<PAGE> 1
As filed with the Securities and Exchange Commission on December 3, 1996
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
REGISTRATION STATEMENT
ON FORM S-3
UNDER THE SECURITIES ACT OF 1933
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BENTON OIL AND GAS COMPANY
(Exact name of registrant as specified in charter)
Delaware 77-0196707
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1145 Eugenia Place A.E. Benton, C.E.O.
Suite 200 1145 Eugenia Place
Carpinteria, California 93013 Suite 200
(805) 566-5600 Carpinteria, California 93013
(Address, including zip code, and (805) 566-5600
telephone number, including area code, (Name, address, including zip code,
of registrant's principal executive and telephone number, including area
offices) code, of agent for service)
-------------------------------------
Copies to:
Jack A. Bjerke
Emens, Kegler, Brown, Hill & Ritter Co., L.P.A.
65 East State Street, Suite 1800
Columbus, Ohio 43215
(614) 462-5400
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------- ------------------ ------------------------ ---------------------- ------------------
Title of each Class of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered(1) Offering Price Per Aggregate Offering Registration
Share(2) Price(2) Fee(2)
- -------------------------------------- ------------------ ------------------------ ---------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 9,748 $25.25 $246,137 $75
- -------------------------------------- ------------------ ------------------------ ---------------------- ------------------
</TABLE>
<PAGE> 2
<TABLE>
- -------------------------------------- ------------------ ------------------------ ---------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 414,860 $8.75 $3,630,035 $1,101
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<FN>
1. Certain of the shares to be registered hereunder are issuable by the
Company upon the exercise of certain outstanding warrants and options and
this Registration Statement serves to register the issuance of shares upon
exercise of the warrants and options and the subsequent resale of such
shares.
2. Estimated pursuant to paragraphs (c) and (g) of Rule 457 promulgated under
the Securities Act of 1933, as amended, solely for purposes of calculating
the registration fee. The registration fee is based upon the average of the
high and low sale prices at which shares of Common Stock were sold on
November 29, 1996 on the Nasdaq Stock Market for the 9,748 shares which
have been issued by the Company and are expected to be resold pursuant to
this Registration Statement and based upon an aggregate of $3,630,035 the
registrant will receive if all shares of Common Stock are issued (an
aggregate of 414,860 shares) upon the exercise of outstanding common stock
purchase warrants and options to purchase shares of common stock, as
registered hereunder.
</TABLE>
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<PAGE> 3
Subject to Completion
December 3, 1996
424,608 Shares
BENTON OIL AND GAS COMPANY
COMMON STOCK
This Prospectus relates to the offering of an aggregate of 424,608 shares of
Common Stock (the "Shares"), $.01 par value, of Benton Oil and Gas Company (the
"Company"), offered to and/or for the account of certain stockholders of the
Company (the "Selling Stockholders"). An aggregate of 168,360 of the Shares are
issuable by the Company upon the exercise of certain outstanding common stock
purchase warrants (the "Warrants") issued to certain investors, brokers and
advisors in connection with various transactions described herein under
"Description of Warrants" and an aggregate of 246,500 of the Shares are issuable
by the Company upon the exercise of certain outstanding stock options (the
"Options") issued to certain consultants and employees of an affiliate of the
Company in connection with and as additional compensation for services rendered.
See "Description of Options." This Prospectus is to be used for the offer and
issuance of shares of Common Stock upon the exercise of the Warrants and Options
and for the public resale of the Shares so issued by the Selling Stockholders.
The Company will receive an aggregate of $3,630,035, assuming all Warrants and
Options are exercised. In addition, this Prospectus relates to an aggregate of
9,748 Shares being offered by Selling Stockholders described herein who acquired
such Shares upon the exercise of Options and/or Warrants, as more fully
described under "Description of Warrants" and "Description of Options." The
Company will not receive any proceeds from the sale of the Shares offered by the
Selling Stockholders. See "Use of Proceeds," "Selling Stockholders" and "Plan of
Distribution."
