EX-4.1
Exhibit 4.1
Form of Warrant Agreement
AGREEMENT made as of __________ ____, 2000 between Ness Energy International,
Inc., a Washington corporation, herein called the Company, and Fidelity Transfer
Company, Inc., herein called the Warrant Agent.
Whereas the Company has determined to issue and deliver Stock Purchase
Warrants, hereinafter called Warrants, entitling the holders thereof to
purchase an aggregate of __________ shares of Common Stock of the Company; and
Whereas the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the bearers of the Warrants; and
Whereas all acts and things necessary to make the Warrants when executed on
behalf of the Company and countersigned by or on behalf of the Warrant Agent,
as in this agreement, provided, the valid, binding, and legal obligations of
the Company, and to authorize the execution and delivery of this agreement,
have been done and performed;
Now, therefore, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
Article I
Execution and Countersignature of Warrants
Section 1.01. EXECUTION AND COUNTERSIGNATURE OF WARRANTS. (a) Each Warrant,
whenever issued, shall be dated ______________, shall be in substantially the
form of Exhibit 1 hereto, shall be signed by, or bear the facsimile signature
of, the President or a Vice President of the Company and shall bear a
facsimile of the Company's seal. In case any officer whose facsimile
signature has been placed upon any Warrant shall have ceased to be such
before such Warrant is issued, it may be issued with the same effect as if
such officer had not ceased to be such at the date of issuance. No Warrant
may be exercised until it has been countersigned by the Warrant Agent as
provided in paragraph (b) below.
(b) The Warrant Agent shall countersign a Warrant only
(i) if the Warrant is to be issued in exchange or substitution
for one or more previously countersigned Warrants, as
hereinafter provided, or
(ii) if the Company instructs the Warrant Agent to do so.
(c) Unless and until countersigned by the Warrant Agent pursuant to
this agreement, a Warrant shall be invalid and of no effect.
Article II
Warrant Price, Duration, and Exercise of Warrants
Section 2.01. WARRANT PRICE. Each Warrant shall, when countersigned by the
Warrant Agent, entitle the bearer thereof, subject to the provisions thereof
and of this agreement, to purchase from the Company the number of shares of
Common Stock stated therein, at the price of $2.50 per share, subject to the
adjustments provided in Article III hereof. The term Warrant Price as used in
this agreement refers to the price per share at which Common Stock may be
purchased at the time a Warrant is exercised.
Section 2.02. DURATION OF WARRANTS. Warrants may be exercised only on or
before a date, which is eighteen (18) months after the date of the Warrants
(hereinafter called the expiration date). Each Warrant not exercised on or
before the expiration date shall become void, and all rights thereunder and
all rights in respect thereof under this agreement shall cease at the close
of business on the expiration date.
Section 2.03. EXERCISE OF WARRANTS. (a) A Warrant, when countersigned by the
Warrant Agent, may be exercised by surrendering it, at the corporate trust
office of the Warrant Agent, or at the office of its successor as Warrant
Agent, in Salt Lake City, in the State of Utah, with the subscription form
set forth in the Warrant duly executed, and by paying in full, in lawful
money of the United States, the Warrant Price for each full share of Common
Stock as to which the Warrant is exercised and any applicable taxes.
(b) As soon as practicable after the exercise of any Warrant, the Company shall
issue to or upon the order of the bearer of such Warrant a certificate or
certificates for the number of full shares of Common Stock to which he is
entitled, registered in such name or names as may be directed by him, and
if such Warrant shall not have been exercised in full (except with respect
to a remaining fraction of a share), a new countersigned Warrant for the
number of shares (including fractional shares) as to which such Warrant
shall not have been exercised.
In the event that the same holder of one or more Warrants exercises the
purchase rights thereunder in the same transaction in a manner which leaves
the right to purchase a fraction of a share unexercised, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
the same fraction of the current market price of a share of Common Stock on
the business day which next precedes the day of exercise reduced by the same
fraction of the Warrant Price of a share of Common Stock on such day. For
such purpose, the current market price shall be the last sale price, regular
way, of the Common Stock on such next preceding business day, or, if no sale
takes place on such day, the average of the closing bid and asked prices on
such day, as officially quoted on the NASDAQ Bulletin Board or such other
listing or exchange where the Company's shares shall then be quoted.
