THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER FEDERAL OR STATE SECURITIES OR
BLUE SKY LAWS, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
THEREFROM. NO OFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION
(COLLECTIVELY, A "DISPOSAL") OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE OR THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE THEREOF MAY BE MADE UNLESS (I) REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS OR (II) XCL LTD. RECEIVES A WRITTEN OPINION OF UNITED STATES
LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO IT TO THE
EFFECT THAT SUCH DISPOSAL IS EXEMPT FROM SUCH REGISTRATION
REQUIREMENTS.
WARRANTS TO PURCHASE
COMMON STOCK OF XCL LTD.
Initial Issuance on March 15, 1999
Void after 5:00 p.m. New York Time, March 15, 2004
No. LM-II-1
THIS CERTIFIES THAT, for value received, Robert R.
Durkee (the "Holder") (whose Tax Identification Number is 464-34-
7022) is the registered holder of warrants (the "Warrants") to
purchase from XCL LTD., a Delaware corporation (the "Company"),
at any time or from time to time beginning on September 16, 1999,
and until 5:00 p.m., New York time, on March 15, 2004 (the
"Expiration Date"), subject to the conditions set forth herein,
at the initial exercise price of U.S. $1.25 per share (the
"Initial Exercise Price"), subject to adjustment as set forth
herein (the "Exercise Price"), up to an aggregate of Ten Thousand
(10,000) fully paid and non-assessable shares (the "Shares"), par
value $.01 per share (the "Common Stock"), of the Company upon
surrender of this certificate (the "Certificate") and payment of
the Exercise Price multiplied by the number of Shares in respect
of which Warrants are then being exercised (the "Purchase Price")
at the principal office of the Company presently located at 110
Rue Jean Lafitte, 2nd Floor, Lafayette, LA 70508.
1. Exercise of Warrants
(a) The exercise of any Warrants represented
by this Certificate is subject to the conditions set forth below
in Section 4, "Compliance with Securities Laws.
(b) Subject to compliance with all of the
conditions set forth herein, the Holder shall have the right to
purchase from the Company the number of Shares which the Holder
may at the time be entitled to purchase pursuant hereto, upon
surrender of this Certificate to the Company at its principal
office, together with the form of election to purchase attached
hereto duly completed and signed, and upon payment to the Company
of the Purchase Price; provided, that if the date of such
purchase is not a day on which banking institutions in New York
City are authorized or obligated to do business (a "Business
Day"), then such purchase shall take place before 5:00 p.m. New
York time on the next following Business Day.
(c) No Warrant may be exercised after 5:00
p.m., New York time, on the Expiration Date, at which time all
Warrants evidenced hereby, unless exercised prior thereto, shall
thereafter be null and void and all further rights in respect
thereof under this Certificate shall thereupon cease.
(d) Payment of the Purchase Price shall be
made in United States dollars in cash, by wire transfer or by
certified check or banker's draft payable to the order of the
Company, or any combination of the foregoing.
(e) The Warrants represented by this
Certificate are exercisable at the option of the Holder, in whole
or in part (but not as to fractional Shares). Upon the exercise
of less than all of the Warrants evidenced by this Certificate,
the Company shall forthwith issue to the Holder a new certificate
of like tenor representing the number of unexercised Warrants.
(f) Subject to compliance with all of the
conditions set forth herein, upon surrender of this Certificate
to the Company at its principal office, together with the form of
election to purchase attached hereto duly completed and signed,
and upon payment of the Purchase Price, the Company shall cause
to be delivered promptly to or upon the written order of the
Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of whole Shares
purchased upon the exercise of the Warrants.
2. Elimination of Fractional Interests. The
Company shall not be required to issue certificates representing
fractions of Shares and shall not be required to issue scrip in
lieu of fractional interests. Instead of any such fractional
interest that would otherwise be issuable to such Holder, the
Company shall repurchase such fractional interest in cash in an
amount equal to such fractional interest of the closing bid price
for the Common Stock on The American Stock Exchange, Inc. or any
other principal stock exchange or in the over-the-counter market
or other securities market in which the Common Stock is then
trading on the date of determination (the "Market Price per
Share"); provided, however, the Company shall not be required to
pay any Holder any amount in respect of such fractional interest
which is less than $1.00.
