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EXHIBIT 99.1
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SECURITIES
MAY BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
EXEMPTIONS THEREFROM. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR
OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND
NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE
VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED
WITH.
WARRANT NO. 99A-1
Warrant to Purchase 2,002,128 Shares
(subject to adjustment) of Common Stock of
Harken Energy Corporation
Void after 5:00 p.m.
Houston, Texas
August 19, 2001
HARKEN ENERGY CORPORATION
STOCK PURCHASE WARRANT
THIS IS TO CERTIFY THAT, for value received, XP HOLDINGS, LLC, whose
address is % The Beacon Group, Atten: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, or its assigns (the "Holder"), upon due exercise of this
Warrant, is entitled to purchase from Harken Energy Corporation, a Delaware
corporation (the "Company"), at any time and through and including 5:00 p.m.,
Houston, Texas local time, on February 19, 2001 (the "Expiration Date")
2,002,128 shares (the "Shares") of fully paid and non-assessable common stock,
par value $.01 per share (the "Common Stock"), of the Company, at an exercise
price of $2.50 per share (the "Exercise Price") or in a cashless exchange for a
reduced number of shares (the "Net Issuable Exchange") as provided below;
provided that if no twenty (20) consecutive trading day period exists prior to
the Expiration Date where the average closing price of the Common Stock during
such period is greater than the Exercise Price then in effect, then the
Expiration Date will be extended to February 19, 2002. Both the Exercise Price
and number of Shares are subject to possible adjustment as provided below.
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This Warrant is subject to the following terms, provisions and
conditions:
1. Exercise of Warrant.
(a) Subject to subsection 1(b) below, the Holder may exercise this
Warrant in whole at any time through the Expiration Date or in part from time to
time through the Expiration Date, but only in such multiples as are required to
permit the issuance by the Company of one or more full shares of Common Stock,
by surrender of this Warrant with the Form of Subscription attached hereto duly
executed, to the Company no later than 5:00 P.M., Houston, Texas local time on
the Expiration Date, together with the payment of the Exercise Price for each of
the Shares for which the Warrant is exercised. Payment for the Shares to be
purchased upon exercise of this Warrant may be made by wire transfer of Fed
Funds or by the delivery of a certified or cashier's check payable to the
Company for the aggregate Exercise Price of the Shares purchased; provided,
however, that at the Holder's option, payment of the Exercise Price may be made
by a Net Issuable Exchange pursuant to Section 11. In case of the exercise of
this Warrant in part prior to the Expiration Date, the Company will deliver to
the Holder a new Warrant of like tenor in the name of the Holder evidencing the
right to purchase the number of shares as to which this Warrant has not been
exercised.
(b) The Warrant may not be exercised by the Holder unless, at the time
of exercise, (i) there is either (A) a registration statement or prospectus
covering the Common Stock, that is effective under (1) the Act, and (2) the
securities laws of the state of the address of record of such Holder, or (B) an
exemption available from registration for the Warrant exercise and issuance of
Common Stock in the opinion of counsel reasonably satisfactory to the Company
provided by the Holder to the Company, and (ii) such exercise and issuance would
otherwise be in compliance with applicable law in the opinion of such counsel
provided to the Company. The Warrant may not be, directly or indirectly,
transferred to, or exercised by, any person in any state where such transfer or
exercise would violate any law, including securities laws, of such state.
Legends as required by applicable federal and state laws may be placed on the
certificates representing the Shares. The Holder and the Company agree to
execute such documents and instruments as counsel for the Company reasonably
deems necessary to effect compliance of the issuance of this Warrant and any
Shares issued upon exercise hereof with applicable federal and state securities
laws.
(c) The exercise of the Warrant will be deemed to have been effected at
5:00 P.M., Houston, Texas local time on the day the Holder complies with the
terms of subsection 1(a) above.
2. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:
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(a) Shares to be Fully Paid. All Shares will, upon issuance, be legally
and validly issued, fully paid, and non-assessable and free from preemptive
rights, all taxes, liens, and charges with respect to the issue thereof.
(b) Reservation of Shares. During the period within which this Warrant
may be exercised, the Company will at all times have authorized, and reserved
for the purpose of issue upon exercise of this Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant.
(c) Certain Actions Prohibited. The Company will not, by amendment of
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, (i) the Company
will not increase the par value of the shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, (ii)
before taking any action which would cause an adjustment reducing the Exercise
Price below the then par value of the shares of Common Stock so receivable, the
Company will take all such corporate action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Exercise Price upon the
exercise of this Warrant.
(d) Listing. If the issuance of any Shares required to be reserved for
purposes of exercise of this Warrant requires listing on any national securities
exchange, before such Shares may be issued upon exercise of this Warrant, the
Company will, at its expense, use its commercially reasonable efforts to cause
such Shares to be duly approved, or listed on the relevant national securities
exchange, as the case may be, at such time, so that such Shares may be issued in
accordance with the terms hereof.
(e) Available Information. The Company will comply with the reporting
requirements of Sections 13 and 15(d) of the Securities Act of 1934, as amended.
The Company covenants that if it is not required to file such reports, it will,
upon the request of the Holder, make publicly available such information, and it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable the Holder to sell the shares
underlying the Warrants without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission. Upon the
request of Holder, the Company will deliver to Holder a written statement that
it has complied with such requirements.
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(f) The Company shall pay all expenses, transfer taxes and other
charges payable in connection with the preparation, issue and delivery of stock
certificates issued pursuant to this Warrant, except that, in case such stock
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all stock transfer taxes which shall be payable
upon the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of delivering the notice of exercise mentioned above.
3. Stock Dividends Reclassifications, Reorganization, Anti-Dilution
Provisions, Etc.
