VENUS EXPLORATION, INC.
COMMON STOCK PURCHASE WARRANT
VENUS EXPLORATION, INC., a Delaware corporation ("Venus Exploration"), hereby
certifies that for value received the registered owner hereof or its registered
assigns (collectively, the "Holder") is entitled, subject to the terms and
conditions set forth below, to purchase from Venus Exploration up to _______
shares of Common Stock of Venus Exploration, Inc. (the "Common Stock"),
exercisable at any time until the expiration date set forth below, at the
purchase price set forth below (the "Purchase Price"). As used herein, "Warrant"
means and includes this Warrant and any purchase warrant of Venus Exploration
hereafter issued in substitution for or to replace this Warrant or to evidence
the continuing effect of this Warrant after any partial exercise hereof.
Registered Owner: ___________________________________________________________
Purchase Price (until 2:00 p.m. Central Time, May 30, 2007): 40 cents ($0.40)
per share.
Expiration Date: 2:00 p.m. Central Time, May 30, 2007, unless sooner
terminated pursuant to this Warrant.
1. Exercise.
1.1 Manner. This Warrant may be exercised in whole or in part, from time to
time, by the Holder by delivering this Warrant, together with a Subscription in
the form appearing as Exhibit "1" hereto properly completed and duly executed by
or on behalf of the Holder, to the principal offices of Venus Exploration or
Venus Exploration's transfer agent accompanied by payment in cash or by
certified or bank check, payable to the order of Venus Exploration in an amount
equal to the Purchase Price (as then adjusted) multiplied by the number of
shares of Common Stock as to which this Warrant is then being exercised. Holder
also agrees to provide such documentation as Venus Exploration may reasonably
request in order to determine that such shares of Common Stock may be issued in
compliance with applicable federal and state securities laws.
1.2 Certificates. Venus Exploration will, or will direct its transfer agent
to, issue, and reissue, as applicable, as soon as practicable after any exercise
of this Warrant, and in any event within ten days thereafter, at Venus
Exploration's expense, in the name or names of the Holder and deliver to the
Holder, or as the Holder may direct (on payment by the Holder of any applicable
transfer taxes and compliance with Section 5 hereof), certificates for the
number of fully paid and nonassessable shares of Common Stock as to which this
Warrant is so exercised.
1.3 Date of Issuance or Reissuance. Notwithstanding Section 1.2, any shares of
Common Stock as to which this Warrant is exercised shall be deemed issued or
reissued, as applicable, on and as of the date of such exercise, and the Holder
or the person or persons designated by the Holder as therein provided shall
thereupon be deemed to be the owner or owners of record thereof.
1.4 Fractional Shares of Common Stock. No fractional shares of Common Stock or
scrip representing fractional shares of Common Stock shall be issued upon the
exercise of this Warrant. With respect to any fraction of a share of Common
Stock called for upon any such exercise hereof, Venus Exploration shall pay to
the Holder an amount in cash equal to such fraction multiplied by the current
market value of a share of Common Stock, determined as follows:
(a) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange, the current value
shall be the last reported sale price of the Common Stock on such exchange on
the last business day prior to the date of exercise of this Warrant, if no such
sale is made on such day, the average closing bid and asked prices for such day
on such exchange; or
(b) If the Common Stock is not listed or admitted to unlisted trading
privileges, the current value shall be the last reported sale price (or prices,
if applicable) or the mean of the last reported bid and asked prices reported on
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") (or, if not so quoted on NASDAQ, by the National Quotation Bureau,
Inc.) on the last business day prior to the date of the exercise of this
Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted trading
privileges and prices are not reported on NASDAQ, the current value shall be an
amount, not less than the book value, determined in such reasonable manner as
may be prescribed by the Board of Directors of Venus Exploration.
2. Adjustments.
2.1 Common Stock Defined. Whenever reference is made in this Warrant to the
issue or sale of Common Stock, the term "Common Stock" shall mean the Common
Stock of Venus Exploration.