The Shares may be sold from time to time by the Selling Stockholders, or by the
pledgees, transferees or other successors in interest. Such sales may be made on
The New York Stock Exchange, in the over-the-counter market, or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The Shares may be sold by one or
more of the following: (a) block trades (which may include crosses) in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) exchange
transactions in accordance with the rules of such exchange; (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (e) secondary distributions. In effecting sales, brokers or dealers engaged
by the Selling Stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers participating in such sales may receive
commissions, discounts or concessions from the Selling Stockholders or
purchasers for whom they may act as agent or to whom they sell as principal, or
both, in amounts to be negotiated immediately prior to the sale and which are
not expected to exceed those customary in the type of transactions involved.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters' within the meaning of the Act in connection with
such sales, and any commissions, discounts, concessions or profits received by
them may be deemed to be underwriting compensation under the Act.
The Shares are being offered by the Company and the Selling Stockholders without
any underwriting discounts or commissions.
All fees and expenses of registration of the Shares, estimated to be
approximately $15,000, shall be borne by the Company. Normal commission expenses
and brokerage fees, as well as the fees of counsel to the Selling Stockholders,
and any applicable transfer taxes, are payable individually by the Selling
Stockholders.
<PAGE> 4
On November 29, 1996 the last sale price of the Company's Common Stock on
the Nasdaq Stock Market was $25.25 per share.
INVESTORS SHOULD CONSIDER THE MATTERS SET FORTH UNDER "RISK FACTORS,"
beginning on page 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------
The date of this Prospectus is ___________________, 1996
2
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company can be inspected and
copied at the Public Reference Room of the Commission, Room 1024, Judiciary
Plaza Building, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661 and 13th Floor, Seven World Trade Center, New York, New York.
Copies of this material may be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza Building, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material can be
inspected at the offices of The New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission in Washington, D.C., a Registration
Statement on Form S-3 together with all amendments, exhibits, and schedules
thereto (the "Registration Statement") under the Act, with respect to the Shares
offered by this Prospectus. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Shares, reference is made to the
Registration Statement and to the exhibits and schedules incorporated therein by
reference or filed as a part thereof. Statements made in this Prospectus as to
the contents of any contract, agreement or document referred to are not
necessarily complete; with respect to each such contract, agreement or other
document filed or incorporated by reference as an exhibit to the Registration
Statement, reference is made to the exhibit for a complete description of the
matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Exchange Act, are hereby
incorporated by reference, except as superseded or modified herein: (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, as amended on Form 10-K/A filed on June 14, 1996; (ii) the Company's
Current Report on Form 8-K filed March 27, 1996, (iii) the Company's Current
Report on Form 8-K filed January 12, 1996; (iv) the Company's Current Report on
Form 8-K filed January 8, 1996; (v) the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996; (vi) the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996; (vii) the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996; and (viii) the
description of Common Stock contained in the Company's Registration Statements
and amendments filed pursuant to the Exchange Act on March 17, 1989, May 14,
1991 and May 15, 1992.
Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering shall be deemed to be incorporated by reference in
this Prospectus and shall be a part hereof from the date of filing of such
document. Any statement contained in the documents incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, on the
written or oral request of such person, a copy of any and all of the documents
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Benton Oil and Gas Company, 1145
Eugenia Place, Suite 200, Carpinteria, California 93013 (the principal executive
offices of the Company), telephone (805) 566-5600, Attn: Corporate Secretary.
3
<PAGE> 6
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION......................................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................3
THE COMPANY................................................................5
RISK FACTORS...............................................................6
RECENT DEVELOPMENTS........................................................9
USE OF PROCEEDS...........................................................11
SELLING STOCKHOLDERS......................................................11
DESCRIPTION OF WARRANTS...................................................17
DESCRIPTION OF OPTIONS....................................................17
PLAN OF DISTRIBUTION......................................................18
LEGAL MATTERS.............................................................18
EXPERTS...................................................................18
GLOSSARY..................................................................19
No person has been authorized to give any information or make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering referred to herein and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company or any Selling Stockholder. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy the securities
registered hereby in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained or incorporated
by reference herein is correct as of any time subsequent to the date hereof.
