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EXHIBIT 4.6
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THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN RELIANCE ON AN OPINION,
REASONABLY SATISFACTORY TO QUEEN SAND RESOURCES, INC. IN FORM AND SUBSTANCE, OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, THAT SUCH SALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON AN EXEMPTION FROM THE ACT AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
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WARRANT TO PURCHASE
28,066 SHARES
QUEEN SAND RESOURCES, INC.
Common Stock Purchase Warrant
Representing Right To Purchase Shares of
Common Stock
of
Queen Sand Resources, Inc.
FOR VALUE RECEIVED, QUEEN SAND RESOURCES, INC., a Delaware corporation
(the "Company"), hereby certifies that Joint Energy Development Investments
Limited Partnership, a Delaware limited partnership (the "Holder"), is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at any
time or from time to time during the Exercise Period (as hereinafter defined), a
total of 28,066 shares (as such number of shares may be adjusted pursuant to the
terms hereof, the "Warrant Shares") of Common Stock, par value $.0015 per share,
of the Company, at a price per share equal to the Exercise Price (as defined
below). This Warrant is issued to the Holder (together with such other warrants
as may be issued in exchange, transfer or replacement of this Warrant, the
"Warrants") pursuant to the Securities Purchase Agreement (as defined below) and
entitles the Holder to purchase the Warrant Shares and to exercise the other
rights, powers and privileges hereinafter provided.
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Section 1. Definitions. The following terms, as used herein, have the
following respective meanings:
"Common Stock" means the Company's common stock, $0.0015 par value.
"Company" is defined in the introductory paragraph of this Warrant.
"Date of Issuance" means March 9, 1998.
"Exercise Period" means the period of time between the Date of Issuance
and 5:00 p.m. (New York City time) on the Expiration Date.
"Exercise Price" means an amount, per share, equal to $5.000. The
Exercise Price shall be subject to adjustment, as set forth in Section 4.
"Expiration Date" means March 9, 1999.
"Holder" means Joint Energy Development Investments Limited Partnership
and its permitted assignees.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint-stock company, trust, limited
liability company, unincorporated organization or government or any agency or
political subdivision thereof.
"Required Holders" means the Holders of more than 50% of all Warrant
Shares then outstanding (assuming the full exercise of all Warrants).
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of March 27, 1997, between the Company and the Holder, as
such agreement shall be modified, amended and supplemented and in effect from
time to time.
"Value" means, as of any date of determination, with respect to the
Common Stock, $3.50 per share of Common Stock.
"Warrants" is defined in the introductory paragraph of this Warrant.
"Warrant Shares" is defined in the introductory paragraph of this
Warrant.
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Section 2. Exercise of Warrant; Cancellations of Warrant. This Warrant
may be exercised in whole or in part, at any time or from time to time, during
the Exercise Period, by presentation and surrender hereof to the Company at its
principal office at the address set forth in Section 10 (or at such other
reasonable address as the Company may after the date hereof notify the Holder in
writing, coming into effect not before 14 days after receipt of such notice by
the Holder), with the Purchase Form annexed hereto as Exhibit A duly executed
and accompanied by either (at the option of the Holder) proper payment in cash
or certified or bank check equal to the Exercise Price for the Warrant Shares
for which this Warrant is being exercised. Upon exercise of this Warrant as
aforesaid, the Company shall as promptly as practicable, and in any event within
20 days thereafter, execute and deliver to the Holder a certificate or
certificates for the total number of Warrant Shares for which this Warrant is
being exercised, in such names and denominations as requested in writing by the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. If this Warrant is
exercised in part only, the Company shall, upon surrender of this Warrant,
execute and deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of the Warrant Shares issuable hereunder.
Section 3. Exchange, Transfer, Assignment or Loss of Warrant. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company for other Warrants of different
denominations, entitling the Holder to purchase in the aggregate the same number
of Warrant Shares. The Holder of this Warrant shall be entitled, without
obtaining the consent of the Company, to transfer or assign its interest in (and
rights under) this Warrant in whole or in part to any Person or Persons. Upon
surrender of this Warrant to the Company, with the Assignment Form annexed
hereto as Exhibit B duly executed and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees named in such Assignment Form and, if
the Holder's entire interest is not being assigned, in the name of the Holder,
and this Warrant shall promptly be canceled. This Warrant may be divided or
combined with other Warrants that carry the same rights upon presentation hereof
at the office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification
(including, if required in the reasonable judgment of the Company, a statement
of net worth of such Holder that is at a level reasonably satisfactory to the
Company), and upon surrender and cancellation of this Warrant, if mutilated, the
Company shall execute and deliver a new Warrant of like tenor and date.
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Section 4. Antidilution Provisions.
(a) Adjustment of Number of Warrant Shares and Exercise Price.