This Warrant is subject to the following further provisions:
(a) Stock Dividends and Stock Splits. In case, after the Closing Date
and prior to the expiration of this Warrant by exercise or by its terms, the
Company issues any shares of its Common Stock as a stock dividend or
distribution or divides the number of shares of Common Stock, then, in either of
such cases, the Exercise Price per share of the Shares purchasable pursuant to
this Warrant in effect at the time of such action will be proportionately
reduced and the number of the Shares at that time purchasable pursuant to this
Warrant shall be proportionately increased; and conversely, in the event the
Company shall combine such shares of its Common Stock into a smaller number of
shares, then, and in such event, the Exercise Price per share of the Shares
purchasable pursuant to this Warrant in effect at the time of such action shall
be proportionately increased and the number of Shares at that time purchasable
pursuant to this Warrant shall be proportionately decreased.
(b) Certain Corporate Events. In case, after the Closing Date and prior
to the expiration of this Warrant by exercise or by its terms, (i) the Company
is recapitalized by reclassifying its outstanding Common Stock into stock with a
different par value or by changing its outstanding Common Stock with par value
to stock without par value, (ii) the Company or a successor entity consolidates
or merges with or conveys all or substantially all of its or of any successor
entity's property and assets to one or more, or any combination of,
corporations, partnerships, limited liability companies, joint ventures or other
entities (any such entity being included within the meaning of the term
"successor entity" in the event of any consolidation or merger of any such
entity with, or the sale of all or substantially all of the property of any such
entity to, another entity or entities), or (iii) the Company or a successor
entity dissolves, liquidates, or winds up its affairs, the Holder of this
Warrant will thereafter receive, upon the terms and conditions and during the
time specified in this Warrant, in lieu of the Shares theretofore purchasable
upon the exercise of this Warrant, the kind and amount of shares of stock, other
securities and or assets receivable upon such recapitalization or consolidation,
merger, conveyance, dissolution, liquidation, or winding up by the Holder of the
number of shares of Common Stock which the Holder of this Warrant might have
purchased, immediately prior to such recapitalization or consolidation, merger,
conveyance, dissolution, liquidation, or winding up after deduction or payment
of the appropriate Exercise Price.
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(c) Issuance of Additional Shares of Common Stock. If the Company
issues or sells any Common Stock without consideration or for consideration per
share less than the Market Price (as defined below) of the Common Stock on the
last trading day immediately preceding such issuance, then the Exercise Price in
effect immediately prior to each such issuance or sale will immediately (except
as provided below) be adjusted to that price determined by multiplying the per
share Exercise Price in effect immediately prior to such issuance or sale, by a
fraction, (1) the numerator of which shall be (x) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale plus (y) the number
of shares of Common Stock which the aggregate consideration received by the
Company for the total number of such additional shares of Common Stock so issued
or sold would purchase at the then effective per share Market Price, on the last
trading day immediately preceding such issuance or sale and (2) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such issue or sale. In such event, the number of shares of Common Stock
issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (i) the product of (a) the number of shares issuable upon
the exercise of this Warrant before such adjustment, and (b) the Exercise Price
in effect immediately prior to the issuance giving rise to this adjustment by
(ii) the new Exercise Price determined in accordance with the immediately
preceding sentence.
(d) Issuance of Warrants or Other Rights, Convertible Securities. If
the Company issues any options, warrants or other rights to purchase or acquire
Common Stock (whether or not at the time exercisable) or (b) securities by their
terms convertible into or exchangeable for Common Stock (whether or not at the
time so convertible or exchangeable) or options, warrants or rights to purchase
such convertible or exchangeable securities (whether or not at the time
exercisable) and the exercise or conversion price of such options, warrants,
other rights or convertible or exchangeable securities is below the Market
Price, then the per share Warrant Price shall be adjusted in the manner provided
in Section 3(c) on the basis that:
(1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued upon the earlier of (A) the date on which the
Company shall enter into a firm contract or commitment for the
issuance of such options, warrants or other rights and (B) the
actual time such options, warrants or rights are issued, and
for a consideration equal to the consideration, if any,
received by the Company upon the issuance of such options,
warrants or rights plus the minimum purchase price provided in
such options, warrants or rights for the Common Stock covered
thereby; and
(2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise
of options, warrants or other rights to purchase or acquire
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such convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued upon the earlier of (A) the date on which the Company
shall enter into a firm contract or commitment for the
issuance of such convertible or exchangeable securities, or
upon the options, warrants or rights to purchase such
convertible or exchangeable securities and (B) the actual time
such securities were issued or such options, warrants or
rights were issued, and for a consideration equal to the
consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding
any cash received on account of accrued interest or accrued
dividends), plus the additional consideration, if any, to be
received by the Company upon the conversion or exchange of
such securities, or upon the exercise of any related options,
warrants or rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or
exchange thereof;
provided, however that no further adjustment of the Exercise Price and the
number of Shares issuable upon exercise of this Warrant will be made for the
actual issuance of Common Stock upon the exercise of an option, warrant or other
right to acquire Common Stock pursuant to its terms or upon the conversion or
exchange of a convertible or exchangeable security pursuant to its terms for
which prior adjustment has been made; except that in the case of any subsequent
change in the number of shares of Common Stock deliverable upon exercise of any
such options, warrants or rights or conversion or exchange of such convertible
or exchangeable securities or any change in the consideration to be received by
the Company upon such exercise, conversion or exchange (but excluding changes
resulting from the anti-dilution provisions thereof to the extent comparable to
the anti-dilution provisions contained herein) the Exercise Price and the number
of Shares issuable upon exercise of this Warrant as then in effect shall be
readjusted to such Exercise Price and number of Shares as would have been
obtained had an adjustment been made upon the issuance of such options, warrants
or rights not exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to such change, upon
the basis of such change.
(e) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common Stock
(i) of shares of any class other than its Common Stock or (ii) of evidence of
indebtedness of the Company or any subsidiary or (iii) of assets (excluding
ordinary cash dividends; and dividends or distributions referred to in Section
3(a)), or (iv) of rights or warrants (excluding those referred to in Section
3(d)), in each such case the Exercise Price in effect immediately prior thereto
shall be reduced immediately thereafter to the price determined by dividing (x)
an amount equal to the difference resulting from (1) the number of shares of
Common Stock outstanding on such record date multiplied by the Exercise Price
per share on such record date, less (2) the fair market value (as reasonably
determined by the Company's board of directors) of such shares or evidences of
indebtedness or assets or rights or warrants to be so distributed, by (y) the
number of shares of Common Stock
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outstanding on such record date; such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of shares of
Common Stock issuable upon the exercise of this Warrant shall be increased to
the number obtained by dividing (i) the product of (a) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (b) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (ii) the new Exercise Price determined in accordance with the
immediately preceding sentence.
