THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY OTHER SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE UNITED STATES UNLESS REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS
AVAILABLE. - THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE EXERCISED
BY OR ON BEHALF OF ANY U.S. PERSON UNLESS SUCH SECURITIES, AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THE COMMON STOCK PURCHASE WARRANTS ARE REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
WARRANTS TO PURCHASE SHARES OF No. _______
PENNACO ENERGY, INC.
Initial Issuance on _______ _______, 1998
Void after 5:00 p.m. Nevada Time, (six months from issuance)
THIS CERTIFIES THAT, for value received, ___________, or registered assigns
(the "Holder") is the registered holder of Warrants (the "Warrants") to
purchase from Pennaco Energy, Inc., a Nevada corporation (the "Company"),
at any time after the date of initial issuance and from time to time until
5:00 p.m., Nevada time, ________ (the "Expiration Date"), subject to the
conditions as set forth herein, at the initial exercise price of five
dollars ($5.00) (the "Exercise Price"), one (1) share offully paid and
non-assessable $.001 par value common stock of the Company (the "Shares"),
up to an aggregate of (a number equal to 50% of the number of Shares
purchased in the Offering) upon the terms and subject to the conditions set
forth herein upon surrender of this Certificate and payment of the Exercise
Price at the principal office of the Company. The number of Shares
purchasable upon exercise of the Warrants and the Exercise Price per share
shall be subject to adjustment from time to time as set forth herein. The
exercise of the Warrants is subject to compliance with the conditions set
forth herein under the heading "Compliance with U.S. Securities Laws."
1. EXERCISE OF WARRANTS.
(a) The exercise of any Warrants represented by this Certificate
is subject to the conditions set forth below in "Compliance with U.S. Securities
Laws."
(b) Subject to compliance with the conditions set forth below in
"Compliance with U.S. Securities Laws,"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 to the Company at
its principal office, of this Certificate together with the form of election to
purchase attached hereto duly completed and signed, and upon payment to the
Company of the aggregate Exercise Pricefor the number of Shares in respect of
which Warrants are then exercised
(c) No Warrant may be exercised after 5:00 p.m., Nevada time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
(d) Payment of the aggregate Exercise Price for the number of
Shares in respect of which Warrants are exercised shall be made in cash, or by
certified check or bank draft payable to the order of the Company, or any
combination of theforegoing,
(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 such number of unexercised Warrants.
(f) Upon surrender of this Certificate and payment of the
Exercise Price as aforesaid, the Company shall cause to be delivered with all
reasonable dispatch 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 of Common Stock 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 of Common Stock
and shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction down to the nearest whole number of
shares of Common Stock.
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 tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any Warrant or the delivery of any
Shares in any name other than that of the Holder, which transfer taxes shall be
paid by the Holder.
4. COMPLIANCE WITH U.S. SECURITIES LAWS. The Warrants and the
Shares issuable upon the exercise of the Warrants have not been registered under
the United States Securities Act of 1933, as amended (the "Act"), and may not be
offered, sold, or transferred unless registered under the Act or an exemption
from such registration is available. All Shares issued by the Company will bear
the following legend:
"The shares represented by this certificate have been acquiredfor investment and
have not been registered under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such registration or an exemption
therefrom under said Act."
5. TRANSFER OF WARRANTS. 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., or by a member of a national securities
exchange, The Toronto Stock Exchange, The Securities and Futures Authority
Limited in the United Kingdom, or The International Stock Exchange in London,
England. 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.
6. EXCHANGE AND RGPLACEMENT OF WARRANT CERTIFICATES, LOSS OF OR
MUTILATED WARRANT CERTIFICATES.
(a) This Certificate is exchangeable without expense, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Certificate 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 any
Certificate and, in case of such loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Certificate, if mutilated, the Company will make and deliver a new
Certificate of like tenor, in lieu thereof.
Page 2
7. EXERCISE PRICE, ADIUSTMENT OF EXERCISE PRICE AND NUMBER OF
SHARES.