The number of Warrant Shares purchasable pursuant hereto and
the Exercise Price, each shall be subject to adjustment from
time to time on and after the Date of Issuance as provided
in this Section 4(a). In case the Company shall at any time
after the Date of Issuance (i) pay a dividend of shares of
Common Stock or make a distribution of shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any
shares of its capital stock or other assets in a
reclassification or reorganization of the Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing entity), then (x) the securities purchasable
pursuant hereto shall be adjusted to the number of Warrant
Shares and amount of any other securities, cash or other
property of the Company which the Holder would have owned or
have been entitled to receive after the happening of any of
the events described above, had this Warrant been exercised
immediately prior to the happening of such event or any
record date with respect thereto, and (y) the Exercise Price
shall be adjusted to equal the Exercise Price immediately
prior to the adjustment multiplied by a fraction, (A) the
numerator of which is the number of Warrant Shares for which
this Warrant is exercisable immediately prior to the
adjustment, and (B) the denominator of which is the number
of shares for which this Warrant is exercisable immediately
after such adjustment. The adjustments made pursuant to this
Section 4(a) shall become effective immediately after the
effective date of the event creating such right of
adjustment, retroactive to the record date, if any, for such
event. Any Warrant Shares purchasable as a result of such
adjustment shall not be issued prior to the effective date
of such event.
For the purpose of this Section 4(a) and (b), the term
"shares of Common Stock" means (i) the classes of stock
designated as the Common Stock of the Company as of the date
hereof, or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares consisting
solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at
any time, as a result of an adjustment made pursuant to this
Section 4(a), the Holder shall become entitled to receive any
securities of the Company other than shares of Common Stock,
thereafter the number of such other securities so receivable upon
exercise of this Warrant shall be subject to
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adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Warrant Shares contained in this Section 4.
(b) Reorganization, Merger, etc. If any capital reorganization,
reclassification or similar transaction involving the
capital stock of the Company (other than as specified in
Section 4(a)), any consolidation, merger or business
combination of the Company with another corporation or the
sale or conveyance of all or any substantial part of its
assets to another corporation, shall be effected in such a
way that holders of the shares of Common Stock shall be
entitled to receive stock, securities or assets (including,
without limitation, cash) with respect to or in exchange for
shares of the Common Stock, then, prior to and as a
condition of such reorganization, reclassification, similar
transaction, consolidation, merger, business combination,
sale or conveyance, lawful and adequate provision shall be
made whereby the Holder 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
Warrant Shares immediately theretofore purchasable and
receivable upon the exercise of this Warrant, such shares of
stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding
Warrant Shares equal to the number of Warrant Shares
immediately theretofore purchasable and receivable upon the
exercise of this Warrant had such reorganization,
reclassification, similar transaction, consolidation,
merger, business combination, sale or conveyance not taken
place. The Company shall not effect any such consolidation,
merger, business combination, sale or conveyance unless
prior to or simultaneously with the consummation thereof the
survivor or 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 sent to the Holder, the obligation
to deliver to the Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the
Holder may be entitled to receive.
(c) Statement on Warrant Certificates. Irrespective of any
adjustments in the Exercise Price or the number or kind of
Warrant Shares, this Warrant may continue to express the
same price and number and kind of shares as are stated on
the front page hereof.
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(d) Exception to Adjustment. Anything herein to the contrary
notwithstanding, the Company shall not be required to make
any adjustment of the number of Warrant Shares issuable
hereunder or to the Exercise Price in the case of the
issuance of the Warrants or the issuance of shares of the
Common Stock (or other securities) upon exercise of the
Warrants.
(e) Treasury Shares. The number of shares of the Common Stock
outstanding at any time shall not include treasury shares or
shares owned or held by or for the account of the Company or
any of its subsidiaries, and the disposition of any such
shares shall be considered an issue or sale of the Common
Stock for the purposes of this Section 4.
(f) Adjustment Notices to Holder. Upon any increase or decrease
in the number of Warrant Shares purchasable upon the
exercise of this Warrant or the Exercise Price the Company
shall, within 30 days thereafter, deliver written notice
thereof to all Holders, which notice shall state the
increased or decreased number of Warrant Shares purchasable
upon the exercise of this Warrant and the adjusted Exercise
Price, setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are
based.
Section 5. Notification by the Company. In case at any time while this
Warrant remains outstanding:
(a) the Company shall declare any dividend or make any
distribution upon its Common Stock or any other class of its
capital stock; or
(b) the Company shall offer for subscription pro rata to the
holders of its Common Stock or any other class of its
capital stock any additional shares of stock of any class or
any other securities convertible into or exchangeable for
shares of stock or any rights or options to subscribe
thereto; or
(c) the Board of Directors of the Company shall authorize any
capital reorganization, reclassification or similar
transaction involving the capital stock of the Company, or a
sale or conveyance of all or a substantial part of the
assets of the Company, or a consolidation, merger or
business combination of the Company with another Person; or
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(d) actions or proceedings shall be authorized or commenced for
a 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 to
the Holder, at the earliest time legally practicable (and not less than 20 days
before any record date or other date set for definitive action) 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 options or (ii) such
reorganization, reclassification, sale, conveyance, consolidation, merger,
dissolution, liquidation or winding-up shall take place or be voted on by
shareholders of the Company, as the case may be. Such notice shall also specify
the date as of which the holders of the Common Stock of record shall participate
in said dividend, distribution, subscription rights or options or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, sale, conveyance,
consolidation, merger, dissolution, liquidation or winding-up, as the case may
be. If the action in question or the record date is subject to the effectiveness
of a registration statement under the Securities Act or to a favorable vote of
shareholders, the notice required by this Section 5 shall so state.