4
<PAGE> 7
THE COMPANY
The Company is an independent energy company which has been engaged in the
development and production of oil and gas properties since 1989. Although
originally active only in the United States, the Company has developed
significant interests in Venezuela and Russia, and recently sold substantially
all of its remaining United States oil and gas interests. The Company's
operations are conducted principally through its 80%-owned Venezuelan
subsidiary, Benton-Vinccler, C.A. ("Benton-Vinccler"), which operates in the
South Monagas Unit in Venezuela, and its 34%-owned Russian joint venture,
GEOILBENT, which operates in the North Gubkinskoye Field in Siberia, Russia.
As of December 31, 1995, the Company had total assets of $214.8 million ($388.0
million at September 30, 1996), total estimated proved reserves of 96,212 MBOE,
and a standardized measure of discounted future net cash flow, before income
taxes, for total proved reserves of $372.3 million. For the year ended December
31, 1995 and the nine months ended September 30, 1996, the Company had total
revenues of $65.1 million and $115.7 million, respectively and net income of
$10.6 million and $18.9 million, respectively.
The Company has been successful in increasing reserves, production, revenues and
earnings during the last two years. From year-end 1993 through 1995, estimated
proved reserves increased from 42,785 MBOE to 96,212 MBOE, and net production
increased from a total of 519 MBOE in 1993 to 6,647 MBOE in 1995. As production
has increased over this period, average lifting costs per Bbl have declined from
$7.26 to $1.19 in Venezuela, and from $16.22 to $5.63 in Russia. Between 1993
and 1995, the Company's annual revenues increased from $7.5 million to $65.1
million.
The following table summarizes the Company's financial operating data, proved
reserves and production activity in Venezuela and Russia for each of the three
years ended December 31:
<TABLE>
<CAPTION>
VENEZUELA(1) RUSSIA
------------------------------- ---------------------------------
Dollars in thousands 1993 1994 1995 1993 1994 1995(2)
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Oil and Gas Revenues $ 1,333 $21,472 $49,174 $ 324 $ 3,513 $ 6,016
Expenses(3) 1,394 8,806 17,876 558 3,670 4,276
------- ------- ------- ------- ------- -------
Results of Operations from Oil
and Gas Producing Activities $ (61) $12,666 $31,298 $ (234) $ (157) $ 1,740
======= ======= ======= ======= ======= =======
Proved Reserves (MBOE) 19,389 60,707 73,593 10,121 17,540 22,618
Average Daily Production (BOE) 440 6,902 14,949 77 806 1,345
<FN>
(1) Includes 100% of the reserve information, production activity and
financial data, without deduction for minority interest. All
Venezuelan reserves are attributable to an operating service agreement
between Benton-Vinccler and Lagoven, S.A. ("Lagoven") an affiliate of
the national oil company, Petroleos de Venezuela, S.A. ("PdVSA"),
under which all mineral rights are owned by the Government of
Venezuela.
(2) The financial information related to Russia and included in the 1995
presentation contains information for the nine months ended September
30, 1995, the end of the fiscal period for GEOILBENT.
(3) Expenses include lease operating costs and production taxes and depletion.
</TABLE>
The Company was incorporated in Delaware in September 1988. The principal
executive offices of the Company are located at 1145 Eugenia Place, Suite 200,
Carpinteria, California 93013, and its telephone number at that address is (805)
566-5600.
5
<PAGE> 8
RISK FACTORS
In addition to the other information contained in this Prospectus, investors
should carefully consider the following factors in connection with an investment
in the Shares:
Risk from Substantial Concentration of Operations
The Company's cash flow-generating operations are substantially concentrated in
Venezuela. For 1995, the Company derived approximately 78% of its consolidated
oil and gas revenues and approximately 76% of its proved reserves from its
Venezuelan operations. If the Venezuelan operations are adversely effected, the
Company, due to its concentration in and reliance on the Venezuelan operations,
will experience an adverse impact on its financial condition and operations.