3. Payment of Taxes. The Company will pay all
documentary stamp taxes, if any, attributable to the issuance and
delivery of the Shares upon the exercise of the Warrants;
provided, however, that the Company shall not be required to pay
any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any Warrant or any Shares
in any name other than that of the Holder, which transfer taxes
shall be paid by the Holder, and until payment of such transfer
taxes, if any, the Company shall not be required to issue such
Shares.
4. Compliance with Securities Laws.
(a) The issuance of the Warrants and the
Shares issuable pursuant thereto (the Warrants and such Shares
being referred to collectively as the "Securities") to the Holder
has not been, and, except as hereinafter set forth in Section 9,
will not be, registered under the Securities Act or any other
domestic or foreign securities or blue sky laws (the Securities
Act and any such other applicable securities or blue sky laws are
hereinafter collectively referred to herein as the "Securities
Laws") in reliance upon exemptions from the registration
requirements thereof; the Holder is acquiring the Securities
solely for its own account for investment and not with a view to,
or for offer or resale in connection with, a distribution thereof
in violation of any Securities Laws. The Securities shall be
held by the Holder unless the sale or transfer thereof is
subsequently registered under applicable Securities Laws or an
exemption from such registration is available at the time of the
proposed sale or transfer thereof. Except as hereinafter set
forth in Section 9, the Company shall be under no obligation to
file a registration statement under the Securities Act covering
the sale or transfer of the Securities or otherwise to register
the Securities for sale under applicable Securities Laws.
(b) Prior to any sale, transfer or other
disposition of any of the Securities (so long as they have not
been registered under the Securities Act as contemplated in
Section 9 hereof or are not otherwise freely transferable under
the Securities Laws), the Holder shall give at least three
business days prior written notice to the Company of its
intention to effect such sale, transfer or other disposition and
to comply in all other respects with this Section 4(b). Each
such notice shall describe the manner and circumstances of the
proposed transfer in sufficient detail to enable counsel to
render the opinions required herein, and, if requested by the
Company, shall be accompanied by an opinion of counsel reasonably
acceptable to the Company (which shall include Holder's in-house
counsel), addressed to the Company and satisfactory in form and
substance to the Company, stating that, in the opinion of such
counsel, such transfer will be a transaction exempt from
registration under the Securities Laws and that all necessary
consents, approvals or authorizations to such transfer have been
obtained. Assuming the receipt by the Company of such
satisfactory opinion, the Holder shall thereupon be entitled to
transfer such Securities in accordance with the terms of the
notice delivered by the Holder to the Company. Each certificate
or other document issued representing the Securities shall bear
an appropriate legend suitably conformed, unless, in the opinion
of the respective counsel for the Holder and the Company, such
legend is not required in order to aid in assuring compliance
with applicable Securities Laws.
(c) The Holder shall not sell any Shares
included in a Registration Statement (as defined in Section 9)
filed by the Company and declared effective by the Securities and
Exchange Commission during the period from the date it receives
notice of the filing of any such Registration Statement by the
Company through the 90th day after the effective date of such
Registration Statement, to the public pursuant to Rules 144 or
144A under the Securities Act or otherwise, without the prior
receipt of the written consent of the Company; provided, however,
that such restriction shall not be applicable to the Holder
unless the Registration Statement relates to an underwritten
public offering of the Company's securities; provided, further,
the Holder shall be bound by the terms of this paragraph in
connection with no more than one registration statement in any
six month period.
(d) In addition to any specific restrictive
legends that may be required by applicable Securities Laws or
agreements to which the Holder may be a party, the Holder shall
be bound by a restrictive legend which may be placed on the
certificates representing the Securities. The Company may place
and instruct any transfer agent for the Securities to place a
stop transfer notation in the stock records in respect of the
certificates representing the Securities, provided that such
securities may be transferred upon compliance with the provisions
of this Section 4 and Section 5 below.
