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EXHIBIT 4.37
THIS WARRANT IS NOT ASSIGNABLE BY THE HOLDER WITHOUT THE EXPRESS WRITTEN
CONSENT OF THE COMPANY DELIVERED TO THE ASSIGNEE AT THE TIME OF SUCH
ASSIGNMENT AND ANY PURPORTED ASSIGNMENT MADE IN VIOLATION OF THIS PROVISION
SHALL RENDER THIS WARRANT VOID AND OF NO EFFECT.
NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES INTO
WHICH THIS WARRANT ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.
QUEEN SAND RESOURCES, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: Number of Shares: _________
Series
Date of Issuance: March ____ 1999
Queen Sand Resources, Inc., a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, NORTHERN TIER ASSET MANAGEMENT, INC. (the
"HOLDER") is entitled, subject to the terms set forth below, to purchase from
the Company upon surrender of this Warrant, at any time or times on or after
the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date
(as defined herein) _____________ fully paid nonassessable shares of Common
Stock (as defined in Section 1(b)) of the Company (the "WARRANT SHARES") at the
purchase price per share provided in Section 1(b) below (the " EXERCISE
PRICE"); provided, however, that in no event shall the Holder be entitled to
exercise this Warrant for a number of Warrant Shares in excess of that number
of Warrant Shares which, upon giving effect to such exercise, would cause the
aggregate number of shares of Common Stock beneficially owned by the Holder and
its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
following such exercise. For purposes of the
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foregoing proviso, the aggregate number of shares of Common Stock beneficially
owned by the Holder and its affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such proviso is being made, but shall exclude shares of Common
Stock which would be issuable upon (i) exercise of the remaining, unexercised
Warrants beneficially owned by the Holder and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by the Holder and its affiliates (including,
without limitation, any convertible notes, convertible preferred stock,
warrants or rights to receive shares of Common Stock) subject to a limitation
on conversion or exercise analogous to the limitation contained herein. Except
as set forth in the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended. The Holder may waive the
foregoing limitations by written notice to the Company upon not less than 61
days prior notice (with such waiver taking effect only upon the expiration of
such 61 day notice period).
Section 1.
(a) Consulting Agreement. This Warrant is one of the warrants
(the "COMMON STOCK WARRANTS") issued pursuant to that certain Consulting
Agreement, dated as of April 9 1999, between the Company and the Holder, (, the
"CONSULTING AGREEMENT").
(b) Definitions. The following words and terms as used in
this Warrant shall have the following meanings:
"BUSINESS DAY" means any day except Saturday, Sunday and
any day which is designated in the State of New York as a legal holiday or a
day on which banking institutions are authorized or legally required or other
government action to close.
"CLOSING BID PRICE" means, for any security as of any
date, the last closing bid price for such security on The Nasdaq SmallCap
Market as reported by Bloomberg Financial Markets ("BLOOMBERG"), or, if The
Nasdaq SmallCap Market is not the principal trading market for such security,
the last closing bid price of such security on a Subsequent Market (as defined
below) on which such security is listed or traded as reported by Bloomberg, or
if the foregoing do not apply, the last closing bid price of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no closing bid price is reported for such
security by Bloomberg, the last closing trade price of such security as
reported by Bloomberg, or, if no last closing trade price is reported for such
security by Bloomberg, the average of the bid prices of any market makers for
such security as reported in the "pink sheets" by the National Quotation
Bureau, Inc. If the Closing Bid Price cannot be calculated for such security on
such date on any of the foregoing bases, the Closing Bid Price of such security
on such date shall be the fair market value as mutually determined by the
Company and the Holders the Common Stock Warrants. If the Company and the
Holders of the Common Stock Warrants are unable to agree upon the fair market
value of the Common Stock, then such dispute shall be resolved pursuant to
Section 2(a) of this
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Warrant with the term "Closing Bid Price" being substituted for the term
"Market Price." (All such determinations to be appropriately adjusted for any
stock dividend, stock split or other similar transaction during such period).
"COMMON STOCK" means (I) the Company's common stock, par
value $.0015 per share, and (ii) any capital stock into which such Common Stock
shall have been changed or any capital stock resulting from a reclassification
of such Common Stock.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given
time, the number of shares of Common Stock actually outstanding at such time,
plus the number of shares of Common Stock deemed to be outstanding pursuant to
Section 8 or Convertible Securities (as defined in Section 8) are actually
exercisable or convertible at such time, but excluding any shares of Common
Stock issuable upon exercise of the Common Stock Warrants.
