Attached files
EXHIBIT 4.2
FORM OF WARRANT
Hinto Energy, Inc. Warrant Number: _____
July __, 2011 ("the Grant Date")
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK UNDERLYING THIS WARRANT WERE
ISSUED IN A REGISTERED TRANSACTION UNDER THE SECURITIES ACT OF 1933 (AS AMENDED,
THE "SECURITIES ACT"). THE SECURITIES EVIDENCED HEREBY MAY NOT BE TRANSFERRED
WITHOUT (1) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER
MAY BE LAWFULLY MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAW; OR (ii) SUCH REGISTRATION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
HINTO ENERGY, INC.
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK ("WARRANT") CERTIFIES THAT, for
value received, ___________________________ (the "Holder"), is entitled to
subscribe for and purchase from HINTO ENERGY, INC. (the "Company"), a
corporation organized and existing under the laws of the State of Wyoming, at
the Warrant Exercise Price specified below during the exercise period specified
below to and including _________________________ (________,000) fully paid and
non-assessable shares of Common Stock of the Company (the "Common Stock").
The exercise price of this Warrant (subject to adjustment as noted below) shall
be _______ ($______) per share (The "Warrant Exercise Price").
This Warrant is subject to the following provisions, terms, and conditions:
1. EXERCISE. This Warrant or any portion thereof shall be exercisable at any
time from and after the date hereof, by the registered Holder by payment of the
Warrant Exercise Price per share in immediately available funds to the Company
at any time prior to 5:00 p.m., Colorado time, on August __, 2013 ("the
Expiration Date").
Holder may assign portions of the warrants hereunder by Letter of Instruction to
the Company prior to issue.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants that:
(a) the Company has all requisite power and authority to execute, issue
and perform this Warrant and to issue the Common Stock;
(b) this Warrant has been duly authorized by all necessary corporate
action, has been duly executed and delivered, and is a legal and binding
obligation of the Company;
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(c) all shares which may be issued upon the exercise of the rights
represented by this Warrant according to the terms hereof or represented by the
Common Stock will, upon issuance, be duly authorized and issued, fully paid, and
nonassessable; and
(d) during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of issue or transfer upon exercise of the subscription
rights evidenced by this Warrant, a sufficient number of shares of its Common
Stock to provide for the exercise of the rights represented by this Warrant.
3. ADJUSTMENTS.
(a) In case the Company shall
(i) declare a dividend upon the Common Stock payable in Common
Stock (other than a dividend declared to effect a subdivision
of the outstanding shares of Common Stock, as described in
subparagraph (b) below) or any obligations or any shares of
stock of the Company which are convertible into or
exchangeable for Common Stock (such obligations or shares of
stock being hereinafter referred to as "Convertible
Securities"), or in any rights or options to purchase any
Common Stock or Convertible Securities, or
(ii) declare any other dividend or make any other distribution upon
the Common Stock,
then thereafter the Holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of
Common Stock to which such holder shall be entitled upon such
exercise, and, in addition and without further payment
therefor, such number of shares of Common Stock, such that
upon exercise hereof, such Holder would receive as a result of
each dividend described in clause (i) above and each dividend
or distribution described in clause (ii) above which such
Holder would have received by way of any such dividend or
distribution if, continuously since the record date for any
such dividend or distribution, such holder (x) had been the
record holder of the number of shares of Common Stock then
received, and (y) had retained all dividends or distributions
in stock or securities (including Common Stock or Convertible
Securities, or in any rights or options to purchase any Common
Stock or Convertible Securities) payable in respect of such
Common Stock or in respect of any stock or securities paid as
dividends or distributions and originating directly or
indirectly from such Common Stock.
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(b) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the number of shares
subject to this Warrant immediately prior to such subdivision shall be
proportionately increased, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the number of shares subject to this Warrant immediately prior to such
combination shall be proportionately reduced.
(c) If any capital reorganization or reclassification of the capital
stock of the Company, 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 in such a way that holders of Common Stock shall
be entitled to receive stock, securities, or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, 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 hereby 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 holder
of this Warrant to the end that the provisions hereof (including without
limitation provisions for adjustments of the Warrant Exercise Price and of the
number of shares purchasable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities, or assets thereafter deliverable upon the exercise hereof.
(d) If the Company issues or grants any rights or options to subscribe
for or to purchase shares of Common Stock at a price per share of Common Stock
less than either (I) the Warrant Exercise Price, and (II) after 6 months from
date hereof, the then-current Market Price (as defined below) per share of
Common Stock, then the total number of shares of Common Stock issuable upon
exercise of this Warrant shall be increased by an amount determined by
multiplying (I) the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such adjustment by (II) an amount determined by
dividing (i) the number of shares of Common Stock underlying the rights or
options giving rise to such adjustment by (ii) the total number of shares of
Common Stock then outstanding.