5. Transfer of Warrants.
(a) The Warrants shall be transferable only on
the books of the Company maintained at the Company's principal
office upon delivery of this Certificate with the form of
assignment attached hereto duly completed and signed by the
Holder or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or
authority to transfer. The Company may, in its discretion,
require, as a condition to any transfer of Warrants, a signature
guarantee by a commercial bank or trust company, by a broker or
dealer which is a member of the National Association of
Securities Dealers, Inc. Upon any registration of transfer, the
Company shall deliver a new certificate or certificates of like
tenor and evidencing in the aggregate a like number of Warrants
to the person entitled thereto in exchange for this Certificate,
subject to the limitations provided herein, without any charge
except for any tax or other governmental charge imposed in
connection therewith.
(b) Notwithstanding anything in this
Certificate to the contrary, neither any of the Warrants nor any
of the Shares issuable upon exercise of any of the Warrants shall
be transferable, except upon compliance by the Holder with (i)
the provisions of Sections 4 and 5 hereof, concerning such
transfer as if the Holder were the initial Holder, and (ii) any
applicable provisions of the Securities Act and any applicable
state and foreign securities or blue sky laws. Any transfer not
made in such compliance shall be null and void, and given no
effect hereunder.
6. Exchange and Replacement of Warrant
Certificates; Loss or Mutilation of Warrant Certificates.
(a) This Certificate is exchangeable without
cost, upon the surrender hereof by the Holder at the principal
office of the Company, for new certificates of like tenor and
date representing in the aggregate the right to purchase the same
number of Shares in such denominations as shall be designated by
the Holder at the time of such surrender.
(b) Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Certificate and, in case of such loss, theft
or destruction, of indemnity and security reasonably satisfactory
to it, and reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation
of this Certificate, if mutilated, the Company will make and
deliver a new certificate of like tenor, in lieu thereof.
7. Initial Exercise Price; Adjustment of Number of
Shares.
(a) The Warrants initially are exercisable at
the Initial Exercise Price per Share, subject to adjustment from
time to time as provided herein. No adjustments will be made for
cash dividends, if any, paid to shareholders of record prior to
the date on which the Warrants are exercised.
(b) In case the Company shall at any time
after the date of this Certificate (i) declare a dividend on the
shares of Common Stock payable in shares of Common Stock, or (ii)
subdivide or split up the outstanding shares of Common Stock, the
amount of Shares to be delivered upon exercise of any Warrant
will be appropriately increased so that the Holder will be
entitled to receive the amount of Shares that such Holder would
have owned immediately following such actions had such Warrant
been exercised immediately prior thereto, and the Exercise Price
in effect immediately prior to the record date for such dividend
or the effective date for such subdivision shall be
proportionately decreased, all effective immediately after the
record date for such dividend or the effective date for such
subdivision or split up. Such adjustments shall be made
successively whenever any event listed above shall occur.
(c) In case the Company shall at any time
after the date of this Certificate combine the outstanding shares
of Common Stock into a smaller number of shares the amount of
Shares to be delivered upon exercise of any Warrant will be
appropriately decreased so that the Holder will be entitled to
receive the amount of Shares that such Holder would have owned
immediately following such action had such Warrant been exercised
immediately prior thereto, and the Exercise Price in effect
immediately prior to the record date for such combination shall
be proportionately increased, effective immediately after the
record date for such combination. Such adjustment shall be made
successively whenever any such combinations shall occur.