(c) All shares of Common Stock issued upon the exercise of a Warrant shall be
validly issued, and the Company shall pay all taxes in respect of the issue
thereof. The Company shall not be required, however, to pay any tax imposed
in connection with any transfer involved in the issue of a certificate for
shares of Common Stock in any name other than that of the bearer of the
Warrant surrendered in connection with the purchase thereof; and in such
case the Company shall not be required to issue or deliver any stock
certificate until such tax shall have been paid.
(d) Each person in whose name any such certificate for shares of Common Stock
is issued shall for all purposes be deemed to have become the holder of
record of such shares on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open.
Article III
Adjustments
Section 3.01. STOCK DIVIDENDS--SPLIT-UPS. If after the date hereof, and
subject to the provisions of Section 3.07 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock or by a split-up of shares of Common Stock, then, on the day
following the date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend or split-up, the number of shares
issuable on exercise of each Warrant shall be increased in proportion to such
increase in outstanding shares and the then applicable Warrant Price shall be
correspondingly decreased.
Section 3.02. AGGREGATION OF SHARES. If after the date hereof, and subject to
the provisions of Section 3.07, the number of outstanding shares of Common
Stock is decreased by a combination or reclassification of shares of Common
Stock, then, after the effective date of such combination or
reclassification, the number of shares issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in outstanding shares and
the then applicable Warrant Price shall be correspondingly increased.
Section 3.03. SPECIAL STOCK DIVIDENDS. If after the date hereof shares of any
class of the Company (other than Common Stock) are issued by way of a stock
dividend on outstanding Common Stock, then, commencing with the day following
the date fixed for the determination of holders of Common Stock entitled to
receive such stock dividend, in addition to any share of Common Stock
receivable upon exercise of the Warrants, the Warrant holders shall, upon
such exercise of the Warrants, be entitled to receive, as nearly as
practicable, the same number of shares of dividend stock, plus any shares
issued upon any subsequent change, replacement, subdivision, or combination
thereof to which the holders would have been entitled had their Warrants been
exercised immediately prior to such stock dividend. No adjustment in the
Warrant Price shall be made merely by virtue of the happening of any event
specified in this Section 3.03.
Section 3.04. REORGANIZATION, ETC. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale
of all or substantially all of its assets to another corporation shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, or sale, lawful and fair provision shall be made
whereby the Warrant holders shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in the
Warrants and in lieu of the shares of Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, such shares of stock, securities, or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented by the Warrants had such reorganization, reclassification,
consolidation, merger, or sale not taken place, and in any such case
appropriate provision shall be made with respect to the rights and interests
of the Warrant holders to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Warrant Price and of
the number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be in relation to any share of
stock, securities, or assets thereafter deliverable upon the exercise hereof.
The Company shall not effect any such consolidation, merger, or sale unless
prior to the consummation thereof the successor corporation (if other than
the Company) resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed and
delivered to the Warrant Agent the obligation to deliver to the Warrant
holders such shares of stock, securities, or assets as, in accordance with
the foregoing provisions, such holders may be entitled to purchase.
Section 3.05. NOTICE OF CHANGES IN WARRANT. Upon any adjustment of the Warrant
Price or the number of shares issuable on exercise of a Warrant, then and in
each such case the Company shall give written notice thereof to the Warrant
Agent, which notice shall state the Warrant Price resulting from such adjustment
and the increase or decrease, if any, in the number of shares purchasable at
such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. The Company shall also publish
such notice once in an Authorized Newspaper. For purposes of this agreement,
an Authorized Newspaper shall mean a newspaper customarily published on each
business day, in one or more morning editions or one or more evening
editions, or both (and whether or not it shall be published in Saturday and
Sunday editions or on holidays), printed in the English language and of
general circulation in Salt Lake City and State of Utah. Failure to give or
publish such notice, or any defect therein, shall not affect the legality or
validity of the subject adjustments.
Section 3.06. OTHER NOTICES. In case at any time:
(a) the Company shall pay any dividends payable in stock upon its
Common Stock or make any distribution (other than regular cash
dividends) to the holders of its Common Stock;
(b) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class
or other rights;
(c) there shall be any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of
the Company with, or sale of all or substantially all of its
assets to, another corporation: or
(d) there shall be voluntary or involuntary dissolution, liquidation,
or winding up of the Company;
then, in any one or more of such cases, the Company shall give written notice
and publish the same in the manner set forth in Section 3.05, of the date on
which (i) the books of the Company shall close or a record shall be taken for
such dividend, distribution, or subscription rights, or (ii) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, as the
case may be. Such notice shall be given and published at least 20 days prior
to the action in question and not less than 20 days prior to the record date
of the date on which the Company's transfer books are closed in respect
thereto. Failure to give or publish such notice, or any defect therein, shall
not affect the legality or validity of any of the matters set forth in the
foregoing clauses (a) to (d), both inclusive.
