SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act
of 1934
Date of Report (date of earliest event reported): June 30, 1995
Mallon Resources Corporation
(exact name of registrant as specified in its charter)
Colorado 0-17267 84-1095959
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
999 18th Street, Suite 1700, Denver, Colorado 80202
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (303) 293-2333
not applicable
(former name or former address, if changed since last report)
Item 5. Other Events
On June 30, 1995, Laguna Gold Company ("Laguna"), a subsidiary of
Mallon Resources Corporation (the "Company"), completed the private
placement (the "Placement") of 25,000 shares of its new Series A
Convertible Preferred Stock, $0.01 par value per share (the "Series A
Stock"). Gross proceeds from the Placement were $2.5 million. The
Series A Stock bears no dividends, but has a preference upon
liquidation and is convertible into shares of Laguna's common stock
equal to a 20% equity stake in Laguna. All of the terms of the Series
A Stock are set forth in the Articles of Amendment to the Articles of
Incorporation of Laguna Gold Company by which the Series A Stock was
created, a copy of which is included as an Exhibit to this Periodic
Report on Form 8-K and is hereby incorporated by reference as a part
of this Report.
Also, as a part of the Placement, the Company (not Laguna) issued to
the investors five-year warrants to purchase an aggregate of 250,000
shares of the Company's $0.01 par value per share Common Stock for an
exercise price of $2.50 per share (the "Warrants"). The terms of the
Warrants are set forth in the Form of Warrant that is included as an
Exhibit to this Periodic Report on Form 8-K and is hereby incorporated
by reference as a part of this Report.
Net proceeds from the Placement will be used to acquire a core drill
and drill confirmation and exploration holes in and near the pit of
Laguna's Rio Chiquito gold mine in Costa Rica. Funds will also be
dedicated to the preparation of a feasibility study relating to the
commercial development of Rio Chiquito.
Carl H. Pforzheimer & Co., New York, provided investment banking
advice to the Company in connection with the Placement. Francis J.
Reinhardt, Jr., a member of the Company's Board of Directors, is a
partner in Carl H. Pforzheimer & Co.
The Placement was not registered under Section 5 of the Securities Act
of 1933 in reliance on the provisions of Section 4(2) of that Act, and
Regulation D promulgated thereunder.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
3.05 Laguna Gold Company Article 2.01.01 -- Series A Convertible
Preferred Stock
3.06 Form of Stock Purchase Warrant
Signatures
Pursuant to the requirements of the Securities Exchange act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Mallon Resources Corporation
July 12, 1995
_________________________________
Roy K. Ross, Executive Vice President
Articles of Amendment to the Articles of Incorporation of
Laguna Gold Company
Pursuant to the provisions of Section 7-106-102 of the Colorado
Business Corporation Act, the undersigned hereby submits the following
Articles of Amendment to the Articles of Incorporation of Laguna Gold
Company (the "Corporation"):
Article A The name of the Corporation is Laguna Gold Company.
Article B The following amendment to the Corporation's Articles of
Incorporation was duly adopted by the Board of Directors on June 30,
1995, pursuant to the provisions of Section 7-106-102 of the Colorado
Business Corporation Act, and in accordance with authority vested in
them pursuant to Article 2.01 of the Corporation's Articles of
Incorporation, which authorize the issuance of up to 1,000,000 shares
of the Corporation's preferred stock, par value $0.01 per share:
RESOLVED that, pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of the
Corporation's Articles of Incorporation, this Board of Directors
hereby establishes Article 2.01.01 to the Corporation's Articles of
Incorporation and thereby creates a series of the Corporation's
preferred stock, $0.01 par value, and hereby fixes the designations,
preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications,
limitations or restrictions thereof (in addition to the designations,
preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof,
set forth in the Corporation's Articles of Incorporation, as and when
amended, which are applicable to preferred stock of all series) as
follows:
Article 2.01.01 Series A Convertible Preferred Stock
Of the 1,000,000 shares of Preferred Stock authorized for
issuance by this Corporation, 25,000 shares shall be designated
"Series A Convertible Preferred Stock." The rights, preferences,
restrictions and other matters relating to the Series A Convertible
Preferred Stock shall be as follows:
1. Definitions. For the purposes hereof, the following
definitions shall apply:
"Board of Directors" means the duly elected Board of
Directors of the Corporation, as it may be reconstituted, from time to
time.
"Common Stock" means the Corporation's common stock, $0.01
par value per share.
"Converted Basis" shall mean, at any time, the number of
shares of Common Stock into which an outstanding share of Series A
Convertible Preferred Stock may then be converted.
"Conversion Price" shall mean $1.00 per share prior to any
adjustment pursuant to section 4 and, thereafter, shall be as last
adjusted and then in effect pursuant to section 4.
"Excluded Stock" means (a) shares of Common Stock issued
upon conversion of Preferred Stock; and (b) options (and shares of
Common Stock issued upon exercise thereof) issued to employees,
directors or consultants pursuant to a stock option plan or other
arrangement approved by the Board of Directors, including currently
outstanding options issued to employees, directors or consultants as
the same may be amended upon approval of the Board of Directors and
options issued in substitution therefor.
"Forced Conversion Distribution" means a public distribution
of shares of Common Stock meeting all of the following criteria: (A)
after such distribution, the Common Stock is authorized or listed for
trading on a national securities exchange, on an international
securities exchange, or in a recognized over-the-counter market, (B)
in such distribution gross proceeds per share for the Common Stock
were equal to or greater than 110% of the then effective Conversion
Price, and (C) the number of shares of Common Stock issued in such
distribution represented not less than a 20% equity interest in the
Corporation.