(d) In the event that the Company shall at any
time after the date of this Certificate (i) issue or sell any
shares of Common Stock (other than the Shares) or securities
convertible or exchangeable into Common Stock to all holders of
Common Stock without consideration or at a price per share (or
having a conversion price per share, if a security convertible
into Common Stock) less than the Market Value per share of Common
Stock (as defined in Section 7(f) hereof), or (ii) issue or sell
options, rights or warrants to subscribe for or purchase Common
Stock to all holders of Common Stock at a price per share less
than the Market Price per share of Common Stock (as defined in
Section 7(f) hereof), the Exercise Price to be in effect after
the date of such issuance shall be determined by multiplying the
Exercise Price in effect on the day immediately preceding the
relevant issuance or record date, as the case may be, used in
determining such Market Value or Market Price, by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding on such issuance or record date plus the number of
shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so to be issued or to be
offered for subscription or purchase (or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such Market Value or Market Price, as the case
may be, and the denominator of which shall be the number of
shares of Common Stock outstanding on such issuance or record
date plus the number of additional shares of Common Stock to be
issued or to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); such adjustment shall become effective immediately
after the close of business on such issuance or record date;
provided, however, that no such adjustment shall be made for the
issuance of (s) options to purchase shares of Common Stock
granted pursuant to the Company's employee stock option plans
approved by shareholders of the Company (and the shares of Common
Stock issuable upon exercise of such options) (provided that
option exercise prices shall not be less than the Market Value of
the Common Stock (as defined in Section 7(f) hereof) on the date
of the grant of such options), (t) the Company's warrants to
purchase shares of Common Stock (and the shares of Common Stock
issuable upon exercise of such warrants), outstanding on the date
hereof, (u) the Company's shares of Amended Series A, Cumulative
Convertible Preferred Stock (and the shares of Common Stock
issuable upon conversion of such Preferred Stock), outstanding on
the date hereof, or (v) the Company's shares of Series B,
Cumulative Preferred Stock (and the shares of Common Stock
issuable in lieu of dividend and redemption payments thereunder),
outstanding on the date hereof. In case such subscription price
may be paid in a consideration, part or all of which shall be in
a form other than cash, the value of such consideration shall be
as determined reasonably and in good faith by the Board of
Directors of the Company. Shares of Common Stock owned by or
held for the account of the Company or any wholly-owned
subsidiary shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever the date of such issuance is fixed (which date of
issuance shall be the record date for such issuance if a record
date therefor is fixed); and, in the event that such shares or
options, rights or warrants are not so issued, the Exercise Price
shall again be adjusted to be the Exercise Price which would then
be in effect if the date of such issuance had not been fixed.
(e) In case the Company shall make a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
its indebtedness, securities other than Common Stock or assets
(other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in
Common Stock), the Exercise Price to be in effect after such date
of distribution shall be determined by multiplying the Exercise
Price in effect on the date immediately preceding the record date
for the determination of the shareholders entitled to receive
such distribution by a fraction, the numerator of which shall be
the Market Price per share of Common Stock (as defined in Section
7(f) hereof) on such date, less the then-fair market value (as
determined reasonably and in good faith by the Board of Directors
of the Company of the portion of the assets, securities or
evidences of indebtedness so to be distributed applicable to one
share of Common Stock and the denominator of which shall be such
Market Price per share of Common Stock, such adjustment to be
effective immediately after the distribution resulting in such
adjustment. Such adjustment shall be made successively whenever
a date for such distribution is fixed (which date of distribution
shall be the record date for such distribution if a record date
therefor is fixed); and, if such distribution is not so made, the
Exercise Price shall again be adjusted to be the Exercise Price
which would then be in effect if such date of distribution had
not been fixed.
(f) For the purposes of any computation under
this Section 7, the "Market Price per share" of Common Stock on
any date shall be deemed to be the average of the closing bid
price for the 20 consecutive trading days ending on the record
date for the determination of the shareholders entitled to
receive any rights, dividends or distributions described in this
Section 7, and the "Market Value per share" of Common Stock on
any date shall be deemed to be the closing bid price on the date
of the issuance of the securities for which such computation is
being made, as reported on the principal United States securities
exchange on which the Common Stock is listed or admitted to
trading or if the Common Stock is not then listed on any United
States stock exchange, the average of the closing sales price on
each such day during such 20 day period, in the case of the
Market Price computation, or on such date of issuance, in the
case of the Market Value computation, in the over-the-counter
market as reported by the National Association of Securities
Dealers' Automated Quotation System ("NASDAQ"), or, if not so
reported, the average of the closing bid and asked prices on each
such day during such 20 day period in the case of the Market
Price computation, or on such date of issuance, in the case of
the Market Value computation, as reported in the "pink sheets"
published by the National Quotation Bureau, Inc. or any successor
thereof, or, if not so quoted, the average of the middle market
quotations for such 20 day period in the case of the Market Price
computation, or on such date of issuance, in the case of the
Market Value computation, as reported on the daily official list
of the prices of stock listed on The London Stock Exchange
Limited ("The Stock Exchange Daily Official List"). "Trading
day" means any day on which the Common Stock is available for
trading on the applicable securities exchange or in the
applicable securities market. In the case of Market Price or
Market Value computations based on The Stock Exchange Daily
Official List, the Market Price or Market Value shall be
converted into United States dollars at the then spot market
exchange rate of pounds sterling (UK) into United States dollars
as quoted by Chemical Bank or any successor bank thereto on the
date of determination. If a quotation of such exchange rate is
not so available, the exchange rate shall be the exchange rate of
pounds sterling in United States dollars as quoted in The Wall
Street Journal on the date of determination.