"ESCROW AGENT" means ▇▇▇▇ ▇. ▇▇▇▇▇, having an office at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"EXERCISE PRICE" shall be $1.50, subject to adjustment as
hereinafter provided.
"EXPIRATION DATE" means the ______________
"DEEMED MAXIMUM MARKET PRICE" means, with respect to any
security for any date, the lesser of [$2.00/$2.50/$3.00] and the average of the
Closing Bid Prices for such security during the three (3) consecutive trading
days immediately preceding such date.
"OTHER SECURITIES" means (i) those convertible
securities, options and warrants of the Company issued prior to, and
outstanding on, the date of issuance of this Warrant, (ii) the Repricing Common
Shares (as defined in the Securities Purchase Agreements dated as of July 8,
1998 and November 10, 1998), (iii) shares of Common Stock, and warrants or
other securities that are convertible into or exchangeable for shares of Common
Stock, issuable in connection with the subsequent acquisition by the Company of
oil and natural gas companies (whether by merger, purchase of shares or
exchange) or properties, and (vi) rights of JEDI (as defined in the Purchase
Agreement) under Section 7.01 of the Securities Purchase Agreement, dated as of
March 27, 1997, between the Company and JEDI (as such agreement is in effect on
the date of the issuance of this Warrant) arising from any issuances described
in in this definition.
"PERSON" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof,
or any other entity or organization.
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"REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement dated the date hereof, between the Company and the Holder
entered into in connection with the Consulting Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SUBSEQUENT MARKET" means any of the New York Stock
Exchange, American Stock Exchange or Nasdaq National Market or any other public
stock exchange on which the Company's Securities are listed for trading.
"TRADING DAY" means (a) a day on which the Common Stock
is listed for trading on the Nasdaq SmallCap Market or on a Subsequent Market
or (b) if the Common Stock is not listed on the Nasdaq SmallCap Market or a
Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then a Trading Day shall be a Business Day.
"WARRANT" means this Warrant and all Warrants issued in
exchange, transfer or replacement thereof.
(c) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references
herein (A) to the Company shall be deemed to include the Company's successors
and (B) to any applicable law defined or referred to herein, shall be deemed
references to such applicable law as the same may have been or may be amended
or supplemented from time to time.
(ii) When used in this Warrant, the words "HEREIN,"
"HEREOF," and "HEREUNDER," and words of similar import, shall refer to this
Warrant as a whole and not to any provision of this Warrant, and the words
"SECTION," "SCHEDULE," and "EXHIBIT" shall refer to Sections of, and Schedules
and Exhibits to, this Warrant unless otherwise specified.
(iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes the
plural, and vice versa.
Section 2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, this Warrant
may be exercised by the Holder at any time and from time to time in whole or in
part provided that, without the prior written authorization of the Company, the
Holder may not exercise this Warrant before May 15,
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1999 and then only if the warrants of all series having a lesser series number
than this Warrant have been exercised in full and 30 days have expired since
the last exercise of any warrant having a lesser series number. For the
purposes of this paragraph, series 1 and 2 shall be considered as one series.
Exercise may be done at any time during normal business hours on any business
day on or after the opening of business on the date hereof and prior to 11:59
P.M. Eastern Time on the Expiration Date by delivery to the Escrow Agent and
the Company in the manner specified below of (i) a written notice of such
Holder's election to exercise this Warrant which notice shall be in the form
attached as Exhibit A hereto, (the "EXERCISE NOTICE"), and shall specify the
number of Warrant Shares to be purchased and the other information set out
therein, (ii) payment to the Company of an amount equal to the Exercise Price
multiplied by the number of Warrant Shares as to which the Warrant is being
exercised (the "AGGREGATE EXERCISE PRICE") in cash or by check or wire transfer
payable to the Company in immediately available funds, and (iii) the surrender
of this Warrant. Provided, that if such Warrant Shares are to be issued in any
name other than that of the registered Holder of this Warrant, such issuance
shall be deemed a transfer and the provisions of Section 7 shall be applicable
and the Exercise Notice shall be accompanied by such additional documentation
as may be required by that Section. Such Exercise Notice, payment, Warrant and
other documentation required for exercise shall be delivered to the Escrow
Agent at the address set out in Section 1 with a copy of the Exercise Notice
being delivered simultaneously to the Company.