"Forced Conversion Merger" means any consolidation or merger
of the Corporation into another corporation or corporations in which,
for purposes of determining conversion rates, shares of the Common
Stock are valued, in the good faith determination of a majority of the
Board of Directors, at a value of not less than 110% of the then
current Conversion Price of the Series A Convertible Preferred Stock.
"Initial Liquidation Value" means $100.00 per share of
Series A Convertible Preferred Stock.
"Junior Securities" means (i) the Common Stock and any other
equity security of any kind that the Corporation at any time issues or
is authorized to issue junior in liquidation or payment to the Series
A Convertible Preferred Stock; and (ii) all monetary obligations,
debts and accounts payable of the Corporation to Mallon Resources
Corporation that arose prior to June 1, 1995.
"Liquidating Event" means (i) any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary,
(ii) the sale or transfer by the Corporation of all or substantially
all of its assets, or (iii) any consolidation or merger of the
Corporation into another corporation or corporations, except in the
case of (A) a merger or consolidation in which the Corporation is the
surviving corporation, or (B) a Forced Conversion Merger.
"Original Issue Date" means the date on which the first
share of Series A Convertible Preferred Stock is originally issued.
"Participating Holder" means a holder of shares of Series A
Convertible Preferred Stock that elects to participate in a
distribution under Section 7 of this Statement of Designations.
"Preferred Stock" means the Series A Convertible Preferred
Stock.
"Purchase Rights" means any options, convertible securities
or rights to purchase stock, warrants, securities or other property of
the Corporation.
"Series A Convertible Preferred Stock" means the
Corporation's Series A Convertible Preferred Stock, $0.01 par value
per share.
"Voting Power" of any class of securities of the Corporation
means the total number of votes holders of such securities would be
entitled to cast at a meeting of shareholders or otherwise at which
they are entitled to vote.
2. Dividend Provisions. The holders of Series A Convertible
Preferred Stock shall be entitled to receive any dividends other
distributions, whether in cash, property or otherwise, except to the
extent such dividends or distributions are declared and paid on the
Common Stock. If the Board of Directors shall declare dividends or
make other distributions, whether in cash, property or otherwise
(other than dividends payable in shares of capital stock of the class
or series upon which such dividends are declared or paid) on any
Common Stock, such dividends shall also be declared and paid or such
distributions also made to the holders of Series A Convertible
Preferred Stock on a Converted Basis.
3. Liquidation Preference. Upon the occurrence of any
Liquidating Event, each holder of shares of Series A Convertible
Preferred Stock shall be entitled, before any distribution or payment
is made upon any Junior Security, to be paid out of the assets of the
Corporation available for distribution to its shareholders an amount
in cash equal to the Initial Liquidation Value per share. If upon any
such Liquidating Event, the assets of the Corporation to be
distributed among the holders of shares of Series A Convertible
Preferred Stock shall be insufficient to permit payment to such
holders of the aggregate amount that such holders are then entitled to
be paid, then the entire assets of the Corporation to be distributed
shall be distributed ratably among such holders so that an equal
amount is received with respect to each share of Series A Convertible
Preferred Stock. After the payment or the setting apart of payment to
the holders of the Series A Convertible Preferred Stock of the
preferential amounts payable to them upon a Liquidating Event, the
holders of Common Stock and any other Junior Security shall be
entitled to receive the remaining assets of the Corporation, if any.
The Corporation will mail written notice of any Liquidating Event, not
less than 30 days prior to the date of such Event, to each holder of
shares of the Series A Convertible Preferred Stock.
4. Conversion. (a) (i) The holder of any shares of Series A
Convertible Preferred Stock shall have the right, at any time, to
convert all or any portion of such holder's shares of Series A
Convertible Preferred Stock into such number of fully paid and
nonassessable shares of Common Stock as is equal to the quotient
obtained by dividing (A) the aggregate Initial Liquidation Value of
the shares of Series A Convertible Preferred Stock being converted by
(B) the Conversion Price then in effect, by surrender of the
certificates representing the shares of Series A Convertible Preferred
Stock so to be converted in the manner provided in section 4(b)
hereof.
(ii) Each share of Series A Convertible Preferred
Stock shall automatically be converted into shares of Common Stock at
the Conversion Price at the time in effect for the Series A
Convertible Preferred Stock (A) immediately upon the completion by the
Corporation of a Forced Conversion Distribution, or (B) immediately
prior to the consummation of a Forced Conversion Merger.
(b) The holder of any shares of Series A Convertible
Preferred Stock may exercise the conversion right pursuant to section
4(a)(i) by delivering to the Corporation during regular business hours
at the office of any transfer agent of the Corporation for the Series
A Convertible Preferred Stock, or at such other place as may be
designated by the Corporation, the certificate or certificates for the
shares to be converted, duly endorsed or assigned in blank to the
Corporation, accompanied by written notice stating that such holder
elects to convert such shares and stating the name or names (with
address and tax identification numbers) in which the certificate or
certificates for the shares of Common Stock are to be issued.
Issuance of certificates for shares of Common Stock in a name other
than the holder shall be permitted only upon compliance with
applicable federal and state securities laws. As promptly as
practicable thereafter, the Corporation shall issue and deliver to the
holder, or upon the written order of such holder, to the place
designated by such holder, a certificate or certificates for the full
number of shares of Common Stock to which such holder is entitled and
a check or cash in respect of any interest in a fractional share of
Common Stock, as provided in section 4(c), payable with respect to the
shares of Series A Convertible Preferred Stock so converted. The
person in whose names the certificate or certificates for Common Stock
are to be issued shall be deemed to have become a shareholder of
record on the next succeeding date on which the transfer books are
open, but the Conversion Price shall be that in effect on the
Conversion Date. Upon conversion of only a portion of the number of
shares covered by a certificate representing shares of Series A
Convertible Preferred Stock surrendered for conversion, the
Corporation shall issue and deliver to or upon the written order of
the holder of the certificate so surrendered for conversion, at the
expense of the Corporation, a new certificate covering the number of
shares of Series A Convertible Preferred Stock representing the
unconverted portion of the certificate so surrendered.