Section 6. No Voting Rights: Limitations of Liability. Prior to
exercise, this Warrant will not entitle the Holder to any voting rights or other
rights as a stockholder of the Company. No provision hereof, in the absence of
affirmative action by the Holder to exercise this Warrant, and no enumeration
herein of the rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of the Warrant Shares pursuant to
the exercise hereof.
Section 7. Amendment and Waiver.
(a) No failure or delay of the Holder in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right or power, or
any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise
have. The provisions of this Warrant may be amended,
modified or waived with (and only with) the written consent
of the Company and the Required Holders.
(b) No notice or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in
similar or other circumstances.
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Section 8. No Fractional Warrant Shares. The Company shall not be
required to issue stock certificates representing fractions of Warrant Shares,
but shall in respect of any fraction of a Warrant Share make a payment in cash
based on the Value of the Common Stock after giving effect to the full exercise
or conversion of the Warrants.
Section 9. Reservation of Warrant Shares. The Company shall authorize,
reserve and keep available at all times, free from preemptive rights, a
sufficient number of Warrant Shares to satisfy the requirements of this Warrant.
Section 10. Notices. Unless otherwise specified, whenever this Warrant
requires or permits any consent, approval, notice, request, or demand from one
party to another, that communication must be in writing (which may be by
telecopy) to be effective and is deemed to have been given (a) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly by telephone; but any requirement in this
parenthetical does not affect the date when the telecopy is deemed to have been
delivered), or (b) if by any other means, including by internationally
acceptable courier or hand delivery, when actually delivered. Until changed by
notice pursuant to this Warrant, the address (and telecopy number) for the
Holder and the Company are:
If to Holder: Joint Energy Development Investments Limited
Partnership
c/o Enron Corp.
1400 Smith Street
Houston, Texas 77002
Attn: Donna Lowry - Director, 28th Floor
Facsimile: (713) 646-3602
If to Company: Queen Sand Resources, Inc.
3500 Oak Lawn, Suite 380, L.B.#31
Dallas, Texas 75219-4398
Attn: Robert P. Lindsay
Facsimile: (214) 521-9960
With copies to: Queen Sand Resources, Inc.
30 Metcalfe Street
Suite 620
Ottawa, Ontario, Canada K1P 5L4
Attn: Edward J. Munden
Facsimile: (613) 230-6055
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Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
Attn: William L. Boeing, Esq.
Facsimile: (214) 651-5940
Section 11. Section and Other Headings. The headings contained in this
Warrant are for reference purposes only and will not affect in any way the
meaning or interpretation of this Warrant.
Section 12. Governing Law. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
Section 13. Binding Effect. The terms and provisions of this Warrant
shall inure to the benefit of the Holder and its successors and assigns and
shall be binding upon the Company and its successors and assigns, including,
without limitation, any Person succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.
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IN WITNESS WHEREOF, the seal of the Company and the signature of its
duly authorized officer have been affixed hereto as of July 22, 1998.
QUEEN SAND RESOURCES, INC.
Attest: /s/ V. ED BUTLER By: /s/ ROBERT P. LINDSAY
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V. Ed Butler Name: Robert P. Lindsay
Assistant Secretary Title: Chief Operating Officer and
Executive Vice President
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EXHIBIT A
TO
WARRANT
PURCHASE FORM
To Be Executed by the Holder
Desiring to Exercise a Warrant of
Queen Sand Resources, Inc.
The undersigned holder hereby exercises the right to purchase ______
shares of Common Stock covered by the within Warrant, according to the
conditions thereof, and herewith makes payment in full of the Exercise Price of
such shares, in the amount of $__________.
Name of Holder:
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Signature:
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Title:
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Address:
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Dated: ____________, _____
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EXHIBIT B
TO
WARRANT
ASSIGNMENT FORM
To Be Executed by the Holder
Desiring to Transfer a Warrant of
Queen Sand Resources, Inc.
FOR VALUE RECEIVED, the undersigned holder hereby sells, assigns and
transfers unto ________________________________________________________ the
right to purchase ______ shares of Common Stock covered by the within Warrant,
and does hereby irrevocably constitute and appoint _________________ Attorney to
transfer the said Warrant on the books of the Company (as defined in such
Warrant), with full power of substitution.
Name of Holder:
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Signature:
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Title:
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Address:
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Dated: _____________, ____
In the presence of
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NOTICE:
The signature to the foregoing Assignment Form must correspond to the name as
written upon the face of the within Warrant in every detail, without alteration
or enlargement or any change whatsoever.