In the event of any exercise of the rights represented by
this Warrant in compliance with this Section 2(a), a certificate or
certificates for the Warrant Shares so purchased, in such denominations as may
be requested by the Holder hereof and registered in the name of, or as directed
by, the Holder, shall be delivered at the Company's expense to, or as directed
by, such Holder as soon as practicable after such rights shall have been so
exercised, and in any event no later than five (5) business days after delivery
of the Exercise Notice to the Escrow Agent. In the case of a dispute as to the
determination of the Exercise Price of a security or the arithmetic calculation
of the Warrant Shares, the Company shall promptly issue to the Holder the
number of shares of Common Stock that is not disputed and shall submit the
disputed determinations or arithmetic calculations to the Holder via facsimile
within one business day of receipt of the Holder's subscription notice. If the
Holder and the Company are unable to agree upon the determination of the
Exercise Price or arithmetic calculation of the Warrant Shares within one day
of such disputed determination or arithmetic calculation being submitted to the
Holder, then the Company shall immediately submit via facsimile (I) the
disputed determination of the Exercise Price to an independent, reputable
investment banking firm or (ii) the disputed arithmetic calculation of the
Warrant Shares to its independent, outside accountant. The Company shall cause
the investment banking firm or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than two (2) Business Days from receipt of the disputed
determinations or calculations. Such investment banking firm's or accountant's
determination or calculation, as the case may be, shall be deemed conclusive
absent manifest error.
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(b) Unless the rights represented by this Warrant shall have
expired or shall have been fully exercised, the Company shall, as soon as
practicable and in no event later than five business days after any exercise
and at its own expense, issue a new Warrant identical in all respects to the
Warrant exercised except (i) it shall represent rights to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under the
Warrant exercised, less the number of Warrant Shares with respect to which such
Warrant is exercised, and (ii) the Holder thereof shall be deemed for all
corporate purposes to have become the Holder of record of such Warrant Shares
immediately prior to the close of business on the date on which the Warrant is
surrendered and payment of the amount due in respect of such exercise and any
applicable taxes is made, irrespective of the date of delivery of certificates
evidencing such Warrant Shares, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are properly
closed, such person shall be deemed to have become the Holder of such Warrant
Shares at the opening of business on the next succeeding date on which the
stock transfer books are open.
(c) No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares of Common
Stock issued upon exercise of this Warrant shall be rounded up or down to the
nearest whole number.
(d) Notwithstanding anything contained herein to the
contrary, the Holder of this Warrant may, at its election exercised in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula:
Net Number = Y x (A - B)/B
For purposes of the foregoing formula:
Y = the total number shares with respect to which this Warrant
is then being exercised.
A = is the lesser of (i) the Deemed Maximum Market Price
applicable to the particular block and (ii) the average of the
closing bid prices of the common stock for 5 trading days
immediately prior to but not including the Exercise Date.
B = the Exercise Price then in effect at the time of such
exercise.
For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to
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have been acquired by the Holder hereof, and the holding period for the Warrant
Shares shall be deemed to have been commenced, on the issue date.
Section 3. Covenants as to Common Stock; Certain Registrations. The
Company hereby covenants and agrees as follows:
(a) This Warrant is, and any Common Stock Warrants issued in
substitution for or replacement of this Warrant will upon issuance be, duly
authorized and validly issued.
(b) All Warrant Shares which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof.
(c) During the period within which the rights represented by
this Warrant may be exercised, the Company will at all times have authorized
and reserved at least 100% of the number of shares of Common Stock needed to
provide for the exercise of the rights then represented by this Warrant and the
par value of said shares will at all times be less than or equal to the
applicable Exercise Price.
(d) The Company shall list the Warrant Shares within 10 days
of the date of this Warrant on the Nasdaq SmallCap Market and each other
Subsequent Market on which the Common Stock is then listed or traded and shall
maintain such listing for so long as any other shares of Common Stock shall be
so listed.
(e) 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. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant.
(f) This Warrant will be binding upon any entity succeeding
to the Company by merger, consolidation or acquisition of all or substantially
all of the Company's assets.
Section 4. Taxes. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.
Section 5. Warrant Holder Deemed Not a StockHolder. Except as
otherwise specifically provided herein, no Holder, as such, of this Warrant
shall be entitled to vote or
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receive dividends or be deemed the Holder of shares of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action
(whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of this Warrant of the Warrant Shares which he or she is then
entitled to receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on
such Holder to purchase any securities or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the Holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.