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(e) Upon each adjustment in the number of shares the Holder is entitled
to purchase upon exercise of this Warrant, the Warrant Exercise Price hereunder
shall be appropriately adjusted such that the Holder shall hold Warrants
entitling Holder to purchase the number of shares as so adjusted for an
aggregate Warrant Exercise Price equal to the aggregate Warrant Exercise Price
in effect immediately prior to such adjustment.
(f) In case any time any of the adjustments required by 3(a) through
(e) occur;
(i) the Company shall make any distribution to the holders of its
capital stock;
(ii) the Company shall offer for subscription pro rata to the
holders of its capital stock any additional shares of stock of
any class or other rights; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give
written notice, by first-class mail, postage prepaid,
addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company,
of the date on which (x) the books of the Company shall close
or a record shall be taken for such dividend, subdivision,
distribution, or subscription rights, or (y) such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, or conversion or
redemption shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of capital
stock of record shall participate in such dividend,
distribution, or subscription rights, or shall be entitled to
exchange their capital stock for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up, or conversion or redemption, as the case may be.
Such written notice shall be given at least ten (10) days
prior to the action in question and not less than ten (10)
days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
(g) No fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the holder hereof upon such
exercise) in respect of such fraction in an amount equal to the same fraction of
the Market Price per share of Common Stock as of the close of business on the
date of the notice required by Section 3(f). "Market Price" shall mean, if the
Common Stock is traded on a securities exchange or on the NASDAQ System, the
average of the closing prices of the Common Stock on such exchange or the NASDAQ
System on the twenty (20) trading days ending on the trading day prior to the
date of determination, or, if the Common Stock is otherwise traded in the
over-the-counter market, the average of the closing bid prices on the twenty
(20) trading days ending on the trading day prior to the date of determination.
If at any time the Common Stock is not traded on an exchange or the NASDAQ
System, or otherwise traded in the over-the-counter market, the Market Price
shall be deemed to be the higher of
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(i) the book value thereof as determined by any firm of
independent public accountants of recognized standing selected
by the Board of Directors of the Company as of the last day of
any month ending within sixty (60) days preceding the date as
of which the determination is to be made, or
(ii) the fair value thereof determined in good faith by the Board
of Directors of the Company as of a date which is within
fifteen (15) days of the date as of which the determination is
to be made.
4. NO VOTING RIGHTS. This Warrant shall not entitle the Holder hereof to any
voting rights or other rights as a stockholder of the Company.
5. RESTRICTIONS ON TRANSFER. This Warrant and the shares of Common Stock issued
or issuable through the exercise of this Warrant are "restricted securities"
under the Securities Act of 1933 (the "Securities Act") and the rules and
regulations promulgated thereunder and may not be sold, transferred, pledged, or
hypothecated without such transaction being registered under the Securities Act
and applicable state laws or the availability of an exemption therefrom ; a
legend to this effect shall appear on this Warrant and, unless the issuance is a
registered transaction, on all shares of Common Stock issued upon the exercise
hereof. The holder of this Warrant, by acceptance hereof, agrees to give written
notice to the Company before transferring this Warrant or transferring any
Common Stock issuable or issued upon the exercise hereof of such holder's
intention to do so, describing briefly the manner of any proposed transfer of
this Warrant or such holder's intention as to the disposition to be made of
shares of Common Stock issuable or issued upon the exercise hereof. Such holder
shall also provide the Company with an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer of this
Warrant or disposition of shares may be effected without registration or
qualification (under any federal or state law) of this Warrant or the shares of
Common Stock issuable or issued upon the exercise hereof. Upon receipt of such
written notice and opinion by the Company, such holder shall be entitled to
transfer this Warrant, or to exercise this Warrant in accordance with its terms
and dispose of the shares received upon such exercise or to dispose of shares of
Common Stock received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by such holder to the Company,
provided that an appropriate legend respecting the aforesaid restrictions on
transfer and disposition may be endorsed on this Warrant or the certificates for
such shares. Transfers to family of Holder as "restricted" shall be allowed by
Company, as a matter of course.
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6. TRANSFER PROCEDURES. Subject to the provisions of Section 5, this Warrant and
all rights hereunder are transferable, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
the bearer of this Warrant, when endorsed, may be treated by the Company and all
other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding; but until such transfer on such books, the Company
may treat the registered holder hereof as the owner for all purposes.
7. REGISTRATION RIGHTS.
(a) Demand Registration Rights. During the two (2) year period
commencing the Date of Issuance, upon the written request of the Holders of
those securities representing at least a majority of the sum of the Shares
issuable upon the exercise of this Warrant, the Company agrees to prepare and
file with the Commission, no more than once, a post-effective Amendment, or a
registration statement under the Act, registering or qualifying the securities
underlying this Warrant. The Company agrees to use its best efforts to cause the
above filing to become effective.