(g) No adjustment in the Exercise Price shall
be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided that any
adjustments which by reason of this Section 7(g) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment; provided, further that such adjustment
shall be made in all events (regardless of whether or not the
amount thereof or the cumulative amount thereof amounts to 1% (or
more) upon the happening of one or more of the events specified
in Sections 7(b), (c) or (i). All calculations under this
Section 7 shall be made to the nearest cent.
(h) If at any time, as a result of an
adjustment made pursuant to Section 7(b) or (c) hereof, the
Holder of any Warrant thereafter exercised shall become entitled
to receive any shares of the Company other than shares of Common
Stock, thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares
contained in this Section 7, and the provisions of this
Certificate with respect to the Shares shall apply on like terms
to such other shares.
(i) In the case of (l) any capital
reorganization of the Company, or of (2) any reclassification of
the shares of Common Stock (other than a subdivision or
combination of outstanding shares of Common Stock), or (3) any
consolidation or merger of the Company, or (4) the sale, lease or
other transfer of all or substantially all of the properties and
assets of the Company as, or substantially as, an entirety to any
other person or entity, each Warrant shall after such capital
reorganization, reclassification of the shares of Common Stock,
consolidation, or sale be exercisable, upon the terms and
conditions specified in this Certificate, for the number of
shares of stock or other securities or assets to which a holder
of the number of Shares purchasable (immediately prior to the
effectiveness of such capital reorganization, reclassification of
shares of Common Stock, consolidation, or sale) upon exercise of
a Warrant would have been entitled upon such capital
reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale; and in any such case, if
necessary, the provisions set forth in this Section 7 with
respect to the rights thereafter of the Holder shall be
appropriately adjusted (as determined reasonably and in good
faith by the Board of Directors of the Company) so as to be
applicable, as nearly as may reasonably be, to any shares of
stock or other securities or assets thereafter deliverable on the
exercise of a Warrant. The Company shall not effect any such
consolidation or sale, unless prior to or simultaneously with the
consummation thereof, the successor corporation, partnership or
other entity (if other than the Company) resulting from such
consolidation or the corporation, partnership or other entity
purchasing such assets or the appropriate entity shall assume, by
written instrument, the obligation to deliver to the Holder of
each Warrant the shares of stock, securities or assets to which,
in accordance with the foregoing provisions, such Holder may be
entitled and all other obligations of the Company under this
Certificate. For purposes of this Section 7(i) a merger to which
the Company is a party but in which the Common Stock outstanding
immediately prior thereto is changed into securities of another
corporation shall be deemed a consolidation with such other
corporation being the successor and resulting corporation.
(j) Irrespective of any adjustments in the
Exercise Price or the number or kind of shares purchasable upon
the exercise of the Warrant, Warrant Certificates theretofore or
thereafter issued may continue to express the same Exercise Price
per share and number and kind of Shares as are stated on the
Warrant Certificates initially issuable pursuant to this Warrant.