(f) Certain Repurchases of Common Stock. In case the Company effects a
pro rata repurchase of Common Stock, then the Exercise Price shall be reduced to
the price determined by multiplying the Exercise Price in effect immediately
prior to the effective date of such pro rata repurchase by a fraction of which
the numerator shall be (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such pro rata repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the
first public announcement by the Company or any of its affiliates of the intent
to effect such pro rata repurchase, minus (ii) the aggregate purchase price of
the pro rata repurchase, and of which the denominator shall be the product of
(i) the number of shares of Common Stock outstanding immediately prior to such
pro rata repurchase minus the number of shares of Common Stock so repurchased
and (ii) the Market Price per share of Common stock on the trading day
immediately preceding the first public announcement of such pro rata repurchase.
In such event, the number of shares of Common Stock issuable upon the exercise
of its Warrant shall be increased to the number obtained by dividing (i) the
product of (a) the number of Shares issuable upon the exercise of this Warrant
before such adjustment, and (b) the Exercise Price in effect immediately prior
to the pro rata repurchase giving rise to this adjustment by (ii) the new
Exercise Price determined in accordance with the immediately preceding sentence.
(g) Notwithstanding anything to the contrary herein, this Section 3
shall not apply to (i) any securities exercisable, convertible or exchangeable
for Common Stock or any agreements to issue any of the foregoing that are
currently outstanding prior to the date hereof, (ii) any issuance of Common
Stock upon the exercise, conversion or exchange of any securities if the
issuance of such security did not trigger an adjustment pursuant to this Section
3, or (iii) any issuance of Common Stock or any other securities exercisable,
convertible or exchangeable therefor, if issued for consideration in whole or in
part other than cash, where such consideration is deemed in good faith by the
Board of Directors of Harken to be equal to the fair market value of the
securities issued therefor.
(h) For purposes of this Warrant, the "Market Price" of a share of the
Common Stock as of a particular date shall mean, if the Common Stock is traded
on a securities exchange or on the Nasdaq National Market or Nasdaq SmallCap
Market, the closing price of the Common Stock on such exchange or on the Nasdaq
National Market or Nasdaq SmallCap Market for the date in question. If at any
time the Common Stock is not traded on an exchange or on the Nasdaq National
Market or Nasdaq SmallCap Market or otherwise traded in the over-the-counter
market, the Market Price shall be deemed to be the higher of (i) the book value
thereof as
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determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of a date that is within 20
days of the date as of which the determination is to be made, or (ii) the fair
market values thereof determined in good faith by any firm of independent public
accountants or a nationally recognized independent investment banking firm
selected by the Board of Directors of the Company.
(i) Computation of Adjustments. Upon the occurrence of each event
requiring an adjustment of the Exercise Price and/or of the number of Shares
purchasable pursuant to this Warrant in accordance with, and as required by, the
terms of this Section 3, the Company shall compute, or if requested by the
Holder shall forthwith employ a firm of certified public accountants (who may be
the regular accountants for the Company) who shall compute, the adjusted
Exercise Price and the adjusted number of Shares purchasable at such adjusted
Exercise Price by reason of such event in accordance with the provisions of this
Section 3 and shall prepare a certificate setting forth such adjusted Exercise
Price and the adjusted number of Shares and showing in detail the facts upon
which such conclusions are based, including a statement of the consideration
received or to be received by the Company for any additional shares of Common
Stock issued or sold or deemed to have been issued or sold and of the number of
shares of Common Stock outstanding or deemed to be outstanding. All such
calculations shall be to the nearest ten-thousandths and any adjusted Exercise
Price shall be rounded to the nearest cent and any adjusted number of shares
shall be rounded to the nearest whole share. The Company shall mail forthwith to
the Holder of this Warrant a copy of such certificate, and thereafter said
certificate shall be conclusive and shall be binding upon such Holder unless
contested by such Holder by written notice to the Company within 10 days after
receipt of the certificate by such Holder.
(j) In case:
(i) of any classification, reclassification, or other
reorganization of the capital stock of the Company,
consolidation, or merger of the Company with or into another
entity where the Company is not the surviving entity, or
conveyance of all or substantially all of the assets of the
Company;
(ii) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(iii) of a proposal by the Company to take any action of the type
described in this Section 3 (but only if the action of the
type described in this Section 3 would result in an adjustment
in the Exercise Price or the number of Shares into which this
Warrant is exercisable or a change in the type of securities
or property to be delivered upon exercise of this Warrant),
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the Company shall give notice to the Holder, in the manner which notice shall
specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of this Warrant. In the case of any action which would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of any such
action then, and in any such case, the Company shall mail to the Holder of this
Warrant a brief statement of the event giving rise to such effect and a
description thereof.
4. Non-transferability. Except to an Accredited Investor or Qualified
Institutional Buyer, as defined in the Securities Act, and in compliance with
all applicable federal and state securities laws, this Warrant and any shares
issued upon exercise thereof may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent and distribution. Any attempted assignment, transfer, pledge,
hypothecation, or other encumbrance of this Warrant and any shares issued upon
exercise thereof contrary to the provisions hereof, and any execution,
attachment, or similar process upon this Warrant, will be null, void, and of no
effect.
5. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights whatsoever as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the Holder hereof to purchase the Shares, and no mere
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
6. Loss, Theft, Destruction, or Mutilation. Upon receipt by the Company
of evidence satisfactory to it (in the exercise of its reasonable discretion and
provided that an affidavit of the Holder shall be deemed to be satisfactory
evidence) of the ownership of and the loss, theft, destruction, or mutilation of
this Warrant and (in the case of loss, theft, or destruction) of an indemnity
from the Holder satisfactory to the Company (in the exercise of its reasonable
discretion), and (in the case of mutilation) upon surrender and cancellation
thereof, the Company, at the Company's expense, will execute and deliver to the
Holder, in lieu thereof, a new Warrant of like tenor.