2.2 Stock Dividends, Splits, Etc. The number of securities purchasable on
exercise of this Warrant and the Purchase Price shall be subject to adjustment
from time to time in the event that Venus Exploration shall (a) pay a dividend
in, or make a distribution of, shares of Common Stock (or securities convertible
into, exchangeable for or otherwise entitling a holder thereof to receive Common
Stock) on its outstanding Common Stock, (b) declare a dividend payable in cash
on its Common Stock and at substantially the same time shall offer to its
shareholders, at a price below the then fair market value of the Common Stock, a
right to purchase new Common Stock (or securities convertible into, exchangeable
for or otherwise entitling a holder thereof to receive Common Stock) from the
proceeds of such dividend (for the purpose of this Warrant all Common Stock so
issued on exercise of such right shall be deemed to have been issued as a stock
dividend), (c) subdivide its outstanding shares of Common Stock into a greater
number of shares, (d) combine its outstanding shares of Common Stock into a
smaller number of shares or (e) spin-off a subsidiary by distributing, as a
dividend or otherwise, shares of the subsidiary to its shareholders. In any such
case, the total number of shares and the number of shares or other units of such
other securities purchasable on exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive, at
the same aggregate purchase price, the number of shares of Common Stock and the
number of shares or other units of such other securities which the Holder would
have owned or would have been entitled to receive immediately following the
occurrence of any of the events described above had this Warrant been exercised
in full immediately prior to the occurrence (or applicable record date) of such
event. An adjustment made pursuant to this subsection 2.2 shall, in the case of
a stock dividend or distribution, be made as of the record date therefor and, in
the case of a subdivision or combination, be made as of the effective date
thereof. If, as a result of any adjustment pursuant to this subsection 2.2, the
Holder shall become entitled to receive shares of two or more classes or series
of securities of Venus Exploration, the Board of Directors of Venus Exploration
shall equitably determine the allocation of the adjusted Purchase Price between
or among shares or other units of such classes or series and shall notify the
Holder of such allocation.
2.3 Reorganization, Recapitalization, Consolidation, Merger or Sale of Assets.
In the event of any reorganization or recapitalization of Venus Exploration or
in the event Venus Exploration consolidates with or merges into another entity
or transfers all or substantially all of its assets to another entity, then and
in each such event, the Holder on exercise of this Warrant as provided herein,
at any time after the consummation of such reorganization, recapitalization,
consolidation, merger or transfer, shall be entitled, and the documents executed
to effectuate such event shall so provide, to receive the stock or other
securities or property to which the Holder would have been entitled on such
consummation if the Holder had exercised this Warrant immediately prior thereto.
In such case, the terms of this Warrant shall survive the consummation of any
such reorganization, recapitalization, consolidation, merger or transfer and
shall be applicable to the shares of stock or other securities or property
receivable on the exercise of this Warrant after such consummation.
2.4 Officer's Certificate. Whenever the number of Shares shall be adjusted as
required herein, Venus Exploration shall forthwith file in the custody of its
Secretary at its principal office and with its transfer agent, an officer's
certificate showing the adjusted number of shares of Common Stock determined as
herein provided and setting forth in detail the facts requiring such adjustment.
Each such officer's certificate shall be made available at all reasonable times
for inspection by the Holder and Venus Exploration shall, forthwith after each
such adjustment, deliver a copy of such certificate to the Holder.
2.5 Further Assurances; Duty to Make Fair Adjustments. Venus Exploration will
not, by voluntary action or inaction, avoid or seek to avoid the performance of
any of the terms of this Warrant, whether by amendment of Venus Exploration's
certificate or articles of incorporation, or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action or inaction, but
will at all times in good faith take all necessary action to carry out the
intent of all such terms. Without limiting the generality of the foregoing, (a)
Venus Exploration will not create any par value, or increase the par value, of
any shares receivable on exercise of this Warrant above the amount payable
therefor on such exercise, (b) Venus Exploration will take all such action as
may be necessary or appropriate so that Venus Exploration will validly and
legally issue or reissue, as applicable, fully paid and nonassessable shares of
Common Stock (or other securities or property deliverable hereunder) on the
exercise of this Warrant, and (c) Venus Exploration will not transfer all or
substantially all of its assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into Venus Exploration (if Venus Exploration is not
the surviving person), unless Section 2.3 shall have been satisfied. If any
event occurs as to which the other provisions of this Warrant are not strictly
applicable or if strictly applicable would not fairly protect the purchase
rights of the Warrant in accordance with the essential intent and principles of
such provisions, then the Board of Directors of Venus Exploration, on behalf of
Venus Exploration, shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, in order to
protect such purchase rights. This Warrant shall bind the successors and assigns
of Venus Exploration.
3. Replacement of Warrant. On receipt of evidence reasonably satisfactory to
Venus Exploration of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any loss, theft or destruction, on delivery of a bond or
other indemnity reasonably satisfactory to Venus Exploration, or, in the case of
any mutilation, on surrender and cancellation of this Warrant, Venus Exploration
shall issue a new Warrant, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant.