There are significant operating and economic risks associated with conducting
business in Venezuela.
Political and Economic Risks of International Operations--General
Substantially all of the Company's oil and gas producing operations and
non-financial assets are in Venezuela and Russia and all operating income is
expected to be generated from these countries (absent any new investments). As a
result, the Company is subject to certain political, economic and other
uncertainties including risks of war, civil disturbance, expropriation,
nationalization, renegotiation or modification of existing contracts, taxation
policies, foreign exchange restrictions, international monetary fluctuations and
other hazards arising out of foreign governmental sovereignty over the Company's
operations.
Political and Economic Risks of International Operations--Venezuela
The Company began to operate in Venezuela in 1992. For 1995, the Company derived
approximately 78% of its consolidated oil and gas revenues and approximately 76%
of its proved reserves from its Venezuelan operations. The petroleum industry in
Venezuela is highly regulated by the government with respect to such matters as
maximum daily production, methods of production and environmental matters, both
directly and indirectly through PdVSA. In addition, the timing and extent of the
Company's development activities are subject to the approval of Lagoven and the
Ministry of Energy and Mines. There can be no assurance that the government or
PdVSA will not impose significant new regulations regarding the petroleum
industry generally or that the development activities proposed by
Benton-Vinccler will receive the necessary approval. The Company also expects to
increase its exposure to Venezuela through the continued investment in
Benton-Vinccler and the Delta Centro consortium. While Benton-Vinccler has never
had a material dispute or payment interruption with Lagoven, PdVSA or the
Venezuelan government, the country of Venezuela has experienced significant
political and economic instability, high inflation, and shortages of foreign
currency.
Political and Economic Situation. In May 1993, the Venezuelan Senate voted to
authorize the impeachment of President Carlos Andres Perez. Subsequently, Rafael
Caldera was elected president and took office in February 1994. Upon assuming
the presidency, President Caldera was immediately faced with a solvency crisis
in the banking system which necessitated a government takeover of nine financial
institutions, including Banco Latino, one of the largest Venezuelan banks.
Consequently, the bolivar devalued sharply, inflation rose and gross domestic
product ("GDP") contracted. Though Venezuela experienced positive GDP growth for
1995, it was the first increase in three years, and the 1995 GDP figures did not
reflect the full effects of a currency devaluation at year end. On April 22,
1996, the Venezuelan government announced the lifting of controls on foreign
exchange transactions, having announced the lifting of controls on interest
rates one week earlier. The Venezuelan government also announced a $1.4 billion
preliminary loan accord with the International Monetary Fund. Although these
actions have led to the devaluation of the bolivar and a rise in interest rates
and are likely to lead to temporary increases in inflation, they are generally
viewed as likely to have a positive effect in the long term. There can be no
assurance, however, that such actions will be successful in resolving
Venezuela's economic difficulties.
6
<PAGE> 9
Inflation and Currency Controls. Venezuela has experienced high levels of
inflation over the past decade. The consumer price inflation rate was
approximately 38% for calendar year 1993, 61% for 1994, and 60% for 1995. In
addition to increasing the Company's bolivar-denominated expenses with respect
to its Venezuelan operations, these high rates of inflation led the Venezuelan
government to devalue the bolivar by 41% on December 11, 1995. In July 1994, the
Venezuelan government imposed a program of currency exchange controls that was
lifted in April 1996. Pursuant to its agreement with Lagoven, Benton-Vinccler
receives its payments from Lagoven in U.S. dollars deposited directly into a
U.S. bank account. Although the lifting of currency controls is expected to lead
to increased economic stability in the long term, it is likely to lead to a
temporary rise in inflation in Venezuela.