7. Register. The Company shall maintain, at its principal office
located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (or such other
office or agency of the Company as it may designate by notice to the Holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant
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has been issued, as well as the name and address of each transferee as may be
permitted under the terms of this Warrant and each prior owner of this Warrant.
8. Exercise or Transfer Without Registration. Anything in this Warrant
to the contrary notwithstanding if, at the time of the surrender of this Warrant
in connection with any exercise, transfer, or exchange of this Warrant, this
Warrant shall not be registered under the Act and under applicable state
securities laws, the Company may require, as a condition of allowing such
exercise, or exchange, that (i) the Holder of this Warrant, furnish to the
Company a written opinion of counsel, which opinion and counsel are acceptable
to the Company, to the effect that such exercise, or exchange may be made
without registration under said Act and under applicable state securities laws
and (ii) the Holder execute and deliver to the Company an investment letter in
form and substance acceptable to the Company. The Holder of this Warrant, by
taking and holding the same, hereby represents to the Company that such Holder
is an "accredited investor" as defined under the Act and is acquiring this
Warrant for investment and not with a view to the distribution thereof.
9. Notices. All notices requests and other communications required or
permitted to be given or delivered hereunder to the Holder of this Warrant or to
the Holder of shares acquired upon exercise of this Warrant shall be in writing,
and shall be personally delivered or shall be sent by first class mail,
certified or registered mail, postage prepaid and addressed, to such Holder at
the address shown for such Holder on the books of the Company, or at such other
address as shall have been furnished to the Company by notice from such Holder.
All notices, requests and other communications required or permitted to be given
or delivered hereunder to the Company shall be in writing, and shall be
personally delivered (including courier or express service), or shall be sent by
first class mail, certified or registered mail, postage prepaid and addressed,
to the office of the Company at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Secretary, or at such other address as shall have
been furnished to the Holder of this Warrant or to the Holder of shares acquired
upon exercise of this Warrant by notice from the Company. Any such notice,
request, or other communication may be sent by telegram, facsimile or telex, but
shall in such case be subsequently confirmed by a writing personally delivered
or sent by first class mail or by certified or registered mail as provided
above. All notices, requests, and other communications shall be deemed to have
been given either at the time of the delivery thereof to (or the receipt by, in
the case of a telegram, facsimile or telex) the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed, at the completion of the third full business day following the time of
such mailing thereof to such address, as the case may be.
10. Governing Law. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
11. Net Issuable Exchange.
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(a) In addition to and without limiting the rights of the Holder under
the terms of this Warrant, the Holder shall have the right (the "Conversion
Right") to convert this Warrant or any portion thereof into shares of Common
Stock as provided in this Section 11 at any time or from time to time prior to
the Expiration Date. Upon exercise of the Conversion Right with respect to a
particular number of shares subject to this Warrant (the "Converted Warrant
Shares"), the Company shall deliver to the Holder, without payment by the Holder
of any exercise price or any cash or consideration other than the surrender of
the right to exercise this Warrant as to the Converted Warrant Shares, a number
of shares of Common Stock determined by multiplying the number of Converted
Warrant Shares by the following:
FMV - Exercise Price
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FMV
FMV shall be determined using the Market Price as of the Conversion
Date and Exercise Price shall be determined as of the close of business on the
Conversion Date (as defined below).
(b) The Conversion Right may be exercised by the Holder by surrendering
this Warrant Certificate at the principal office of the Company together with a
written statement specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in subsection (a) above as the
Converted Warrant Shares) in exercise of the Conversion Right. Such conversion
shall be effective upon receipt by the Company of this Warrant Certificate
together with the aforesaid written statement or on such later date as is
specified therein (the "Conversion Date"), but not later than the Expiration
Date. Certificates for the shares of Common Stock issuable upon exercise of the
Conversion Right and, in the case of a partial exercise, a new warrant
certificate evidencing the shares remaining subject to this Warrant shall be
issued as of the Conversion Date and shall be delivered to the Holder within 15
days following the Conversion Date.
12. Optional Redemption. Notwithstanding anything to the contrary
herein, within five (5) business days after the exercise of this Warrant by the
holder in accordance with Section 1 above, the Company shall have the right to
deliver to the holder in full satisfaction of all of its obligations pursuant to
the Warrant, cash, in an amount equal to the product of the Market Price on the
day of exercise and number of the Shares which would otherwise be delivered
pursuant to such exercise.
13. Miscellaneous.
(a) Amendments. This Warrant or any provision hereof may not be
changed, waived, or discharged, or terminated orally, but only by an instrument
in writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
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(b) Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) Successors and Assigns. This Warrant shall be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.
(d) Limitation of Liability. In no event shall any direct or indirect
member, stockholder, officer, director, partner or other representative of
Holder or any of its affiliates be personally liable for any obligation of
Holder under this Agreement. In no event shall recourse with respect to the
obligations under this Agreement of Holder be had to the assets or business of
any person other than Holder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on this 19th day of August, 1999.
HARKEN ENERGY CORPORATION
By:
-----------------------------------
[Seal] Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
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FORM OF SUBSCRIPTION
Dated: , .
--------- ---
To:
--------------------------------------
The undersigned, pursuant to the provisions set forth in the within
Warrant Number ________ hereby agrees to purchase ______ shares of Common Stock
covered by such Warrant, and makes payment herewith in full therefor at the
price per share provided by such Warrant in cash or by certified or official
bank check in the amount of $_______________. Please issue a certificate of
certificates for such shares of Common Stock in the following name:
Name:
--------------------------------------------
Address:
-----------------------------------------
-----------------------------------------
Signature:
---------------------------------------
Title of Signing Officer of Agent (if any):
Note: The above signature should correspond exactly with the name on
the face of the within Warrant or with the name of the assignee
appearing in the assignment form.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said Holder covering the balance of the shares purchasable thereunder.
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THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SECURITIES
MAY BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
EXEMPTIONS THEREFROM. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR
OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND
NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE
VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED
WITH.