Section 6. Representations of Holder. The Holder of this Warrant, by
the acceptance hereof, represents that it is acquiring this Warrant and the
Warrant Shares for its own account for investment and not with a view to, or
for sale in connection with, any distribution hereof or of any of the shares of
Common Stock or other securities issuable upon the exercise thereof, and not
with any present intention of distributing any of the same. The Holder of this
Warrant further represents, by acceptance hereof, that, as of this date, such
Holder is an accredited investor as such term is defined in Rule 501(a) of
Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act (an "ACCREDITED INVESTOR"). Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the Holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale other
than pursuant to an effective registration statement or an exemption under the
Securities Act and that such Holder is an Accredited Investor. Notwithstanding
the foregoing, by making the representations herein, the Holder does not agree
to hold the Warrant or the Warrant Shares for any minimum or other specified
term and reserves the right to dispose of the Warrant and the Warrant Shares at
any time in accordance with or pursuant to a registration statement or an
exemption under the Securities Act. If such Holder cannot make such
representations because they would be factually incorrect, it shall be a
condition to such Holder's exercise of the Warrant that the Company receive
such other representations as the Company considers reasonably necessary to
assure the Company that the issuance of its securities upon exercise of the
Warrant shall not violate any United States or state securities laws.
Section 7. Ownership and Transfer.
(a) The Company shall maintain at its principal executive
offices (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 has
been issued, as well as the name and address of each transferee. The Company
may treat the person in whose name any Warrant is registered on the register as
the
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owner and Holder thereof for all purposes, notwithstanding any notice to
the contrary, but in all events recognizing any transfers made in accordance
with the terms of this Warrant.
(b) The Holder of this Warrant understands that this Warrant
has not been and is not expected to be, registered under the Securities Act or
any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (a) subsequently registered thereunder, or (b) such Holder
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that
the securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration; provided that (i)
any sale of such securities made in reliance on Rule 144 promulgated under the
Securities Act may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, any resale of such securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the Securities and Exchange Commission
thereunder; and (ii) except as provided below, neither the Company nor any
other person is under any obligation to register the Common Stock Warrants
under the Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder except as may be expressly set
out herein.
(c) The Company is obligated to register the Warrant Shares
for resale under the Securities Act pursuant to the Registration Rights
Agreement and the Holder of this Warrant is entitled to the registration rights
in respect of the Warrant Shares as set forth in the Registration Rights
Agreement.
Section 8. Adjustment of Exercise Price and Number of Shares. In order
to prevent dilution of the rights granted under this Warrant, the Exercise
Price and the number of shares of Common Stock issuable upon exercise of this
Warrant shall be adjusted from time to time as follows:
(a) Adjustment of Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced and the
number of shares of Common Stock obtainable upon exercise of this Warrant will
be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination will be proportionately increased and the number of shares of
Common Stock obtainable upon exercise of this Warrant will be proportionately
decreased.
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(b) Reorganization, Reclassification, Consolidation, Merger
or Sale. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
Person (as defined below) or other transaction which is effected in such a way
that Holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as "ORGANIC CHANGE." Prior to
the consummation of any Organic Change, the Company will make appropriate
provision (in form and substance satisfactory to the Holders of the Common
Stock Warrants representing a majority of the shares of Common Stock issuable
upon exercise of such Common Stock Warrants then outstanding) to ensure that
each of the Holders of the Common Stock Warrants will thereafter have the right
to acquire and receive in lieu of or addition to (as the case may be) the
shares of Common Stock immediately theretofore acquirable and receivable upon
the exercise of such Holder's Common Stock Warrants, such shares of stock,
securities or assets as may be issued or payable in the Organic Change with
respect to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon the exercise of such Holder's Common
Stock Warrants had such Organic Change not taken place (without taking into
account any limitations or restrictions on exercise). In any such case, the
Company will make appropriate provision (in form and substance satisfactory to
the Holders of the Common Stock Warrants representing a majority of the shares
of Common Stock issuable upon exercise of such Common Stock Warrants then
outstanding) with respect to such Holders' rights and interests to insure that
the provisions of this Section 8 and Section 9 will thereafter be applicable to
the Common Stock Warrants (including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is other than
the Company, an immediate adjustment of the Exercise Price to the value for the
Common Stock reflected by the terms of such consolidation, merger or sale, and
a corresponding immediate adjustment in the number of shares of shares of
Common Stock acquirable and receivable upon exercise of the Common Stock
Warrants, if the value so reflected is less than the Exercise Price in effect
immediately prior to such consolidation, merger or sale). The terms of any
documents evidencing an Organic Change shall include such terms as to give
effect to the tenor of this provision and evidencing the obligation to deliver
to each Holder of Common Stock Warrants such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such Holder may be
entitled to acquire.
