of the
adjusted Exercise Price between or among the classes of capital stock. After
such allocation, that portion of the Exercise Price applicable to each share of
each such class of capital stock shall thereafter be subject to adjustment on
terms comparable to those applicable to Common Stock in this Agreement.
Notwithstanding the allocation of the Exercise Price between or among shares of
capital stock as provided by this Section 11(a), a Warrant may only be exercised
in full by payment of the entire Exercise Price currently in effect.
(b) Consolidation, Merger or Sale of the Company. If the Company is a
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party to a consolidation, merger or transfer of assets which reclassifies or
changes its outstanding Common Stock, the successor corporation (or corporation
controlling the successor corporation or the Company, as the case may be) shall
by operation of law assume the Company's obligations under this Warrant
Agreement. Upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger or transfer if the holder had exercised the Warrant
immediately before the effective date of such transaction. As a condition to
the consummation of such transaction, the Company shall arrange for the person
or entity obligated to issue securities or deliver cash or other assets upon
exercise of the Warrant to, concurrently with the consummation of such
transaction, assume the Company's obligations hereunder by executing an
instrument so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in this
Section 11.
11. Successors. All the covenants and provisions of this Agreement by or
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for the benefit of the Company or Holder shall bind and inure to the benefit of
their respective successor and assigns hereunder.
12. Counterparts. This Agreement may be executed in any number of
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counterparts and each of such counterparts shall for all proposes be deemed to
be an original, and such counterparts shall together constitute by one and the
same instrument.
13. Notices. All notices or other communications under this Warrant
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shall be in writing and shall be deemed to have been given if delivered by hand
or mailed by certified mail, postage prepaid, return receipt requested,
addressed as follows: if to the Company: Beta Oil & Gas, Inc., 000 Xxxx Xxxxxx,
Xxxxx Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx, 00000, Attention: Chief Executive
Officer, and to the Holder: at the address of the Holder appearing on the books
of the Company or the Company's transfer agent, if any.
Either the Company or the Holder may from time to time change the address
to which notices to it are to be mailed hereunder by notice in accordance with
the provisions of this Paragraph 13.
14. Supplements and Amendments. The Company may from time to time
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supplement or amend this Warrant Agreement without the approval of any Holders
of Warrants in order to cure any ambiguity or to be correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision, or to make any other provisions in regard to matters or questions
herein arising hereunder which the Company may deem necessary or desirable and
which shall not materially adversely affect the interest of the Holder.
15. Severability. If for any reason any provision, paragraph or term of
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this Warrant Agreement is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.
16. Governing Law and Venue. This Warrant shall be deemed to be a
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contract made under the laws of the State of California and for all purposes
shall be governed and construed in accordance with the laws of said State. Any
proceeding arising under this Warrant Agreement shall be instituted in Orange
County, State of California.
17. Headings. Paragraphs and subparagraph headings, used herein are
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included herein for convenience of reference only and shall not affect the
construction of this Warrant Agreement nor constitute a part of this Warrant
Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.
"COMPANY" "HOLDER"
BETA OIL & GAS, INC.
________________________ _______________________________
BY: Xxxxx Xxxxx By: ___________________________
ITS: President Its: __________________________
EXHIBIT A
NUMBER __ WARRANT
Warrant to Purchase
Shares
BETA OIL & GAS, INC. see reverse for
COMMON STOCK PURCHASE WARRANT certain definitions
will be void if not exercised prior to 11:59 P.M. Pacific Time on __________, 2000
This Certifies that for value received, the registered holder or assigns
("Holder"),
is entitled to purchase from Beta Oil & Gas, Inc., a Nevada corporation (the
"Company") at any time after 9:00 A.M. Eastern Time on __________, 1998 at the
purchase price per share of $7.50 (the "Warrant Price"), the number of shares of
Common Stock of the Company set forth above (the "Shares"). The number of shares
purchasable upon exercise of each warrant evidenced hereby and the Warrant Price
per Share shall be subject to adjustment from time to time as set forth in the
Warrant Agreement referred to below. The Warrants expire on __________, 2002.