8. Required Notices to Warrant Holders. Nothing
contained in this Certificate shall be construed as conferring
upon the Holder the right to vote or to consent or to receive
notice as a shareholder in respect of any meetings of
shareholders for the election of directors or any other matter,
or as having any rights whatsoever as a shareholder of the
Company. If, however, at any time prior to the expiration of the
Warrants or their exercise, any of the following events shall
occur:
(i) the Company shall issue any rights to
subscribe for shares of Common Stock or any other
securities of the Company to all of the shareholders of
the Company; or
(ii) a dissolution, liquidation or winding-up
of the Company (other than in connection with a
consolidation, merger or statutory share exchange) or a
sale of all or substantially all of its property,
assets and business as an entirety shall be approved by
the Company's Board of Directors; or
(iii) there shall be any reclassification or a
change in the kind of the outstanding shares of Common
Stock into different securities (other than a change in
the number of outstanding shares or a change in par
value to no par value, or from no par value to par
value) or consolidation, merger or statutory share
exchange of the Company with another entity;
then, in any one or more of said events, the Company shall give
written notice of such event on or before the date the Company
gives notice to its shareholders of such event. Such notice
shall specify the applicable record date or the date of closing
the transfer books, as the case may be, if any. Failure to give
such notice or any defect therein shall not affect the validity
of any action taken in connection with the event.
9. Registration Rights.
(a) Piggyback Registration. If, at any time
during the five (5) years beginning on the initial issuance date
of the Warrants represented by this Certificate, the Company
proposes to prepare and file any new registration statement under
the Securities Act covering the public sale of Common Stock of
the Company for cash (in any case, other than in connection with
an employee benefit plan, a dividend reinvestment plan or
pursuant to a registration statement on Forms S-4 or S-8 or any
successor form) (collectively, a "Registration Statement"), it
will give written notice by certified or registered mail, at
least thirty (30) days prior to the filing of each such
Registration Statement, to the Holder of its intention to do so.
If the Holder notifies the Company within fifteen (15) days after
receipt of any such notice of such Holder's desire to include in
such proposed Registration Statement any shares of Common Stock
(i) issued or issuable to the Holder upon exercise of the
Holder's Warrants, and (ii) that are owned by the Holder (the
"Registrable Shares") (which notice shall specify the number of
Registrable Shares owned by the Holder and the number intended to
be disposed of by the Holder), the Company shall use reasonable
efforts to include, to the extent possible, in such Registration
Statement the number of Registrable Shares which the Company has
been so requested to register by the Holder, at the Company's
sole cost and expense and at no cost or expense to the Holder,
except that the Holder shall pay (i) all underwriters' broker-
dealers', placement agents' and similar selling discounts,
commissions and fees relating to the Holder's Registrable Shares,
(ii) all registration and filing fees imposed under the
Securities Act, by any stock exchange or under applicable state
securities or blue sky laws based on the Holder's Registrable
Shares, (iii) all transfer, franchise, capital stock and other
taxes, if any applicable to the Holder's Registrable Shares, and
(iv) the costs and expenses of legal counsel, accountants or
other advisors retained by the Holder in excess of $15,000
(collectively, the "Holder's Expenses"), provided that;
(i) anything in this Section 9 to the contrary
notwithstanding, if the Company's securities so
registered for sale are to be distributed in an
underwritten offering and the managing underwriter
shall advise the Company that, in its opinion, the
amount of securities to be offered should be limited in
order to assure a successful offering, the amount of
Registrable Shares to be included in such Registration
Statement shall be so limited and shall be allocated
among the persons selling such securities in the
following order of priority: (A) first to be
registered will be the securities the Company proposes
to sell, (B) next to be registered will be the
securities subject to any demand registration rights
granted by the Company, (C) next to be registered will
be securities subject to any piggyback registration
rights granted by the Company before the initial
issuance date of the Warrants, and (D) next to be
registered will be the Registrable Shares and any other
shares of Common Stock subject to similar piggyback
registration rights granted by the Company in
proportion, as nearly as practicable, to the number of
shares of Common Stock desired and eligible to be sold
by each holder of such shares of Common Stock; and
(ii) anything in this Section 9 to the
contrary notwithstanding, the Company shall not be
required to include any of the Holder's Registrable
Shares in a registration statement if in the written
opinion of legal counsel to the Company upon which
Holder is authorized to rely the securities for which
registration is requested may be sold publicly without
limitation or restriction without registration under
the Securities Act; and
(iii) if the securities or blue sky laws of
any jurisdiction in which the securities so registered
are proposed to be offered would require the Holder's
payment of greater registration expenses than those
otherwise required by this Section 9 and if the Company
shall determine, in good faith, that the offering of
such securities in such jurisdiction is necessary for
the successful consummation of the registered offering,
then the Holder shall either agree to pay the portion
of the registration expenses required by the securities
or blue sky laws of such jurisdiction to be paid by the
Holder or withdraw its request for inclusion of its
Registrable Shares in such registration; and
(iv) notwithstanding the provisions of this
Section 9(a), the Company shall have the right at any
time and for any reason or for no reason after it shall
have given written notice pursuant to this paragraph
(irrespective of whether a written request for
inclusion of any such securities shall have been made)
to elect not to file any such proposed Registration
Statement, or to withdraw the same after the filing but
prior to the effective date thereof and, thereupon,
shall be relieved from its obligation to proceed with
such registration.