(c) Distribution of Assets. If the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to
Holders of Common Stock as a partial liquidating dividend, by way or return of
capital or otherwise (including any dividend or distribution to the Company's
stockholders of cash or shares (or rights to acquire shares) of capital stock
of a subsidiary) (a "DISTRIBUTION"), at any time after the issuance of this
Warrant, then the Holder of this Warrant shall be entitled upon exercise of
this Warrant for the purchase of any or all of the shares of Common Stock
subject hereto, after the record date for determining shareHolders entitled to
receive such Distribution, to receive the amount of such assets (or rights)
which would have been payable to the Holder had such Holder been the Holder of
such shares of Common Stock on the record date for determination of
stockholders entitled to such Distribution.
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(d) Notices.
(i) Immediately upon any adjustment of the Exercise
Price, the Company will give written notice thereof to the Holder of this
Warrant, setting forth in reasonable detail and certifying the calculation of
such adjustment.
(ii) The Company will give written notice to the Holder
of this Warrant at least twenty (20) days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to Holders of Common Stock or (C) for determining rights to
vote with respect to any Organic Change, dissolution or liquidation and in no
event shall such notice be provided to such Holder prior to such information
being made known to the public.
(iv) The Company will also give written notice to the
Holder of this Warrant at least twenty (20) days prior to the date on which any
Organic Change, dissolution or liquidation will take place and in no event
shall such notice be provided to such Holder prior to such information being
made known to the public.
Section 9. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt
of an indemnification undertaking, issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.
Section 10. Notice. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Warrant must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) upon receipt, when
delivered by a delivery service, in each case properly addressed to the party
to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Queen Sand Resources, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Executive Vice President
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and
Queen Sand Resources, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Executive Vice President
With copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Boeing, Esq.
If to a Holder of this Warrant, to it at the address set forth
below such Holder's signature on the signature page hereof.
Each party shall provide five days' prior written notice to the other party of
any change in address or facsimile number.
Section 11. Miscellaneous.
(a) Waiver and Modification - This Warrant and any term hereof may be
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party or Holder hereof against which enforcement of such change,
waiver, discharge or termination is sought.
(b) Headings - The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(c) Governing Law - This Warrant shall be governed by and interpreted
under the laws of the State of Delaware without regard to principles of
conflicts of law thereof.
(d) Escrow Delivery - Pending exercise or cancellation, this Warrant
shall be delivered to and held by the Escrow Agent in accordance with the terms
of the Escrow Agreement entered into between the parties and the Escrow Agent
as of even date herewith.
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(e) Cancellation Upon termination of the Consulting Agreement the
Company may cancel any unexercised portion of this Warrant without notice or
compensation to the Holder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its duly authorized officer as of the date first indicated above.
QUEEN SAND RESOURCES, INC.
By:
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Name:
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Title:
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15
EXHIBIT A TO WARRANT
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
QUEEN SAND RESOURCES, INC.
The undersigned Holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Queen
Sand Resources, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached Warrant (the "WARRANT"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Warrant Exercise Price.
The Holder intends that payment of the Exercise Price shall be
made as:
(a) "Cash Exercise" with respect to ______________________
Warrant Shares; and/or
(b) "Cashless Exercise" with respect to ___________________
Warrant Shares (to the extent permitted by the terms of the
Warrant).
2. Payment of Warrant Exercise Price. In the event and to the
extent that the Holder has elected a Cash Exercise with respect
to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder shall pay the sum of $___________________ to
the Company in accordance with the terms of the Warrant based on
an Exercise Price of $___________.
3. Determination of Cashless Exercise. In the event and to the
extent that the Holder has elected a Cashless Exercise with
respect to some or all of the Warrant Shares to be issued
pursuant hereto, the number of Warrant Shares shall be
determined in accordance with the terms of the Warrant based on
a Closing Bid Price of $___________ and an Exercise Price of
$__________.
4. Delivery of Warrant Shares. The Company shall deliver to the
Holder __________ Warrant Shares in accordance with the terms of
the Warrant to the persons whose names appear below in the
number of certificates as indicated beside their respective
names:
16
Name
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Address
-----------------------------
Number of Shares
-----------------------------
Number of Certificates
-----------------------------
Date:__________________, _____
Name of Registered Holder
By:
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Name:
Title:
17
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of Queen Sand Resources, Inc., a
Delaware corporation, represented by warrant certificate no. _____, standing in
the name of the undersigned on the books of said corporation. The undersigned
does hereby irrevocably constitute and appoint ______________, attorney to
transfer the warrants of said corporation, with full power of substitution in
the premises.
Dated: ___________________
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By:
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Its:
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