WARRANT NO. 99A-2
Warrant to Purchase 333,938 Shares
(subject to adjustment) of Common Stock of
Harken Energy Corporation
Void after 5:00 p.m.
Houston, Texas
August 19, 2001
HARKEN ENERGY CORPORATION
STOCK PURCHASE WARRANT
THIS IS TO CERTIFY THAT, for value received, XPLOR SHI, LLC, whose
address is % Trust Company of the West, Atten: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or its assigns (the "Holder"), upon due
exercise of this Warrant, is entitled to purchase from Harken Energy
Corporation, a Delaware corporation (the "Company"), at any time and through and
including 5:00 p.m., Houston, Texas local time, on February 19, 2001 (the
"Expiration Date") 333,938 shares (the "Shares") of fully paid and
non-assessable common stock, par value $.01 per share (the "Common Stock"), of
the Company, at an exercise price of $2.50 per share (the "Exercise Price") or
in a cashless exchange for a reduced number of shares (the "Net Issuable
Exchange") as provided below; provided that if no twenty (20) consecutive
trading day period exists prior to the Expiration Date where the average closing
price of the Common Stock during such period is greater than the Exercise Price
then in effect, then the Expiration Date will be extended to February 19, 2002.
Both the Exercise Price and number of Shares are subject to possible adjustment
as provided below.
16
This Warrant is subject to the following terms, provisions and
conditions:
1. Exercise of Warrant.
(a) Subject to subsection 1(b) below, the Holder may exercise this
Warrant in whole at any time through the Expiration Date or in part from time to
time through the Expiration Date, but only in such multiples as are required to
permit the issuance by the Company of one or more full shares of Common Stock,
by surrender of this Warrant with the Form of Subscription attached hereto duly
executed, to the Company no later than 5:00 P.M., Houston, Texas local time on
the Expiration Date, together with the payment of the Exercise Price for each of
the Shares for which the Warrant is exercised. Payment for the Shares to be
purchased upon exercise of this Warrant may be made by wire transfer of Fed
Funds or by the delivery of a certified or cashier's check payable to the
Company for the aggregate Exercise Price of the Shares purchased; provided,
however, that at the Holder's option, payment of the Exercise Price may be made
by a Net Issuable Exchange pursuant to Section 11. In case of the exercise of
this Warrant in part prior to the Expiration Date, the Company will deliver to
the Holder a new Warrant of like tenor in the name of the Holder evidencing the
right to purchase the number of shares as to which this Warrant has not been
exercised.
(b) The Warrant may not be exercised by the Holder unless, at the time
of exercise, (i) there is either (A) a registration statement or prospectus
covering the Common Stock, that is effective under (1) the Act, and (2) the
securities laws of the state of the address of record of such Holder, or (B) an
exemption available from registration for the Warrant exercise and issuance of
Common Stock in the opinion of counsel reasonably satisfactory to the Company
provided by the Holder to the Company, and (ii) such exercise and issuance would
otherwise be in compliance with applicable law in the opinion of such counsel
provided to the Company. The Warrant may not be, directly or indirectly,
transferred to, or exercised by, any person in any state where such transfer or
exercise would violate any law, including securities laws, of such state.
Legends as required by applicable federal and state laws may be placed on the
certificates representing the Shares. The Holder and the Company agree to
execute such documents and instruments as counsel for the Company reasonably
deems necessary to effect compliance of the issuance of this Warrant and any
Shares issued upon exercise hereof with applicable federal and state securities
laws.
(c) The exercise of the Warrant will be deemed to have been effected at
5:00 P.M., Houston, Texas local time on the day the Holder complies with the
terms of subsection 1(a) above.
2. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:
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(a) Shares to be Fully Paid. All Shares will, upon issuance, be legally
and validly issued, fully paid, and non-assessable and free from preemptive
rights, all taxes, liens, and charges with respect to the issue thereof.
(b) Reservation of Shares. During the period within which this Warrant
may be exercised, the Company will at all times have authorized, and reserved
for the purpose of issue upon exercise of this Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant.
(c) Certain Actions Prohibited. The Company will not, by amendment of
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, (i) the Company
will not increase the par value of the shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, (ii)
before taking any action which would cause an adjustment reducing the Exercise
Price below the then par value of the shares of Common Stock so receivable, the
Company will take all such corporate action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Exercise Price upon the
exercise of this Warrant.
(d) Listing. If the issuance of any Shares required to be reserved for
purposes of exercise of this Warrant requires listing on any national securities
exchange, before such Shares may be issued upon exercise of this Warrant, the
Company will, at its expense, use its commercially reasonable efforts to cause
such Shares to be duly approved, or listed on the relevant national securities
exchange, as the case may be, at such time, so that such Shares may be issued in
accordance with the terms hereof.
(e) Available Information. The Company will comply with the reporting
requirements of Sections 13 and 15(d) of the Securities Act of 1934, as amended.
The Company covenants that if it is not required to file such reports, it will,
upon the request of the Holder, make publicly available such information, and it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable the Holder to sell the shares
underlying the Warrants without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission. Upon the
request of Holder, the Company will deliver to Holder a written statement that
it has complied with such requirements.
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(f) The Company shall pay all expenses, transfer taxes and other
charges payable in connection with the preparation, issue and delivery of stock
certificates issued pursuant to this Warrant, except that, in case such stock
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all stock transfer taxes which shall be payable
upon the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of delivering the notice of exercise mentioned above.
3. Stock Dividends Reclassifications, Reorganization, Anti-Dilution
Provisions, Etc.
This Warrant is subject to the following further provisions:
(a) Stock Dividends and Stock Splits. In case, after the Closing Date
and prior to the expiration of this Warrant by exercise or by its terms, the
Company issues any shares of its Common Stock as a stock dividend or
distribution or divides the number of shares of Common Stock, then, in either of
such cases, the Exercise Price per share of the Shares purchasable pursuant to
this Warrant in effect at the time of such action will be proportionately
reduced and the number of the Shares at that time purchasable pursuant to this
Warrant shall be proportionately increased; and conversely, in the event the
Company shall combine such shares of its Common Stock into a smaller number of
shares, then, and in such event, the Exercise Price per share of the Shares
purchasable pursuant to this Warrant in effect at the time of such action shall
be proportionately increased and the number of Shares at that time purchasable
pursuant to this Warrant shall be proportionately decreased.