(c) Fractional shares of Common Stock shall not be issued
upon conversion of shares of Series A Convertible Preferred Stock.
The number of shares of Common Stock issuable upon conversion thereof
shall be computed using the aggregate number of shares of Series A
Convertible Preferred Stock so surrendered. Instead of issuing
fractional shares of Common Stock that would otherwise be issuable
upon conversion of shares of Series A Convertible Preferred Stock, the
Corporation shall round down to the next share and shall pay to the
holder an amount equal to the Conversion Price times the fraction of a
share lost in rounding.
(d) The Conversion Price shall be subject to adjustment
from time to time as follows:
(i) If the Corporation shall at any time or from time
to time after the Original Issue Date, issue any shares of Common
Stock, or preferred stock, warrants, options, rights, or other
securities convertible into or exchangeable or exercisable for shares
of Common Stock, in each case other than Excluded Shares and Purchase
Rights, without consideration or for a consideration per share less
than the prevailing Conversion Price, then, the Conversion Price in
effect immediately prior to each such issuance shall forthwith be
adjusted to a price equal to the Conversion Price in effect
immediately prior to such issuance multiplied by a fraction the
numerator of which shall be the sum of (A) the total number of shares
of Common Stock outstanding (including any shares of Common Stock
deemed to have been issued pursuant to section 4(d)(ii)(C) and any
shares of Excluded Stock, all of which shall be deemed to have been
issued (including, but not limited to, the shares of Common Stock
issuable upon conversion of the Preferred Stock)) immediately prior to
such issuance multiplied by the Conversion Price in effect immediately
prior to such issuance, plus (B) the consideration received by the
Corporation upon such issuance, and the denominator of which shall be
the total number of shares of Common Stock outstanding (including any
shares of Common Stock deemed to have been issued pursuant to section
4(d)(ii)(C) and any shares of Excluded Stock, all of which shall be
deemed to have been issued (including, but not limited to, the shares
of Common Stock issuable upon conversion of the Preferred Stock))
immediately after such issuance multiplied by the Conversion Price in
effect immediately prior to such issuance.
(ii) For the purposes of any adjustment of the
Conversion Price pursuant to clause (i), the following provisions
shall be applicable:
(A) In the case of the issuance of Common Stock
for cash, the consideration shall be deemed to be the amount of cash
received by the Corporation therefor,
(B) In the case of the issuance of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the "fair value"
of such consideration as determined in the good faith judgment of the
Board of Directors,
(C) In the case of the issuance of (x) options to
purchase or rights to subscribe for Common Stock, (y) securities by
their terms convertible into or exchangeable for Common Stock or (z)
options to purchase or rights to subscribe for such convertible or
exchangeable securities:
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such options to purchase
or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner
provided in section 4(d)(ii)(A) and (B) above), if any, received by
the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the
Common Stock covered thereby;
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities or upon the exercise of
options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof
shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration
equal to the consideration received by the Corporation for any such
securities and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends), plus the
additional consideration, if any, to be received by the Corporation
upon the conversion or exchange of such securities or the exercise of
any related options or rights (the consideration in each case to be
determined in the manner provided in section 4(d)(ii)(A) and (B)
above);
(3) on any change in the number of shares or
exercise price of Common Stock deliverable upon exercise of any such
options or rights or conversions of or exchange for such convertible
or exchangeable securities, other than a change resulting from the
anti-dilution provisions thereof, the Conversion Price shall forthwith
be readjusted to such Conversion Price as would have obtained had the
adjustment made upon the issuance of such options, rights or
securities not converted prior to such change been made upon the basis
of such change; and
(4) on the expiration of any such options or
rights, the termination of any such rights to convert or exchange or
the expiration of any options or rights related to such convertible or
exchangeable securities, the Conversion Price shall forthwith be
readjusted to such Conversion Price as would have obtained had such
options, rights, securities or options or rights related to such
securities not been issued.
(iii) If the number of shares of Common Stock
outstanding at any time after the Original Issue Date is increased by
a stock dividend payable in shares of Common Stock or by a subdivision
or split-up of shares of Common Stock then, following the record date
fixed for the determination of holders of Common Stock entitled to
receive such stock dividend, subdivision or split-up, such Conversion
Price shall be appropriately decreased so that the number of shares of
Common Stock issuable on conversion of each share of Series A Stock
shall be increased in proportion to such increase in outstanding
shares.
(iv) If, at any time after the Original Issue Date,
the number of shares of Common Stock outstanding is decreased by a
combination of the outstanding shares of Common Stock, then, following
the record date for such combination, the Conversion Price shall be
appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Convertible Preferred
Stock shall be decreased in proportion to such decrease in outstanding
shares.
(v) In case, at any time after the Original Issue
Date, of any capital reorganization, or any reclassification of the
capital stock of the Corporation (other than a change in par value or
from par value to no par value or from no par value to par value or as
a result of a stock dividend or subdivision, split-up or combination
of shares), each share of Series A Convertible Preferred Stock shall
after such reorganization or reclassification be convertible into the
kind and number of shares of stock or other securities or property of
the Corporation or of the Corporation resulting from such
consolidation or surviving such merger or to which such properties and
assets shall have been sold or otherwise disposed to which the holder
of the number of shares of Common Stock deliverable (immediately prior
to the time of such reorganization reclassification, consolidation,
merger, sale or other disposition) upon conversion of such share of
Series A Convertible Preferred Stock would have been entitled upon
such reorganization, reclassification, consolidation, merger, sale or
other disposition. The provisions of this clause (v) shall similarly
apply to successive reorganizations or reclassifications.