Holders will not have any rights or privileges of shareholders of the Company
prior to exercise of the Warrants. Holders of the Warrants evidenced hereby and
the shares of Common Stock issuable upon exercise hereof have certain rights
with respect to registration with the Securities and Exchange Commission of the
Warrants and Common Stock issuable upon exercise hereof. These registration
rights are set forth in that certain Private Placement Memorandum dated as of
August 1, 1997 pursuant to which this Warrant Certificate has been issued.
Subject to the provisions of the Warrant Agreement, referenced to below, the
Warrant evidenced hereby may be called at the option of the Company, on and
after the date that its Common Stock is traded on any exchange, including the
NASD Bulletin Board, at a Market Price, as defined below, equal to or exceeding
$7.00 per share for 10 consecutive trading days. The Market Price shall be the
closing bid price of the Common Stock, as reported by the National Association
of Securities Dealers Automated Quotation System, or the closing price in the
over-the-counter market, or in the event the Common Stock is listed on a stock
exchange, the fair market value per share shall be the closing price on the
exchange, as reported in the Wall Street Journal. The Warrant evidenced hereby
may be exercised in whole or in part by presentation of this Warrant certificate
with the Purchase Form on the reverse side hereof fully executed (with a
signature guarantee as provided on the reverse side hereof) and simultaneous
payment of the Warrant Price (subject to adjustment) at the principal office of
the Company. Payment of such price shall be made at the option of the holder in
cash or by certified check or bank draft. The Warrants evidenced hereby are part
of a duly authorized issue of Common Stock Purchase Warrants with rights to
purchase an aggregate of up to 1,500,000 shares of Common Stock of the Company.
Upon any partial exercise of the Warrant evidenced hereby, there shall be
countersigned and issued to the Holder a new Warrant Certificate in respect of
the Shares as to which the Warrants evidenced hereby shall not have been
exercised. This Warrant Certificate may be exchanged at the office of the
Company by surrender of this Warrant Certificate properly endorsed with a
signature guarantee either separately or in combination with one or more other
Warrants for one or more new Warrants to purchase the same aggregate number of
Shares as evidenced by the Warrant or Warrants exchanged. No fractional Shares
will be issued upon the exercise of rights to purchase hereunder, but the
Company shall pay the cash value of any fraction upon the exercise of one or
more Warrants. The Holder hereof may be treated by the Company and all other
persons dealing with this Warrant Certificate as the absolute owner hereof for
all purposes and as the person entitled to exercise the rights represented
hereby, any notice to the contrary notwithstanding, and until such transfer is
on such books, the Company may treat the Holder as the owner for all purposes.
Dated: __________, 1998 BETA OIL & GAS, INC.
Secretary Chief Executive Officer
SEE LEGEND ON REVERSE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
ELECTION TO PURCHASE
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase _______________________ shares of Common Stock of Beta Oil &
Gas, Inc. and hereby makes payment of $_________ (at the rate of $________ per
share) in payment of the Exercise Price pursuant hereto. Please issue the
shares as to which this Warrant is exercised in accordance with the instructions
given below.
The undersigned represents and warrants that the exercise of the within
Warrant was solicited by the member firm of the National Association of
Securities Dealers, Inc. ("NASD") listed below. If not solicited by an NASD
member, please write "unsolicited" in the space below.
______________________________________________________
(Insert Name of NASD Member or "Unsolicited")
Dated: ________________, 19______
Signature: _____________________________________________
INSTRUCTIONS FOR REGISTRATION OF SHARES
Name (print) __________________________________________________________________
Address (print) ________________________________________________________________
ASSIGNMENT
FOR VALUE RECEIVED, ____________________________________ does hereby sell,
assign and transfer unto ___________________________________________________,
the right to purchase ________________shares of Common Stock of Beta Oil & Gas,
Inc., evidenced by the within Warrant, and does hereby irrevocably constitute
and appoint __________________________________________ attorney to transfer such
right on the books of Beta Oil & Gas, Inc., with full power of substitution on
the premises.
Dated: ________________, 19______
Signature: _____________________________________________
Notice: The signature of Election to Purchase or Assignment must correspond
with the name as written upon the face of the within Warrant in every particular
without alteration or enlargement or any change whatsoever. The signature(s)
must by guaranteed by an eligible guarantor institution (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions with membership in an approved
signature guarantee Medallion Program), pursuant to S.E.C. Rule 17Ad-15.
_________________________________________
Signature Guarantee