(b) Certain Corporate Events. In case, after the Closing Date and prior
to the expiration of this Warrant by exercise or by its terms, (i) the Company
is recapitalized by reclassifying its outstanding Common Stock into stock with a
different par value or by changing its outstanding Common Stock with par value
to stock without par value, (ii) the Company or a successor entity consolidates
or merges with or conveys all or substantially all of its or of any successor
entity's property and assets to one or more, or any combination of,
corporations, partnerships, limited liability companies, joint ventures or other
entities (any such entity being included within the meaning of the term
"successor entity" in the event of any consolidation or merger of any such
entity with, or the sale of all or substantially all of the property of any such
entity to, another entity or entities), or (iii) the Company or a successor
entity dissolves, liquidates, or winds up its affairs, the Holder of this
Warrant will thereafter receive, upon the terms and conditions and during the
time specified in this Warrant, in lieu of the Shares theretofore purchasable
upon the exercise of this Warrant, the kind and amount of shares of stock, other
securities and or assets receivable upon such recapitalization or consolidation,
merger, conveyance, dissolution, liquidation, or winding up by the Holder of the
number of shares of Common Stock which the Holder of this Warrant might have
purchased, immediately prior to such recapitalization or consolidation, merger,
conveyance, dissolution, liquidation, or winding up after deduction or payment
of the appropriate Exercise Price.
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(c) Issuance of Additional Shares of Common Stock. If the Company
issues or sells any Common Stock without consideration or for consideration per
share less than the Market Price (as defined below) of the Common Stock on the
last trading day immediately preceding such issuance, then the Exercise Price in
effect immediately prior to each such issuance or sale will immediately (except
as provided below) be adjusted to that price determined by multiplying the per
share Exercise Price in effect immediately prior to such issuance or sale, by a
fraction, (1) the numerator of which shall be (x) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale plus (y) the number
of shares of Common Stock which the aggregate consideration received by the
Company for the total number of such additional shares of Common Stock so issued
or sold would purchase at the then effective per share Market Price, on the last
trading day immediately preceding such issuance or sale and (2) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such issue or sale. In such event, the number of shares of Common Stock
issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (i) the product of (a) the number of shares issuable upon
the exercise of this Warrant before such adjustment, and (b) the Exercise Price
in effect immediately prior to the issuance giving rise to this adjustment by
(ii) the new Exercise Price determined in accordance with the immediately
preceding sentence.
(d) Issuance of Warrants or Other Rights, Convertible Securities. If
the Company issues any options, warrants or other rights to purchase or acquire
Common Stock (whether or not at the time exercisable) or (b) securities by their
terms convertible into or exchangeable for Common Stock (whether or not at the
time so convertible or exchangeable) or options, warrants or rights to purchase
such convertible or exchangeable securities (whether or not at the time
exercisable) and the exercise or conversion price of such options, warrants,
other rights or convertible or exchangeable securities is below the Market
Price, then the per share Warrant Price shall be adjusted in the manner provided
in Section 3(c) on the basis that:
(1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other
rights to purchase or acquire Common Stock shall be deemed to
have been issued upon the earlier of (A) the date on which the
Company shall enter into a firm contract or commitment for the
issuance of such options, warrants or other rights and (B) the
actual time such options, warrants or rights are issued, and
for a consideration equal to the consideration, if any,
received by the Company upon the issuance of such options,
warrants or rights plus the minimum purchase price provided in
such options, warrants or rights for the Common Stock covered
thereby; and
(2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise
of options, warrants or other rights to purchase or acquire
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such convertible or exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to have been
issued upon the earlier of (A) the date on which the Company
shall enter into a firm contract or commitment for the
issuance of such convertible or exchangeable securities, or
upon the options, warrants or rights to purchase such
convertible or exchangeable securities and (B) the actual time
such securities were issued or such options, warrants or
rights were issued, and for a consideration equal to the
consideration, if any, received by the Company for any such
securities and related options, warrants or rights (excluding
any cash received on account of accrued interest or accrued
dividends), plus the additional consideration, if any, to be
received by the Company upon the conversion or exchange of
such securities, or upon the exercise of any related options,
warrants or rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or
exchange thereof;
provided, however that no further adjustment of the Exercise Price and the
number of Shares issuable upon exercise of this Warrant will be made for the
actual issuance of Common Stock upon the exercise of an option, warrant or other
right to acquire Common Stock pursuant to its terms or upon the conversion or
exchange of a convertible or exchangeable security pursuant to its terms for
which prior adjustment has been made; except that in the case of any subsequent
change in the number of shares of Common Stock deliverable upon exercise of any
such options, warrants or rights or conversion or exchange of such convertible
or exchangeable securities or any change in the consideration to be received by
the Company upon such exercise, conversion or exchange (but excluding changes
resulting from the anti-dilution provisions thereof to the extent comparable to
the anti-dilution provisions contained herein) the Exercise Price and the number
of Shares issuable upon exercise of this Warrant as then in effect shall be
readjusted to such Exercise Price and number of Shares as would have been
obtained had an adjustment been made upon the issuance of such options, warrants
or rights not exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to such change, upon
the basis of such change.
(e) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common Stock
(i) of shares of any class other than its Common Stock or (ii) of evidence of
indebtedness of the Company or any subsidiary or (iii) of assets (excluding
ordinary cash dividends; and dividends or distributions referred to in Section
3(a)), or (iv) of rights or warrants (excluding those referred to in Section
3(d)), in each such case the Exercise Price in effect immediately prior thereto
shall be reduced immediately thereafter to the price determined by dividing (x)
an amount equal to the difference resulting from (1) the number of shares of
Common Stock outstanding on such record date multiplied by the Exercise Price
per share on such record date, less (2) the fair market value (as reasonably
determined by the Company's board of directors) of such shares or evidences of
indebtedness or assets or rights or warrants to be so distributed, by (y) the
number of shares of Common Stock
6
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outstanding on such record date; such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of shares of
Common Stock issuable upon the exercise of this Warrant shall be increased to
the number obtained by dividing (i) the product of (a) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (b) the
Exercise Price in effect immediately prior to the issuance giving rise to this
adjustment by (ii) the new Exercise Price determined in accordance with the
immediately preceding sentence.