(vi) All calculations under this section 4(d) shall be
made to the nearest cent.
(vii) In any case in which the provisions of this
section 4(d) shall require that an adjustment shall become effective
after a record date for an event, the Corporation may, until the
occurrence of such event, defer (x) issuing to the holder of any share
of Series A Convertible Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of
capital stock issuable upon such conversion before giving effect to
such adjustment and (y) paying to such holder any amount in cash in
lieu of a fractional share of capital stock pursuant to section 4(c)
above, so long as the Corporation shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to
receive such additional shares, and such cash, upon the occurrence of
the event requiring such adjustment.
(e) Whenever the Conversion Price shall be adjusted as
provided in section 4(d) above, the Corporation shall forthwith file,
at the office of the transfer agent for the Series A Convertible
Preferred Stock or at such other place as may be designated by the
Corporation, a statement, signed by its President or Chief Financial
Officer and by its Treasurer, showing in detail the facts requiring
such adjustment, the method of calculation and the Conversion Price
that shall be in effect after such adjustment. The Corporation shall
also cause a copy of such statement to be sent by first-class,
certified mail, return receipt requested, postage prepaid, to each
holder of shares of Series A Convertible Preferred Stock at such
holder's address appearing on the Corporation's records. Where
appropriate, such copy may be given in advance and may be included as
part of a notice required to be mailed under the provisions of section
4(f) below.
(f) If the Corporation shall propose to take any action of
the types described in clauses (i), (ii), (iii), (iv), or (v) of
section 4(d) above, the Corporation shall give notice to each holder
of shares of Series A Convertible Preferred Stock, in the manner set
forth in section 4(e) above, which notice shall specify the record
date, if any, with respect to any such action and the date on which
such action is to take place. Such notice shall also set forth such
facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be
known at the date of such notice) on the Conversion Price and the
number, kind or class of shares or other securities or property which
shall be deliverable or purchasable upon the occurrence of such action
or deliverable upon conversion of shares of Series A Convertible
Preferred Stock. In the case of any action that would require the
fixing of a record date, such notice shall be given at least 10 days
prior to the date so fixed, and in case of all other action, such
notice shall be given at least 15 days prior to the taking of such
proposed action. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of any such action.
(g) The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of
shares of capital stock of the Corporation upon conversion of any
shares of Series A Convertible Preferred Stock, provided, however,
that the Corporation shall not be required to pay any taxes that may
be payable in respect of any transfer involved in the issuance or
delivery of any certificate for such shares in a name other than that
of the holder of the shares of Series A Convertible Preferred Stock in
respect of which such shares are being issued.
(h) The Corporation shall reserve, free from preemptive
rights, out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the shares of
Series A Convertible Preferred Stock sufficient shares to provide for
the conversion of all outstanding shares of Series A Convertible
Preferred Stock.
(i) All shares of Common Stock that may be issued in
connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and
nonassessable and free from all taxes, liens or charges with respect
thereto created or imposed by the Corporation.
(j) The issuance of certificates for shares of Common Stock
upon the conversion of any shares of Series A Convertible Preferred
Stock shall be made without charge to the converting shareholder for
such certificates or any tax in respect to the issuance of such
certificates, and such certificates shall be issued in the name of, or
in such names as may be directed by, the holder of the shares
converted. If certificates for shares of Common Stock are to be
issued in a name other than the name of the holder of the shares
converted, said shares when surrendered for conversion shall be
accompanied by an instrument of transfer, in form reasonably
satisfactory to the Corporation, duly executed by the holder thereof
or his duly authorized attorney and the Corporation shall not be
required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such
certificates in a name other than that of the holder of the shares
converted, and the Corporation shall not be required to issue or
deliver such certificates, unless or until the person or persons
requesting the issuance thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of
the Corporation that such tax has been paid.
(k) The shares of Series A Convertible Preferred Stock
shall be presented for conversion at the principal office of the
Corporation or at such other place as the Corporation may from time to
time designate.
(l) If at any time the Corporation grants, issues or sells
Purchase Rights pro rata to the record holders of Common Stock, then
each holder of Series A Convertible Preferred Stock will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights that such holder could have acquired if such
holder's shares of Series A Convertible Preferred Stock were held on a
Converted Basis immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no
such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.
(m) All determinations by the Board of Directors under the
provisions hereof or affecting the holders of the Series A Convertible
Preferred Stock shall be made in good faith with due regard to the
interests of such holders and the other holders of securities of the
Corporation and in accordance with good financial practice.
5. Certain Restrictions. Notwithstanding anything to the
contrary set forth in this Statement of Designations, so long as any
shares of Series A Convertible Preferred Stock remain outstanding, the
Corporation will not take any of the following actions without the
affirmative vote of the holders of at least a majority of the Voting
Power of the outstanding shares of Series A Convertible Preferred
Stock voting separately as a single class:
(a) Authorize or issue any class or series of stock having
powers, preferences or other rights senior to those of the Series A
Convertible Preferred Stock;
(b) Alter the powers, preferences or other rights of the
holders of Series A Convertible Preferred Stock, including without
limitation, liquidation preferences herein contained; or
(c) Amend the Corporation's Articles of Incorporation in
any manner.
6. Voting Rights and Power. Except as required by law or by the
express terms of this statement, shares of Series A Convertible
Preferred Stock shall, on a Converted Basis, vote on all matters as
one class with the Common Stock, including with respect to the
following matters:
(a) Any proposal to consolidate or merge with another
Corporation or Corporations or enter into any agreement providing for
such a merger or consolidation;
(b) Any proposal to sell, transfer or otherwise dispose of
all or substantially all the assets of the Corporation in any
transaction or series of related transactions; and
(c) Any proposal to liquidate or dissolve the Corporation.