(b) If at any time the Company proposes to register the sale of shares
of Common Stock (whether for itself or any of its security holders) under the
Securities Act and the registration form to be used may be used for the
registration of shares underlying this Warrant (a "Piggyback Registration"), the
Company shall give prompt written notice to the Holder of its intention to
effect such a registration and, subject to Section 7(c) below, shall include in
such registration all shares of Common Stock underlying this Warrant with
respect to which the Company has received Holder's written request for inclusion
in such registration, provided that such request must be received by Company
within 20 days after the date of the Company's notice to Holder. The
Registration Expenses in all Piggyback Registrations shall be paid by the
Company.
(c) If a Piggyback Registration is an underwritten primary registration
on behalf of the Company or a successor, and the managing underwriters advise
the Company in writing that in their opinion the number of shares of Common
Stock requested to be included in such registration exceeds the number which can
be sold in such offering without adversely affecting the marketability of the
offering, the Company shall exclude from such registrations the excess amount of
shares of Common Stock, and shall include in such registration (i) first, the
securities the Company proposes to sell; (ii) second, shares of Common Stock
requested to be included in such registration by the holders of all securities
of the Company having registration rights, prorata among the owners of such
securities on the basis of the number of shares of Common Stock or equivalent
shares of Common Stock owned by each such owner, and (iii) third, other
securities requested to be included in such registration, in the Company's
discretion.
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(d) Whenever the Holder has requested that any shares of Common Stock
underlying this Warrant be registered pursuant to this Section 7, the Company
shall use its best efforts to effect the registration and the sale of such
shares in accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
(i) notify the Holder of the effectiveness of each registration
statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than
180 days and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
such registration statement during such period in accordance
with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(ii) furnish the Holder such number of copies of such registration
statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the
disposition of the shares of Common Stock underlying this
Warrant;
(v) use its best efforts to comply with all applicable rules and
regulations of the Securities and Exchange Commission, and in
the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any equity securities included
in such registration statement for sale in any jurisdiction,
the Company shall use its best efforts promptly to obtain the
withdrawal of such order.
(e) In connection with any registration statement in which Holder is
participating, each Holder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by Holder.
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(f) Holder may not participate in any registration under this Section 7
which is underwritten unless Holder (i) agrees to sell Holder's shares of Common
Stock on the basis provided in any underwriting arrangements approved by the
Company and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
8. MISCELLANEOUS.
(a) Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, by facsimile transmission or electronic mail,
or otherwise delivered by hand or by messenger, addressed
(i) if to a holder of this Warrant, at such holder's address set
forth on the books of the Company, or at such other address as
such holder shall have furnished to the Company in writing; or
(ii) if to the Company, one copy should be sent to the Company's
current address at Hinto Energy, Inc., 7609 Ralston Road,
Arvada, Colorado 80002, or at such other address as the
Company shall have designated by notice.
Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given when delivered if delivered
personally; if sent by first class, postage prepaid mail, at the earlier of its
receipt or seventy-two (72) hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid; or, if sent by facsimile transmission or
electronic mail as of the date delivery is confirmed by the sender's equipment.
(b) Severability. If any provision of this Agreement shall be held to
be illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid, or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid, or unenforceable provision were not contained herein.
(c) Governing Law. This Warrant will be governed in accordance with
federal law to the extent applicable and by the internal law, not the law of
conflicts, of the State of Wyoming.
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IN WITNESS WHEREOF, Hinto Energy, Inc. has caused this Warrant to be signed by
its duly authorized officer and dated as of _____________________, 20__.
HINTO ENERGY, INC.
By: _______________________
George Harris,
Chief Financial Officer
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SUBSCRIPTION FORM
To be Executed by the Holder of this Warrant if such
Holder Desires to Exercise this Warrant in Whole or in Part:
To: Hinto Energy, Inc. (the "Company")
The undersigned ___________________________ (Social Security number or taxpayer
identification number of Subscriber: _________________________) hereby
irrevocably elects to exercise the right of purchase represented by this Warrant
for, and to purchase thereunder, ____________ shares of the Common Stock (the
"Common Stock") provided for therein and tenders payment herewith to the order
of the Company in the amount of $______________, such payment being made as
provided on the face of this Warrant.
The undersigned requests that certificates for such shares of Common Stock be
issued as follows:
Name: __________________________________________________________________________
Address: _______________________________________________________________________
Deliver to: ____________________________________________________________________
Address: _______________________________________________________________________
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under this Warrant be registered in
the name of, and delivered to, the undersigned at the address stated above.
Dated: ______________________
Signature:__________________________________
Note: The signature on this Subscription
Form must correspond with the name as
written upon the face of this Warrant in
every particular, without alteration or
enlargement or any change whatever.