(f) Certain Repurchases of Common Stock. In case the Company effects a
pro rata repurchase of Common Stock, then the Exercise Price shall be reduced to
the price determined by multiplying the Exercise Price in effect immediately
prior to the effective date of such pro rata repurchase by a fraction of which
the numerator shall be (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such pro rata repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the
first public announcement by the Company or any of its affiliates of the intent
to effect such pro rata repurchase, minus (ii) the aggregate purchase price of
the pro rata repurchase, and of which the denominator shall be the product of
(i) the number of shares of Common Stock outstanding immediately prior to such
pro rata repurchase minus the number of shares of Common Stock so repurchased
and (ii) the Market Price per share of Common stock on the trading day
immediately preceding the first public announcement of such pro rata repurchase.
In such event, the number of shares of Common Stock issuable upon the exercise
of its Warrant shall be increased to the number obtained by dividing (i) the
product of (a) the number of Shares issuable upon the exercise of this Warrant
before such adjustment, and (b) the Exercise Price in effect immediately prior
to the pro rata repurchase giving rise to this adjustment by (ii) the new
Exercise Price determined in accordance with the immediately preceding sentence.
(g) Notwithstanding anything to the contrary herein, this Section 3
shall not apply to (i) any securities exercisable, convertible or exchangeable
for Common Stock or any agreements to issue any of the foregoing that are
currently outstanding prior to the date hereof, (ii) any issuance of Common
Stock upon the exercise, conversion or exchange of any securities if the
issuance of such security did not trigger an adjustment pursuant to this Section
3, or (iii) any issuance of Common Stock or any other securities exercisable,
convertible or exchangeable therefor, if issued for consideration in whole or in
part other than cash, where such consideration is deemed in good faith by the
Board of Directors of Harken to be equal to the fair market value of the
securities issued therefor.
(h) For purposes of this Warrant, the "Market Price" of a share of the
Common Stock as of a particular date shall mean, if the Common Stock is traded
on a securities exchange or on the Nasdaq National Market or Nasdaq SmallCap
Market, the closing price of the Common Stock on such exchange or on the Nasdaq
National Market or Nasdaq SmallCap Market for the date in question. If at any
time the Common Stock is not traded on an exchange or on the Nasdaq National
Market or Nasdaq SmallCap Market or otherwise traded in the over-the-counter
market, the Market Price shall be deemed to be the higher of (i) the book value
thereof as
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determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of a date that is within 20
days of the date as of which the determination is to be made, or (ii) the fair
market values thereof determined in good faith by any firm of independent public
accountants or a nationally recognized independent investment banking firm
selected by the Board of Directors of the Company.
(i) Computation of Adjustments. Upon the occurrence of each event
requiring an adjustment of the Exercise Price and/or of the number of Shares
purchasable pursuant to this Warrant in accordance with, and as required by, the
terms of this Section 3, the Company shall compute, or if requested by the
Holder shall forthwith employ a firm of certified public accountants (who may be
the regular accountants for the Company) who shall compute, the adjusted
Exercise Price and the adjusted number of Shares purchasable at such adjusted
Exercise Price by reason of such event in accordance with the provisions of this
Section 3 and shall prepare a certificate setting forth such adjusted Exercise
Price and the adjusted number of Shares and showing in detail the facts upon
which such conclusions are based, including a statement of the consideration
received or to be received by the Company for any additional shares of Common
Stock issued or sold or deemed to have been issued or sold and of the number of
shares of Common Stock outstanding or deemed to be outstanding. All such
calculations shall be to the nearest ten-thousandths and any adjusted Exercise
Price shall be rounded to the nearest cent and any adjusted number of shares
shall be rounded to the nearest whole share. The Company shall mail forthwith to
the Holder of this Warrant a copy of such certificate, and thereafter said
certificate shall be conclusive and shall be binding upon such Holder unless
contested by such Holder by written notice to the Company within 10 days after
receipt of the certificate by such Holder.
(j) In case:
(i) of any classification, reclassification, or other
reorganization of the capital stock of the Company,
consolidation, or merger of the Company with or into another
entity where the Company is not the surviving entity, or
conveyance of all or substantially all of the assets of the
Company;
(ii) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(iii) of a proposal by the Company to take any action of the type
described in this Section 3 (but only if the action of the
type described in this Section 3 would result in an adjustment
in the Exercise Price or the number of Shares into which this
Warrant is exercisable or a change in the type of securities
or property to be delivered upon exercise of this Warrant),
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the Company shall give notice to the Holder, in the manner which notice shall
specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of this Warrant. In the case of any action which would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of any such
action then, and in any such case, the Company shall mail to the Holder of this
Warrant a brief statement of the event giving rise to such effect and a
description thereof.
4. Non-transferability. Except to an Accredited Investor or Qualified
Institutional Buyer, as defined in the Securities Act, and in compliance with
all applicable federal and state securities laws, this Warrant and any shares
issued upon exercise thereof may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent and distribution. Any attempted assignment, transfer, pledge,
hypothecation, or other encumbrance of this Warrant and any shares issued upon
exercise thereof contrary to the provisions hereof, and any execution,
attachment, or similar process upon this Warrant, will be null, void, and of no
effect.
5. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights whatsoever as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the Holder hereof to purchase the Shares, and no mere
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
6. Loss, Theft, Destruction, or Mutilation. Upon receipt by the Company
of evidence satisfactory to it (in the exercise of its reasonable discretion and
provided that an affidavit of the Holder shall be deemed to be satisfactory
evidence) of the ownership of and the loss, theft, destruction, or mutilation of
this Warrant and (in the case of loss, theft, or destruction) of an indemnity
from the Holder satisfactory to the Company (in the exercise of its reasonable
discretion), and (in the case of mutilation) upon surrender and cancellation
thereof, the Company, at the Company's expense, will execute and deliver to the
Holder, in lieu thereof, a new Warrant of like tenor.