7. Registration Rights. If at any time the Corporation proposes
to register for sale to the general public, for cash, shares of Common
Stock (whether such sale is for the account of the Corporation or for
others) under conditions that would permit registration for sale of
shares of the Common Stock into which shares of the Series A
Convertible Preferred Stock are convertible (the "Sale Securities"),
the Corporation shall:
(a) Promptly give holders of shares of Series A Convertible
Preferred Stock written notice thereof; and
(b) Include in such registration (subject to and upon
conditions customary in the industry) all the Sale Securities
specified in a written request promptly made by Participating Holders,
provided, however, the underwriter engaged by the Corporation in
connection with the planned registration may, in the exercise of its
unfettered discretion, limit the number of Sale Securities to be
included within the registration, provided that any such limitation
shall be applied proportionately among all Participating Holders.
(c) Give Participating Holders, their underwriters, and
their respective counsel and accountants the opportunity to
participate in the preparation of the registration statement, and such
access to its books and records and such opportunities to discuss the
business of the Corporation with its officers and the independent
public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the
meaning of the federal Securities Act of 1933 (the "1933 Act"); use
its best efforts to keep the registration statement effective for up
to six months; prepare and file with the relevant securities
regulatory agency such amendments and supplements to such registration
statement, and use its best efforts to cause each such amendment to
become effective, as may be necessary to comply with applicable law
and regulation relating to the disposition of all securities covered
by such registration statement; use its best efforts to register or
qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by Participating Holders, provided that the
Corporation shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdiction; and
notify Participating Holders of the happening of any event as a result
of which the registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
and promptly file such amendments and supplements which may be
required on account of such event and use its best efforts to cause
each such amendment and supplement to become effective.
(d) Pay all expenses (other than underwriting discounts and
commissions, transfer taxes, if any, and fees and disbursements of
Participating Holders' counsel) relating to Sale Securities incurred
in connection with such registrations, filings or qualifications,
including without limitation all registration, filing and
qualification fees, printing and accounting fees, and fees and
disbursements of counsel for the Corporation.
(e) To the extent permitted by law, indemnify and hold
harmless Participating Holders, the officers, directors, partners,
agents and employees of Participating Holders, if any, or any
underwriter (as defined in the 1933 Act) for Participating Holders,
and each person, if any, who controls a Participating Holder or such
underwriter within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses,
claims, damages, or liabilities (joint or several) to which they may
become subject under the 1933 Act, the 1934 Act or other federal,
state or other security law, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (a
"Violation"): (i) any untrue statement or alleged untrue statement of
a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Corporation of the
1933 Act, the 1934 Act, any state or other securities law or any rule
or regulation promulgated under the 1933 Act, the 1934 Act or any
state or other securities law. The Corporation will reimburse and
each such officer, director, partner, agent, employee, underwriter or
controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss,
claim, damage, liability, or action. The indemnity obligation
contained in this subsection shall not apply to amounts paid in
settlement of any loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Corporation (which
consent shall not be unreasonably withheld), nor shall the Corporation
be liable to Participating Holders in any such case for any such loss,
claim, damage, liability, or action (i) to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration be or on behalf of a Participating
Holder or any such underwriter or controlling person or (ii) in the
case of a sale directly by a Participating Holder (including a sale
through any underwriter retained by a Participating Holder to engage
in a distribution solely on behalf of the Participating Holder), if
such untrue statement or alleged untrue statement or omission or
alleged omission was contained in a preliminary prospectus and
corrected in a final or amended prospectus, and a Participating Holder
failed to deliver a copy of the final or amended prospectus at or
prior to the confirmation of the sale of the Sale Securities to the
person asserting any such loss, claim, damage or liability in any case
where such delivery is required by the 1933 Act.
Participating Holders shall, by their election to become a
Participating Holder, be obligated to indemnify, to the extent
permitted by law, the Corporation, each of its directors, each of its
officers who have signed the registration statement, each person, if
any, who controls the Corporation within the meaning of the 1933 Act,
each agent and any underwriter for the Corporation, and any other
person selling securities in such registration statement or any of its
directors, officers, partners, agents or employees or any person who
controls such other person or underwriter, against any losses, claims,
damages, or liabilities (joint or several) to which the Corporation or
any such director, officer, controlling person, agent, or underwriter
or controlling person, or other such person or director, officer or
controlling person may become subject, under the 1933 Act, the 1934
Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by or on behalf of such
Participating Holder expressly for use in connection with such
registration; and Participating Holders will reimburse any legal or
other expenses reasonably incurred by the Corporation or any such
director, officer, partner, agent, employee, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that this indemnity
obligation shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is
effected without the consent of the Participating Holder, which
consent shall not be unreasonably withheld nor, in the case of a sale
directly by the Corporation of its securities (including a sale of
such securities through any underwriter retained by the Corporation to
engage in the distribution solely on behalf of the Corporation), shall
Participating Holders be liable to the Corporation in any case in
which such untrue statement or alleged untrue statement or omission or
alleged omission was contained in a preliminary prospectus and
corrected in a final or amended prospectus, and the Corporation failed
to deliver a copy of the final or amended prospectus at or prior to
the confirmation of the sale of the securities to the person asserting
any such loss, claim, damage or liability in any case where such
delivery is required by the 1933 Act; and provided, further, that the
indemnification obligation of Participating Holders shall be limited
to the aggregate public offering price of the Sale Securities sold by
Participating Holders pursuant to such registration.