Section 3.07. LIMITATION OF FRACTIONS. Anything in Section 3.01 or 3.02 to
the contrary notwithstanding, upon exercise of the Warrants cumulative
adjustments in the number of shares issuable on exercise of Warrants shall be
made only to the nearest multiple of one-tenth of a share, i.e., fractions of
less than five-hundredths of a share shall be disregarded and fractions of
five-hundredths of a share, or more, shall be treated as being on-tenth of a
share.
Section 3.08. FORM OF WARRANT. The form of Warrant need not be changed because
of any change pursuant to this Article, and Warrants issued after such change
may state the same Warrant Price and the same number of shares as is stated in
the Warrants initially issued pursuant to this agreement. However, the Company
may at any time in its sole discretion (which shall be conclusive) make any
change in the form of Warrant that the Company may deem appropriate and that
does not affect the substance thereof; and any Warrant thereafter
issued or countersigned, whether in exchange or substitution for an
outstanding Warrant or otherwise, may be in the form as so changed.
Article IV
Other Provisions Relating to Rights of Bearers of Warrants
Section 4.01. NO RIGHTS AS STOCKHOLDER CONFERRED BY WARRANTS. If any Warrant
is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent
may, on such terms as to indemnify or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination, tenor, and
date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new
Warrant shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant
shall be at any time enforceable by anyone.
Section 4.03. RESERVATION OF COMMON STOCK. The Company shall at all times
reserve and keep available a number of its authorized but unissued shares of
Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants.
Article V
Transfer and Exchange of Warrants
Section 5.01. NEGOTIABILITY AND OWNERSHIP OF WARRANTS. Title to each Warrant
shall pass by delivery thereof, and delivery thereof by any person in
possession thereof, however, such possession may have been acquired, shall
have the same effect as delivery under like circumstances of a negotiable
instrument payable to bearer. The Company and the Warrant Agent may deem and
treat the bearer of any Warrant as the true and lawful owner thereof for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.
Section 5.02. EXCHANGE OF WARRANTS. After countersignature by the Warrant Agent
in accordance with the provisions of this agreement, one or more Warrants may be
surrendered to the Warrant Agent for exchange and, upon cancellation thereof,
the Warrant Agent shall countersign and deliver in exchange therefor one or more
new Warrants, as requested by the bearer of the cancelled Warrant or Warrants,
for the same aggregate number of shares as were evidenced by the Warrant or
Warrants so cancelled.
Article VI
Concerning the Warrant Agent and Other Matters
Section 6.01. PAYMENT OF TAXES. The Company will from time to time promptly
pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon
the exercise of Warrants, but the Company shall not be obligated to pay any
transfer taxes in respect of the Warrants or such shares.
Section 6.02. RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.
(a) The Warrant Agent, or any successor to it hereafter appointed, may
resign its duties and be discharged from all further duties and
liabilities hereunder after giving one month's notice in writing to
the Company, except that such shorter notice may be given as the
Company shall, in writing, accept as sufficient. If the office of the
Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a successor Warrant
Agent in place of the Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the bearer of a Warrant (who shall,
with such notice, submit his Warrant for
inspection by the Company), then the bearer of any Warrant may apply
to any court of competent jurisdiction for the appointment of a
successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States of
America, and authorized under such laws of its state of incorporation
to exercise corporate trust powers and subject to supervision or
examination by federal or state authority and having a combined
capital and surplus of not less than $5,000,000. The combined capital
and surplus of any such successor Warrant Agent shall be deemed to be
the combined capital and surplus as set forth in the most recent
report of its condition published prior to its appointment, provided
that such reports are published at least annually pursuant to law or
the requirements of a federal or state supervising or examining
authority. After appointment, any successor Warrant Agent shall be
vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as
if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or
appropriate, the predecessor Warrant Agent shall execute and deliver,
at the expense of the company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge,
and deliver any and all instruments in writing for more fully and
effectually vesting in and confirming to such successor Warrant Agent
all such authority, powers, rights, immunities, duties, and
obligations. Not later than the effective date of any such
appointment the Company shall give notice thereof to the predecessor
Warrant Agent and each transfer agent for the Common Stock, and shall
forthwith publish a copy of such notice once in an Authorized
Newspaper. Failure to give or publish such notice, or any defect
therein, shall not affect the validity of the appointment of the
successor Warrant Agent.