If a Holder's Registrable Shares are included in a
Registration Statement, the Holder shall furnish the Company in
writing with such appropriate documents and agreements,
including, without limitation, indemnification and contribution
agreements, as well as such appropriate information in connection
with the sale of such Shares, including, without limitation,
information about the Holder, the Registrable Shares and the
Holder's plan of distribution thereof, and other securities of
the Company owned by the Holder, as the Company shall reasonably
request or as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this
Agreement. In addition, if the offering is underwritten, the
Company shall have the exclusive right to select the underwriter.
The Holder shall execute and deliver all documents reasonably
requested by the Company and/or such underwriter and any other
documents customary in similar offerings, including, without
limitation, underwriting agreements, custody agreements, powers
of attorney, indemnification agreements, and agreements
restricting other sales of securities.
The rights and obligations under Sections 9(a) and
(b) shall terminate at the earlier of (i) five (5) years after
the initial issuance date of the Warrants, or (ii) the date all
of the Holder's Registrable Shares have been transferred by the
Holder, except for transfers in accordance with Section 5(b)
above.
(a) Covenants of the Company with Respect to
Registration. The Company covenants and agrees as follows:
(i) The Company shall pay all costs, fees and
expenses in connection with all Registration Statements
filed pursuant to paragraph (a) above, including,
without limitation, the Company's legal and accounting
fees, printing expenses, filing fees and other
expenses, except that the Holder shall pay all of the
Holder's Expenses (as defined in paragraph (a)).
(ii) The Company will use its reasonable
efforts to qualify or register the Registrable Shares
included in a Registration Statement for offering and
sale under the securities or blue sky laws of such
states of the United States as are reasonably
appropriate to the offering; provided, however, that
the Company shall not be required to (A) qualify or
register the Registrable Shares in any jurisdiction in
which the Company would be required to qualify as a
broker or dealer in securities under the securities or
blue sky laws of such jurisdictions, (B) qualify
generally to do business as a foreign corporation in
any jurisdiction wherein it is not already so
qualified, (C) subject itself to taxation in any such
jurisdiction, or (D) consent to general service of
process in any such jurisdiction.
10. Reservation and Listing of Securities.
(a) The Company covenants and agrees that at
all times during the period the Warrants are exercisable, the
Company shall reserve and keep available, free from preemptive
rights, out of its authorized and unissued shares of Common Stock
or out of its authorized and issued shares of Common Stock held
in its treasury, solely for the purpose of issuance upon exercise
of the Warrants, such number of Shares as shall be issuable upon
the exercise of the Warrants
(b) The Company covenants and agrees that,
upon exercise of the Warrants in accordance with their terms and
payment of the Purchase Price, all Shares issued or sold upon
such exercise shall not be subject to the preemptive rights of
any shareholder and when issued and delivered in accordance with
the terms of the Warrants shall be duly and validly issued, fully
paid and non-assessable, and the Holder shall receive good and
valid record title to such Shares free and clear from any adverse
claim (as defined in the applicable Uniform Commercial Code),
except such as have been created by the Holder.
11. Survival. All agreements, covenants,
representations and warranties herein shall survive the execution
and delivery of this Certificate and any investigation at any
time made by or on behalf of any party hereto and the exercise,
sale and purchase of the Warrants and the Shares (and any other
securities or properties) issuable on exercise hereof.