8. Amendment and Waiver. (a) No amendment or modification
(including any made by means of a merger or consolidation) of any
provision hereof will be binding or effective without prior vote or
written consent of the holders of at least majority of the Voting
Power of the Series A Convertible Preferred Stock outstanding at the
time such action is taken.
(b) No amendment, modification or waiver of any provision
hereof will extend to or affect any obligation not expressly amended,
modified or waived or impair any right consequent thereon. No course
of dealing, and no failure to exercise or delay in exercising any
right, remedy, power or privilege hereunder, will operate as a waiver,
amendment or modification of any provision hereof.
In witness whereof, these Articles of Amendment to the Articles
of Incorporation of Laguna Gold Company have been executed this 30th
day of June, 1995.
Laguna Gold Company
By: ___________________________
Roy K. Ross,
Executive Vice President
No. MRC-000
This Warrant has not been registered under the Securities Act of 1933,
as amended. No sale or disposition may be effected without (i) an
effective registration statement related hereto, (ii) an opinion of
counsel for the holder, reasonably satisfactory to the Company, that
such registration is not required, (iii) receipt of a no-action letter
from the Securities and Exchange Commission, or (iv) otherwise
complying with the provisions of Paragraph 8 of this Warrant.
Mallon Resources Corporation
WARRANT TO PURCHASE SHARES OF COMMON STOCK
THIS CERTIFIES THAT, for value received,
*** [name] ***
is entitled to purchase up to
*** [# of shares] ***
shares (as adjusted pursuant to Paragraphs 4 and 5 hereof, the
"Shares") of the fully paid and nonassessable $0.01 par value per
share Common Stock of Mallon Resources Corporation, a Colorado
corporation (the "Company"), at the price of $2.50 per share (such
price and such other prices as shall result, from time to time, from
the adjustments specified in Paragraphs 4 and 5 hereof are herein
referred to as the "Warrant Price"), subject to the provisions and
upon the terms and conditions hereinafter set forth. As used herein,
(a) the term "Common Stock" shall mean the Company's currently
authorized $0.01 par value per share Common Stock, and any stock into
or for which such Common Stock may hereafter be converted or
exchanged, and (b) the term "Other Warrants" shall mean any warrant
issued upon transfer or partial exercise of this Warrant.
1. Term. The purchase right represented by this Warrant is
exercisable, in whole or in part, at any time and from time to time
beginning June 30, 1995 until the close of business on June 30, 2000.
After the close of business on June 30, 2000, this Warrant shall be
null, void, and of no further force or effect.
2. Method of Exercise; Payment; Issuance of New Warrant.
Subject to Paragraph 1 hereof, the purchase right represented by this
Warrant may be exercised by the holder hereof, in whole or in part and
from time to time, by the surrender of this Warrant (with the notice
of exercise form attached hereto as Exhibit A duly executed) at the
principal office of the Company and by the payment to the Company, by
check, of an amount equal to the then applicable Warrant Price per
share multiplied by the number of Shares then being purchased.
3. Stock Fully Paid; Reservation of Shares. All Shares that may
be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be fully paid and nonassessable, and free from
all taxes, liens and charges with respect to the issue thereof.
During the period within which the rights represented by this Warrant
may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issue upon exercise of the purchase
rights evidenced by this Warrant, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by
this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time
upon the occurrence of certain events, as follows:
a. Reclassification or Merger. In case of any
reclassification, change or conversion of securities of the class
issuable upon exercise of this Warrant (other than a change in par
value, or from 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 case of
any merger or consolidation of the Company with or into another
corporation (other than a merger or consolidation with another
corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or
change of outstanding securities issuable upon exercise of this
Warrant), or in case of any sale of all or substantially all of the
assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the
holder of this Warrant a new Warrant (in form and substance
satisfactory to the holder of this Warrant), so that the holder of
this Warrant shall have the right to receive, at a total purchase
price not to exceed that payable upon the exercise of the unexercised
portion of this Warrant, and in lieu of the shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property
receivable upon such reclassification, change or merger by a holder of
the number of shares of Common Stock then purchasable under this
Warrant. Such new Warrant shall contain such provisions of this
Warrant as shall be appropriate in the interest of the holder of this
Warrant and shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Paragraph 4 and in Paragraph 5. The provisions of this
subparagraph (a) shall similarly apply to successive
reclassifications, changes, mergers, consolidations and transfers.
b. Subdivision or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall
subdivide or combine its Common Stock, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in
the case of a combination.
c. No Impairment. The Company will not, by amendment of
its Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but
will at all times in good faith assist in the carrying out of all the
provisions of this Paragraph 4 and Paragraph 5 and in the taking of
all such action as may be necessary or appropriate in order to fulfill
the terms hereof.
d. Notices of Record Date. In the event of any taking by
the Company of a record of its shareholders for the purpose of
determining shareholders who are entitled to receive payment of any
dividend (other than a cash dividend) or other distribution, any right
to subscribe for, purchase or otherwise acquire any shares of any
class or any other securities or property, or to receive any other
right, the Company shall mail to the holder of this Warrant, at least
20 days prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
e. Adjustment of Number of Shares. Upon each adjustment in
the Warrant Price pursuant to this Paragraph 4, the number of Shares
of Common Stock purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number
of Shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the
Warrant Price immediately prior to such adjustment and the denominator
of which shall be the Warrant Price immediately thereafter.