4. Transfers. Venus Exploration shall keep or cause to be kept a register of
the Holders of the Warrants (the "Warrant Register"). Prior to due presentment
of this Warrant for transfer or exercise Venus Exploration shall treat the
Holder in whose name or names this Warrant is registered as the absolute owner
or owners hereof for all purposes. In the event of any transfer, Venus
Exploration shall, or shall cause its agent to, register the transfer or
assignment on its Warrant Register on surrender of this Warrant, duly endorsed,
or accompanied by a written instrument or instruments of transfer in form
reasonably satisfactory to Venus Exploration, duly executed by the Holder or its
attorney-in-fact. On any such registration of transfer, Venus Exploration shall
issue a new Warrant or Warrants, of like tenor in the Holder's name, in lieu of
the transferred or assigned Warrant. In no event, however, will Venus
Exploration be required to effect any registration of transfer, assignment or
exchange that would result in the issuance of a fraction of a share. Any action
by Venus Exploration required under this Section 5 shall be at the expense of
Venus Exploration.
5. Reservation of Common Stock. Venus Exploration shall at all times reserve,
for the purpose of issuance or reissuance, as applicable, on exercise of this
Warrant, such number of its duly authorized and unissued shares of Common Stock
or such class or classes of capital stock or other securities as shall from time
to time be sufficient to comply with the Warrant, and Venus Exploration shall
take such corporate action as may in the opinion of its counsel be necessary to
increase its authorized and unissued shares of Common Stock or such other class
or classes of capital stock or other securities to such number as shall be
sufficient for that purpose.
6. Shareholder Rights. This Warrant shall not entitle the Holder, as such,
to any voting rights or other rights as a shareholder of Venus Exploration, or
to any other rights except the rights stated herein.
7. Survival. All agreements, covenants, representations and warranties herein
shall survive the execution and delivery of this Warrant and any investigation
at any time made by or on behalf of any party hereto and the exercise, sale and
purchase of this Warrant (and any other securities or property) issuable on
exercise hereof.
8. Remedies. Venus Exploration agrees that the remedies at law of the Holder,
in the event of any default or threatened default by Venus Exploration in the
performance of or compliance with any of the terms of this Warrant, may not be
adequate and such terms may, in addition to and not in lieu of any other remedy,
be specifically enforced by a decree of specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
9. Notices. All demands, notices, consents and other communications to be
given hereunder shall be in writing and shall be deemed duly given when
delivered personally or five days after being mailed by first class mail,
postage prepaid, properly addressed, if to Venus Exploration, at the following
addresses: 1250 NE Loop 410, Suite 810, San Antonio, Texas 78209, and if to
Holder, at the address of Holder appearing in the records of Venus Exploration.
Venus Exploration or the Holder may change such address at any time or times by
notice hereunder to the other.
10. Amendments; Waivers; Terminations; Governing Law; Headings. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant shall be
governed by and construed and interpreted in accordance with the laws of the
State of Texas. The headings in this Warrant are for convenience of reference
only and are not part of this Warrant.
DATED: _______.
Venus Exploration, Inc., a Delaware corporation
By: __________________________
John Y. Ames, President
EXHIBIT "1"
SUBSCRIPTION
(To be completed and signed only upon an exercise of the Warrant in whole or in
part)
To: Venus Exploration, Inc.:
The undersigned, the Holder of the attached Warrant, hereby irrevocably elects
to exercise the purchase right represented by the Warrant for, and to purchase
thereunder, _______ shares of Common Stock of _______, Inc. (or other securities
or property) of those to which such Holder is entitled thereunder, and herewith
makes payment of $_______ therefor in cash or by certified or official bank
check. The undersigned hereby requests that the Certificate(s) for such shares
be issued in the name(s) and delivered to the address(es) as follows:
Name: _______________________________________________________________________
Address: ____________________________________________________________________
Deliver To: _________________________________________________________________
Address: ____________________________________________________________________
If the foregoing Subscription evidences an exercise of the Warrant to purchase
fewer than all of the shares of Common Stock (or other securities or property)
to which the undersigned is entitled under such Warrant, please issue a new
warrant, of like tenor, for the remaining shares of Common Stock (or other
securities or property) in the name(s) and deliver the same to the address(es),
as follows:
Name: _______________________________________________________________________
Address: ____________________________________________________________________
DATED: _______, 20__
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[Name of Holder]
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[Signature of Holder or Authorized Signatory]
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[Social Security or Taxpayer Identification Number of Holder]