12. Registered Holder. The Company may deem and
treat the registered Holder hereof as the absolute owner of this
Certificate and the Warrants represented hereby (notwithstanding
any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise of the Warrants, of any
notice, and of any distribution to the Holder hereof, and for all
other purposes, and the Company shall not be affected by any
notice to the contrary.
13. Manner of Notices. All notices and other
communications from the Company to the Holders of the Warrants
represented by this Certificate shall be in writing and shall be
deemed to have been duly given if and when personally delivered,
two (2) business days after being sent by overnight courier or
ten (10) days after mailed by certified, registered or
international recorded mail, postage prepaid and return receipt
requested, or when transmitted by telefax, telex or telegraph and
confirmed by sending a similar mailed writing, if to the Holder,
to the last address of such Holder as it shall appear on the
books of the Company maintained at the Company's principal office
or to such other address as the Holder may have specified to the
Company in writing.
14. Headings. The headings contained herein are
for convenience of reference only and are not part of this
Certificate.
15. Governing Law. This Certificate shall be
deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by, and construed
in accordance with, the laws of said state, without regard to the
conflict of laws provisions thereof.
IN WITNESS WHEREOF, the Company has caused this
Certificate to be duly executed by its duly authorized officers.
Dated: _______________, 1999
XCL LTD.
By:__________________________________
Name: Marsden W. Miller, Jr.
Title: Chairman and Chief
Executive Officer
Attest:
___________________________
Secretary/Assistant Secretary
XCL LTD.
FORM OF ELECTION TO PURCHASE
(To be executed by the registered Holder
if such Holder desires to exercise Warrants)
The undersigned registered Holder hereby
irrevocably elects to exercise the right of purchase represented
by this Warrant Certificate for, and to purchase, ___________
Shares hereunder, and herewith tenders in payment for such Shares
cash, a wire transfer, a certified check or a banker's draft
payable to the order of XCL LTD. in the amount of
_____________________, all in accordance with the terms hereof.
The undersigned requests that a certificate for such Shares be
registered in the name of and delivered to:
(Please Print Name and Address)
and, if said number of Shares shall not be all the Shares
purchasable hereunder, that a new Warrant Certificate for the
balance remaining of the Shares purchasable hereunder be
registered in the name of the undersigned Warrant Holder or his
Assignee as below indicated and delivered to the address stated
below.
DATED:
Name of Warrant Holder:
(Please Print)
Address:
Signature:
Note: The above signature must correspond in all
respects with the name of the Holder as specified on the face of
this Warrant Certificate, without alteration or enlargement or
any change whatsoever, unless the Warrants represented by this
Warrant Certificate have been assigned.
XCL LTD.
FORM OF ASSIGNMENT
(To be executed by the registered Holder if such Holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers to:
_________________________________________________________________
(Please Print Name and Address of Transferee)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Warrants to purchase up to ________ Shares represented by this
Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________, Attorney, to transfer such Warrants on the
books of the Company, with full power of substitution in the
premises. The undersigned requests that if said number of Shares
shall not be all of the Shares purchasable under this Warrant
Certificate that a new Warrant Certificate for the balance
remaining of the Shares purchasable under this Warrant
Certificate be registered in the name of the undersigned Warrant
Holder and delivered to the registered address of said Warrant
Holder.
DATED:_______________
Signature of registered Holder:
_________________________________________
Note: The above signature must correspond in all
respects with the name of the Holder as specified on
the face of this Warrant Certificate, without
alteration or enlargement or any change whatsoever. The
above signature of the registered Holder must be
guaranteed by a commercial bank or trust company, by a
broker or dealer which is a member of the National
Association of Securities Dealers, Inc. or by a member
of a national securities exchange, The Securities and
Futures Authority Limited in the United Kingdom or The
London Stock Exchange Limited in London, England.
Notarized or witnessed signatures are not acceptable as
guaranteed signatures.
Signature Guaranteed:
_________________________________________
Authorized Officer
_________________________________________
Name of Institution