5. Adjustments for Sales Below Warrant Price.
a. Excluded Shares. Not withstanding the other provisions
of this Paragraph 5, no adjustments to the Warrant Price shall be made
with respect to the Company's issuance of (a) shares of Common Stock
issued upon conversion of Preferred Stock; or (b) options (and shares
of Common Stock issued upon exercise thereof) issued to employees,
directors or consultants pursuant to a stock option plan or other
arrangement approved by the Board of Directors, including currently
outstanding options issued to employees, directors or consultants as
the same may be amended upon approval of the Board of Directors and
options issued in substitution therefor.
b. Adjustment to Warrant Price. If, subject to the
limitations of subparagraph 5(a), during any calendar year that this
Warrant is outstanding the Company shall issue or sell an aggregate
number of shares of Common Stock equal to or greater than 5% of the
number of shares of Common Stock outstanding at the beginning of such
calendar year for a consideration per share less than the Warrant
Price in effect immediately prior to such sale or issuance, the
Warrant Price shall be reduced to an amount determined by dividing (A)
the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such sale or issuance multiplied by the Warrant
Price, plus (ii) the consideration, if any, received by the Company
upon such issuance or sale, by (B) the total number of shares of
Common Stock outstanding immediately after such issuance or sale.
c. Convertible or Exchangeable Securities. For purposes of
this Paragraph 5, if, subject to the limitations of subparagraph 5(a),
the Company issues any securities that by their terms are convertible
into or exchangeable for shares of Common Stock or consist of any
right or option to purchase or otherwise acquire shares of Common
Stock or to purchase any securities that by their terms are
convertible into or exchangeable for shares of Common Stock (whether
or not such rights are immediately exercisable), then the total
maximum number of shares of Common Stock issuable shall (as of the
date of the issuance or sale of such convertible or exchangeable
securities, rights or options) be deemed to be outstanding and to have
been issued for a consideration per share determined as provided in
subparagraph 5(d) below. Except as provided below, no further
adjustments shall be made pursuant to this subparagraph upon the
actual issuance of such shares upon conversion, exchange or exercise
of such securities. Upon the expiration of any such securities
without conversion, exchange or exercise, or the redemption or
repurchase of any such securities, or the conversion of any such
securities into or exchange of any such securities for, or exercise of
any such securities with respect to, shares of Common Stock, the
Warrant Price and the number of shares of Common Stock purchasable
upon exercise of this Warrant shall be readjusted to such price and
number as would have obtained had the adjustment made upon the
issuance of such securities been made upon the basis of the issuance
of only the number of such securities as were actually converted into,
exchanged for, or exercised with respect to, shares of Common Stock
plus the number of such securities that remain outstanding after such
expiration, redemption, repurchase, conversion, exchange or exercise.
If the purchase price or conversion rate provided for in any such
security or the number of shares issuable upon conversion, exchange or
exercise of any such security shall change at any time, then, upon
such change becoming effective, the Warrant Price and the number of
shares of the Common Stock then purchasable upon exercise of this
Warrant shall forthwith be readjusted to such price and number as
would have obtained had the adjustment made upon the issuance of such
securities been made upon the basis of (a) the issuance of only the
number of shares of Common Stock theretofore actually delivered upon
the conversion, exchange or exercise of such securities, and the total
consideration received therefor, and (b) the grant or issuance, at the
time of such change, of any such securities then still outstanding for
the consideration, if any, received by the Company therefor and the
consideration to be received and shares issuable on the basis of such
change.
d. Computation. For the purposes of any computation with
respect to the Warrant Price pursuant to this Paragraph 5 respecting
consideration received:
(i) Upon issuance of shares of Common Stock for cash,
the consideration received shall be the amount of cash received by the
Company therefor; and upon issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the amount of the
non-cash consideration shall be deemed to be the fair value thereof as
determined in good faith by the Board of Directors of the Company, in
either case without deduction of any expenses, underwriting
commissions, concessions or discounts paid or allowed by the Company
in connection therewith; and
(ii) Upon the issuance of securities convertible into,
exchangeable for, or consisting of any right to purchase, shares of
Common Stock or any securities that by their terms are convertible
into or exchangeable for shares of Common Stock, the aggregate
consideration received shall be equal to the consideration received by
the Company for any such securities, plus the additional minimum
consideration, if any, to be received by the Company upon the
conversion, exchange or exercise thereof (determined as provided in
subparagraph 5(d)(i) above).
e. Adjustment to Number of Shares. Upon each adjustment in
the Warrant Price pursuant to this Paragraph 5, the number of Shares
of Common Stock purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number
of Shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the
Warrant Price immediately prior to such adjustment and the denominator
of which shall be the Warrant Price immediately thereafter.
6. Notice of Adjustments. Whenever the Warrant Price or the
number of Shares purchasable hereunder shall be adjusted pursuant to
Paragraphs 4 or 5 hereof, the Company shall make a certificate signed
by its president setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price and the
number of Shares purchasable hereunder after giving effect to such
adjustment, and shall cause copies of such certificate to be
personally delivered, mailed by registered mail, or delivered by a
reputable delivery service that provides confirmation of delivery to
the holder of this Warrant.
7. Redemption.
a. Right to Redeem. Subject to the provisions of this
Paragraph 7, at any time after either (i) the closing price for the
Common Stock as recorded on a national securities exchange, or (ii)
the last quoted trade for the Common Stock on the Nasdaq, has for at
least 20 out of 30 consecutive trading days been not less than $7.50,
the Company may redeem this Warrant. The redemption price (the
"Redemption Price") shall be $0.01 per share of Common Stock covered
by this Warrant at the time of redemption.
b. Redemption Procedures. If the Company is to redeem this
Warrant, it shall give written notice of such redemption not less than
30 nor more than 60 days prior to the selected Redemption Date. Such
notice shall (i) state the Redemption Date, (ii) state the Redemption
Price, (iii) state that this Warrant may be exercised for Common Stock
until the close of business on the day preceding the Redemption Date,
and (iv) request that the holder surrender this Warrant certificate to
the Company on or after the Redemption Date at the place designated in
such notice. On or after the date fixed in such notice for
redemption, the holder of this Warrant shall present and surrender
this Warrant certificate at the place designated in said notice and
thereupon the Redemption Price of such Warrant shall be paid in cash
to, or to the order of, the person whose name appears on this
certificate as the owner hereof. From and after the Redemption Date,
unless the Company shall default in providing for the payment of the
Redemption Price pursuant to such notice, all rights of the holders of
this Warrant, except the right to receive the Redemption Price, shall
cease and terminate.
c. Prior Exercise. Notwithstanding the foregoing
provisions of this Paragraph 7, to the extent this Warrant has been
exercised for Common Stock prior to the Redemption Date, the Company
shall not be required to redeem this Warrant and, accordingly, the
Redemption Price required to be paid on the Redemption Date following
such exercise shall be reduced correspondingly.