7. Register. The Company shall maintain, at its principal office
located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (or such other
office or agency of the Company as it may designate by notice to the Holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant
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has been issued, as well as the name and address of each transferee as may be
permitted under the terms of this Warrant and each prior owner of this Warrant.
8. Exercise or Transfer Without Registration. Anything in this Warrant
to the contrary notwithstanding if, at the time of the surrender of this Warrant
in connection with any exercise, transfer, or exchange of this Warrant, this
Warrant shall not be registered under the Act and under applicable state
securities laws, the Company may require, as a condition of allowing such
exercise, or exchange, that (i) the Holder of this Warrant, furnish to the
Company a written opinion of counsel, which opinion and counsel are acceptable
to the Company, to the effect that such exercise, or exchange may be made
without registration under said Act and under applicable state securities laws
and (ii) the Holder execute and deliver to the Company an investment letter in
form and substance acceptable to the Company. The Holder of this Warrant, by
taking and holding the same, hereby represents to the Company that such Holder
is an "accredited investor" as defined under the Act and is acquiring this
Warrant for investment and not with a view to the distribution thereof.
9. Notices. All notices requests and other communications required or
permitted to be given or delivered hereunder to the Holder of this Warrant or to
the Holder of shares acquired upon exercise of this Warrant shall be in writing,
and shall be personally delivered or shall be sent by first class mail,
certified or registered mail, postage prepaid and addressed, to such Holder at
the address shown for such Holder on the books of the Company, or at such other
address as shall have been furnished to the Company by notice from such Holder.
All notices, requests and other communications required or permitted to be given
or delivered hereunder to the Company shall be in writing, and shall be
personally delivered (including courier or express service), or shall be sent by
first class mail, certified or registered mail, postage prepaid and addressed,
to the office of the Company at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Secretary, or at such other address as shall have
been furnished to the Holder of this Warrant or to the Holder of shares acquired
upon exercise of this Warrant by notice from the Company. Any such notice,
request, or other communication may be sent by telegram, facsimile or telex, but
shall in such case be subsequently confirmed by a writing personally delivered
or sent by first class mail or by certified or registered mail as provided
above. All notices, requests, and other communications shall be deemed to have
been given either at the time of the delivery thereof to (or the receipt by, in
the case of a telegram, facsimile or telex) the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed, at the completion of the third full business day following the time of
such mailing thereof to such address, as the case may be.
10. Governing Law. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
11. Net Issuable Exchange.
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(a) In addition to and without limiting the rights of the Holder under
the terms of this Warrant, the Holder shall have the right (the "Conversion
Right") to convert this Warrant or any portion thereof into shares of Common
Stock as provided in this Section 11 at any time or from time to time prior to
the Expiration Date. Upon exercise of the Conversion Right with respect to a
particular number of shares subject to this Warrant (the "Converted Warrant
Shares"), the Company shall deliver to the Holder, without payment by the Holder
of any exercise price or any cash or consideration other than the surrender of
the right to exercise this Warrant as to the Converted Warrant Shares, a number
of shares of Common Stock determined by multiplying the number of Converted
Warrant Shares by the following:
FMV - Exercise Price
---------------------
FMV
FMV shall be determined using the Market Price as of the Conversion
Date and Exercise Price shall be determined as of the close of business on the
Conversion Date (as defined below).
(b) The Conversion Right may be exercised by the Holder by surrendering
this Warrant Certificate at the principal office of the Company together with a
written statement specifying that the Holder thereby intends to exercise the
Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in subsection (a) above as the
Converted Warrant Shares) in exercise of the Conversion Right. Such conversion
shall be effective upon receipt by the Company of this Warrant Certificate
together with the aforesaid written statement or on such later date as is
specified therein (the "Conversion Date"), but not later than the Expiration
Date. Certificates for the shares of Common Stock issuable upon exercise of the
Conversion Right and, in the case of a partial exercise, a new warrant
certificate evidencing the shares remaining subject to this Warrant shall be
issued as of the Conversion Date and shall be delivered to the Holder within 15
days following the Conversion Date.
12. Optional Redemption. Notwithstanding anything to the contrary
herein, within five (5) business days after the exercise of this Warrant by the
holder in accordance with Section 1 above, the Company shall have the right to
deliver to the holder in full satisfaction of all of its obligations pursuant to
the Warrant, cash, in an amount equal to the product of the Market Price on the
day of exercise and number of the Shares which would otherwise be delivered
pursuant to such exercise.
13. Miscellaneous.
(a) Amendments. This Warrant or any provision hereof may not be
changed, waived, or discharged, or terminated orally, but only by an instrument
in writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
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(b) Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) Successors and Assigns. This Warrant shall be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.
(d) Limitation of Liability. In no event shall any direct or indirect
member, stockholder, officer, director, partner or other representative of
Holder or any of its affiliates be personally liable for any obligation of
Holder under this Agreement. In no event shall recourse with respect to the
obligations under this Agreement of Holder be had to the assets or business of
any person other than Holder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on this 19th day of August, 1999.
HARKEN ENERGY CORPORATION
By:
--------------------------------
[Seal] Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
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FORM OF SUBSCRIPTION
Dated:
----------, ----
To:
-------------------------------
The undersigned, pursuant to the provisions set forth in the within
Warrant Number ________ hereby agrees to purchase ______ shares of Common Stock
covered by such Warrant, and makes payment herewith in full therefor at the
price per share provided by such Warrant in cash or by certified or official
bank check in the amount of $_______________. Please issue a certificate of
certificates for such shares of Common Stock in the following name:
Name:
-------------------------------------
Address:
----------------------------------
----------------------------------
Signature:
--------------------------------
Title of Signing Officer of Agent (if any):
Note: The above signature should correspond exactly with the name on
the face of the within Warrant or with the name of the assignee
appearing in the assignment form.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said Holder covering the balance of the shares purchasable thereunder.
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