(a) EXERCISE PRICE. The Warrants initially are exercisable at
the Exercise Price per Share, subject to adjustment from time to time as
provided herein.
(b) SUBDIVISION, COMBINATION, OR STOCK DIVIDEND. In the event
that the Company shall at any time subdivide or combine the outstanding shares
of Common Stock or increase the Shares of Common Stock outstanding by way of
dividend, the Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or stock dividend, or increased in the case of combination.
(c) ADIUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this paragraph 7, the number of
Shares issuable upon the exercise of each Warrant shall be adjusted to the
nearest full Share by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Shares issuable upon
exercise of the Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(d) RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In the event
of any reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or in the event of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
Holder shall thereafter have the right to convert into and to purchase the kind
and respective number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holder were the owner of the shares of Common Stock
underlying the Warrants immediately prior to any such events at a price equal to
the product of (x) the number of shares issuable upon exercise of the Warrants
and (y) the Equivalent per Share Exercise Price in effect immediately prior to
the record date for such reclassification, change, consolidation, merger, sale
or conveyance as if such Holder had exercised the Warrants.
8. RESERVATION 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 of Common Stock as shall be issuable upon
the exercise of the Warrants.
(b) The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Exercise Price therefor, all shares of Common Stock
issuable upon such exercise shall be duly and validly issued, fully paid and
non-assessable, and the Holder shall receive good and valid record title to such
shares of Common Stock, free and clear from all taxes with respect to the issue
or sale thereof and any claim, lien, security interest, mortgage, pledge, charge
or other encumbrance of any nature whatsoever, except as such as may have been
created by the Holder, and such shares of Common Stock shall not be subject to
the preemptive rights of any stockholder.
9. 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 Common Stock (and any
other securities or properties) issuable on exercise hereof.
Page 3
10. REGISTERED HOLDER. The Company may deem and treat the registered
Holder(s) hereof as the absolute owner(s) 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, and of
any distribution to the Holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
11. NOTICES. All notices and other communications from the Company
to the Holder of the Warrants represented by this Certificate shall be mailed by
first class registered or certified airmail, postage prepaid, to the last
address of such Holder as it shall appear on the books of the Company maintained
at the Company's principal office upon or to such other address as the Holder
may have specified to the Company in writing.
12. HEADINGS. The headings contained herein are for convenience of
reference only and are not part of this Warrant.
13. GOVERNING LAW. This Warrant shall be deemed to be a contract made
under the laws of the State of Nevada and for all purposes shall be construed in
accordance with the laws of said state.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its duly authorized officers.
Dated: ______________
PENNACO ENERGY, INC.
By:
-----------------------------
Paul M. Rady, President
Attest:
- ---------------------------------
Gregory V. Gibson, Secretary
Page 4
PENNACO ENERGY, INC
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by this Warrant Certificatefor, and to purchase ___________Shares
hereunder, and herewith tenders in payment for such Shares cash or a certified
check or bank draft payable to the order of PENNACO ENERGY, INC in the amount of
$___________ , all in accordance with the terms hereof. The undersigned
requests that a certificatefor such Shares be registered in the name of and
delivered to:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security Number
or other Identifying Number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 change whatever, unless the Warrants represented by this
Warrant Certificate have been assigned
IN CONNECTIO WITH THIS ELECTION TO PURCHASE, THE WARRANT HOLDER MUST DELIVER TO
THE COMPANY A WRITTEN OPINION OF UNITED STATES COUNSEL, IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE WARRANTS AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE ACT
OR ARE EXEMPT FROM REGISTRATION UNDER THE ACT.
Page 5
PENNACO ENERGY, INC
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 unto:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security Number
or Other Identifying Number of Transferee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________, Attorney, to
transfer the within Warrant Certificate on the books of the Company, with full
power of substitution in the premises.
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 change whatever. 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 Toronto Stock Exchange, The
Securities and Futures Authority Limited in the United Kingdom or The
International Stock Exchange in London, England. Notarized or
witnessed signatures are not acceptable as guaranteed signatures,
Signature Guaranteed:
- ------------------------------
Authorized Officer
- ------------------------------
Name of Institution
Page 6