8. Compliance with Securities Act; Disposition of Warrant or
Shares of Common Stock.
a. Compliance with Securities Act. The holder of this
Warrant, by acceptance hereof, agrees that this Warrant and the shares
of Common Stock to be issued upon exercise hereof are being acquired
for investment and that such holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except under circumstances which will not result
in a violation of any law, including without limitation, the
Securities Act of 1933, as amended (the "Act"). Upon exercise of this
Warrant, unless the Shares being acquired are registered under the Act
or an exemption from such registration is available, the holder hereof
shall confirm in writing, by executing the form attached as Exhibit A
hereto, that the shares of Common Stock so purchased are being
acquired for investment and not with a view toward distribution or
resale. This Warrant and all Shares issued upon exercise of this
Warrant (unless registered under the Act) shall be stamped or
imprinted with legends in substantially the following form:
This Warrant has not been registered under the Securities Act of 1933,
as amended. No sale or disposition may be effected without (i) an
effective registration statement related hereto, (ii) an opinion of
counsel for the holder, reasonably satisfactory to the Company, that
such registration is not required, (iii) receipt of a no-action letter
from the Securities and Exchange Commission, or (iv) otherwise
complying with the provisions of Paragraph 8 of this Warrant.
b. Disposition of Warrant or Shares. With respect to any
offer, sale or other disposition of this Warrant or any shares of
Common Stock acquired pursuant to the exercise of this Warrant prior
to registration of such shares, the holder hereof and each subsequent
holder of this Warrant agrees to give written notice to the Company
prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by
the Company, to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the Act
as then in effect or any federal or state law then in effect) of this
Warrant or such shares of Common Stock and indicating whether or not
under the Act certificates for this Warrant or such shares of Common
Stock to be sold or otherwise disposed of require any restrictive
legend as to applicable restrictions on transferability in order to
insure compliance with the Act. Promptly upon receiving such written
notice and reasonably satisfactory opinion, if so requested, the
Company, as promptly as practicable, shall notify such holder that
such holder may sell or otherwise dispose of this Warrant or such
shares of Common Stock, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant
to this subparagraph (b) that the opinion of counsel for the holder is
not reasonably satisfactory to the Company, the Company shall so
notify the holder promptly after such determination has been made.
Notwithstanding the foregoing, this Warrant or such shares of Common
Stock may be offered, sold or otherwise disposed of in accordance with
Rule 144 under the Act, provided that the Company shall have been
furnished with such information as the Company may reasonably request
to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing this Warrant or the
shares of Common Stock thus transferred (except a transfer pursuant to
Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Act, unless in
the aforesaid opinion of counsel for the holder, such legend is not
required to order to insure compliance with the Act.
9. Rights as Shareholders; Information. No holder of this
Warrant, as such, shall be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for
any purpose, nor shall anything contained herein be construed to
confer upon the holder of this Warrant, as such, any of the rights of
a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been
exercised and the Shares purchasable upon the exercise hereof shall
have become deliverable, as provided herein. Notwithstanding the
foregoing, the Company will transmit to the holder of this Warrant
such information, documents and reports as are generally distributed
to the holders of any class or series of the securities of the Company
concurrently with the distribution thereof to the shareholders.
10. Modification and Waiver. This Warrant and any provision
hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of
the same is sought.
11. Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company
shall be delivered personally or by overnight courier, or shall be
sent by certified or registered mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the
Company at its principal place of business.
12. Binding Effect on Successors. This Warrant shall be binding
upon any corporation succeeding the Company by merger or
consolidation, and all of the obligations of the Company relating to
the Common Stock issuable upon the exercise or conversion of this
Warrant shall survive the exercise, conversion and termination of this
Warrant and all of the covenants and agreements of the Company shall
inure to the benefit of the successors and assigns of the holder
hereof. The Company will, at the time of the exercise or conversion
of this Warrant, in whole or in part, upon request of the holder
hereof but at the Company's expense, acknowledge in writing its
continuing obligation to the holder hereof in respect of any rights
to which the holder hereof shall continue to be entitled after such
exercise or conversion in accordance with this Warrant; provided, that
the failure of the holder hereof to make any such request shall not
affect the continuing obligation of the Company to the holder hereof
in respect of such rights.
13. Descriptive Headings. The descriptive headings of the
several Paragraphs of this Warrant are inserted for convenience only
and do not constitute a part of this Warrant.
14. Governing Law. This Warrant shall be construed and enforced
in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Colorado.
Mallon Resources Corporation
Date: June 30, 1995
By: __________________________________
Authorized Officer
EXHIBIT A
NOTICE OF EXERCISE
To Mallon Resources Corporation:
1. The undersigned hereby elects to purchase _____ shares of
Common Stock of Mallon Resources Corporation pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned holder of this Warrant.
3. The undersigned represents that the aforesaid shares are
being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution
thereof and that the undersigned has no present intention of
distributing or reselling such shares.
_______________________________
(Signature)
____________________________
(Date)