(b) Any corporation into which the Warrant Agent may be merged or
with which it may be consolidated or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall
be a party shall be the successor Warrant Agent under this
agreement without any further act.
Section 6.03. FEES AND EXPENSES OF WARRANT AGENT. The Company agrees (a) that it
will pay the Warrant Agent reasonable remuneration for its services as such
Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all
expenditures that the Warrant Agent may reasonably incur in the execution of its
duties hereunder; and (b) that it will perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and delivered all such
further and other acts, instruments, and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing of the
provisions of this agreement.
Section 6.04. ADDITIONAL PROVISIONS.
(a) The Warrant Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the
Warrant Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this agreement
the Warrant Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President or a Vice
President or the Treasurer or the Controller or the Secretary of
the Company and delivered to the Warrant Agent; and such
statement shall be full warrant to the Warrant Agent for any
action taken or suffered in good faith by it under the provisions
of this agreement in reliance upon such statement; but in its
discretion the Warrant Agent may in lieu thereof accept other
evidence of such fact or matter or may require such further or
additional evidence as to it may seem reasonable.
(c) The Warrant Agent shall be liable hereunder only for its own
negligence or willful misconduct.
(d) The Warrant Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this agreement or
in the Warrants (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Warrant Agent shall not be under any responsibility in
respect of the validity of this agreement or the execution and
delivery hereof or in respect of the validity or execution of any
Warrant (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this agreement or in any Warrant; nor
shall it be responsible for the making of any adjustments
required under the provisions of Article III or responsible for
the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant
to this agreement or any Warrant or as to whether any shared of
Common Stock will when issued be validly issued and fully paid
and nonassessable.
Section 6.05. ACCEPTANCE OF AGENCY. The Warrant Agent hereby accepts
the Agency established by this agreement and agrees to perform the same
upon the terms and conditions herein set forth and, among other things,
shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of shares of the Company's stock
through the exercise of Warrants.
Section 6.06. MODIFICATION OF AGREEMENT. The Warrant Agent may, without
the consent or concurrence of the bearers of the Warrants, by
supplemental agreement or otherwise concur with the Company in making
any changes or corrections in this agreement that it shall have been
advised by counsel (who may be counsel for the Company) are required to
cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein
contained.
Section 6.07. SUCCESSORS. All the covenants and provisions of this
agreement by or for the benefit of the Company or the Warrant Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 6.08 NOTICES AND DEMANDS TO COMPANY AND WARRANT AGENT. Any
no6tice or demand authorized by this agreement to be given or made by
the Warrant Agent or by the bearer of any Warrant to or on the Company
shall be sufficiently given or made if sent by mail first-class or
registered, postage prepaid, addressed (until another address is filed
in writing by the Company with the Warrant Agent), as follows:
Ness Energy International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Any notice or demand authorized by this agreement to be given or made
by the bearer of any Warrant or by the Company to or on the Warrant
Agent shall be sufficiently given or made if sent by mail first-class
or registered, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as follows:
Fidelity Transfer Co., Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 6.09. APPLICABLE LAW. The validity, interpretation, and
performance of this agreement and of the Warrants shall be governed by
the law of the State of Texas.
Section 6.10. PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. Nothing in
this agreement expressed and nothing that may be implied from any of
the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the parties
hereto under or by reason of this agreement or of any covenant,
condition, stipulation, promise, or agreement hereof, and all
covenants, conditions, stipulations, promises, and agreements in this
agreement contained shall be for the sole and exclusive benefit of the
parties hereto and their successors and of the bearers of the Warrants.
Section 6.11. EXAMINATION OF AGREEMENT. A copy of this agreement shall
be available at all reasonable times at the corporate office of the
Warrant Agent for inspection by the bearer of any Warrant. The Warrant
Agent may require any such bearer to submit his Warrant for inspection
by it.
Section 6.12. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and are not part of this agreement and
shall not affect the interpretation thereof.
In witness whereof this agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year
first above written.
Corporate Seal
Ness Energy International, Inc.
Attest:
by__________________________________________________________
__________________________________________________________________
President
Secretary
Corporate Seal
Fidelity Transfer Co., Inc,
Attest:
by________________________________________________________
__________________________________________________________________
Vice President
Assistant Cashier