Oil Production and OPEC. News reports speculate that Venezuela is currently
producing oil in excess of the output quota established by OPEC. While Venezuela
remains a member of OPEC and has yet to face any sanctions, there is a risk that
pressure from OPEC could cause Venezuela to cut oil production voluntarily to
comply with the established quotas or take action that could depress world oil
prices. Such compliance could require a significant reduction in Venezuelan oil
production and could have a material adverse impact on Benton-Vinccler.
Political and Economic Risks of International Operations--Russia
Since the dissolution of the Soviet Union in 1991, Russia has experienced
periods of political unrest and instability, high inflation, wide currency
exchange rate swings, contractions in GDP, volatile tariff and taxation
policies, and the lack of a clear and stable legal and administrative
environment governing oil and gas licensing and operations. There can be no
assurance that any of these factors in addition to other factors may not persist
or worsen and therefore negatively affect the Company's operations in Russia.
In addition to the factors discussed above, Russia has established an export
tariff on all oil produced in and exported from Russia which, as imposed, has
the effect of reducing the potential profits to the Company and could render its
proved reserves attributable to Russia uneconomic. In July 1996, oil export
tariffs were terminated in accordance with an IMF loan condition. However,
Russia has proposed that such tariffs be replaced by an excise, pipeline or
other tax on producers which may equal or exceed the export tariff, but it is
unclear how such other tax rates and regimes will be set and administered. The
legislative and regulatory environment in Russia continues to be subject to
frequent change and uncertainty.
The Company believes it will not receive any significant distributions from
GEOILBENT for several years because substantially all of the money received by
GEOILBENT from the North Gubkinskoye Field will be reinvested to fund
development activities.
Properties Under Development
As of December 31, 1995, approximately 65% of the Company's proved reserves were
undeveloped and required development activities, consisting primarily of
development drilling and construction of production facilities. As a result, the
Company will require substantial capital expenditures to develop all of its
proved reserves. At December 31, 1995, the anticipated future development costs
for proved reserves in Venezuela and Russia were $76.4 million and $36.7
million, respectively. The Company does not currently have the capital to
develop all of these reserves, and if such capital does not otherwise become
available, the Company will either enter into joint ventures to develop the
projects, which will result in the Company retaining a smaller interest, or not
develop the reserves. There can be no certainty regarding the commercial
feasibility of developing these reserves, the availability of financing, or the
timing or costs associated therewith. If such capital is available, there can be
no assurance that the Company will be able to develop and produce sufficient
reserves to recover the costs expended and operate the wells profitably.
7
<PAGE> 10
Engineers' Estimates of Reserves and Future Net Revenue
Estimates of economically recoverable oil and gas reserves and of future net
cash flows are based upon a number of variable factors and assumptions, all of
which are to some degree speculative and may vary considerably from actual
results. Therefore, actual production, revenues, taxes, and development and
operating expenditures may not occur as estimated. Future results of operations
of the Company will depend upon its ability to develop, produce and sell its oil
and gas reserves. The reserve data incorporated by reference herein are
estimates only and are subject to many uncertainties. Actual quantities of oil
and gas may differ considerably from the amounts set forth herein. In addition,
different reserve engineers may make different estimates of reserve quantities
and cash flows based upon the same available data.
Development of Additional Reserves
The Company's future success may also depend upon its ability to find or acquire
additional oil and gas reserves that are economically recoverable. Except to the
extent that the Company conducts successful exploration or development
activities or acquires properties containing proved reserves, the proved
reserves of the Company will generally decline as reserves are produced. There
can be no assurance that the Company will be able to discover additional
commercial quantities of oil and gas, or that the Company will be able to
continue to acquire interests in under-developed oil and gas fields and enhance
production and reserves by drilling replacement wells and drilling development
wells, or that the Company will have continuing success drilling productive
wells and acquiring under-developed properties at low finding costs.
Retention and Attraction of Key Personnel
The Company depends to a large extent on the abilities and continued
participation of certain key employees, the loss of whose services could have a
material adverse effect on the Company's business. In an effort to minimize the
risk, the Company has entered into employment agreements with certain key
employees. There can be no assurance that the Company will be able to attract
and retain such personnel on acceptable terms and the failure to do so could
have a material adverse effect on the Company.
Anti-Takeover Provisions
The Delaware General Corporation Law contains certain provisions which may delay
or prevent an attempt by a third party to acquire control of the Company. The
Company has also adopted a Stockholders' Rights Plan designed to impede a
hostile attempt to acquire the Company. In addition, the severance provisions of
employment agreements with certain members of management could impede an
attempted change of control of the Company.
Ability to Issue Preferred Stock
The Company may issue Preferred Stock in the future without stockholder approval
and upon such terms and conditions, and having such rights, privileges and
preferences, as the Board of Directors may determine. The rights of the holders
of Common Stock will be subject and subordinate to, and may be adversely
affected by, the rights of the holders of any Preferred Stock that may be issued
in the future. The issuance of Preferred Stock could have the effect of making
it more difficult for a third party to acquire, or discouraging a third party
from acquiring, a majority of the outstanding voting stock of the Company. The
Company has no outstanding Preferred Stock and no present plans to issue any
shares of Preferred Stock.
RISKS RELATED TO THE OIL AND GAS INDUSTRY
Risk of Oil and Gas Operations
The Company's operations are subject to all of the risks normally incident to
the operation and development of oil and gas properties and the drilling of oil
and gas wells, including encountering unexpected formations or pressures,
blowouts, cratering and fires, and, in horizontal wellbores, the increased risk
of mechanical failure and
8
<PAGE> 11
collapsed holes, the occurrence of any of which could result in personal
injuries, loss of life, environmental damage and other damage to the properties
of the Company or others. In addition, because the Company acquires interests in
under-developed oil and gas fields that have been operated by others for many
years, the Company may be liable for any damage or pollution caused by any prior
operations of such oil and gas fields. In accordance with customary industry
practice, the Company is not fully insured against these risks, nor are all such
risks insurable. Accordingly, there can be no assurance that such insurance as
the Company does maintain will be adequate to cover any losses or exposure for
liability.
Current Oil and Gas Industry Conditions
Historically, the markets for oil and natural gas have been volatile and are
likely to continue to be volatile in the future. Prices for oil and natural gas
are subject to wide fluctuation in response to relatively minor changes in
supply of and demand for oil and natural gas, market uncertainty and a variety
of additional factors that are beyond the control of the Company. These factors
include political conditions in the Middle East, the foreign supply of oil and
natural gas, the price of foreign imports, the level of consumer product demand,
weather conditions, domestic and foreign government regulations, the price and
availability of alternative fuels and overall economic conditions. Lower oil
prices also may reduce the amount of the Company's oil that is economic to
produce. In addition, the marketability of the Company's production depends upon
the availability and capacity of gathering systems and pipelines.
Government Regulation; Environmental Risks
The Company's business is regulated by certain federal, state, local and foreign
laws and regulations relating to the development, production, marketing and
transmission of oil and gas, as well as environmental and safety matters. There
can be no assurance that laws and regulations enacted in the future will not
adversely affect the Company's exploration for, or the production and marketing
of, oil and gas.
Oil and gas operations are subject to extensive foreign, federal, state and
local laws regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment. Numerous governmental
departments issue rules and regulations to implement and enforce such laws which
are often difficult and costly to comply with and which carry substantial
penalties for failure to comply. The regulatory burden on the oil and gas
industry increases its cost of doing business and consequently affects its
profitability. These laws, rules and regulations affect the operations of the
Company. Compliance with environmental requirements generally could have a
material adverse effect upon the capital expenditures, earnings or competitive
position of the Company.
Competition
The oil and gas exploration and production business is highly competitive. A
large number of companies and individuals engage in the drilling for oil and
gas, and there is a high degree of competition for desirable oil and gas
properties suitable for drilling and for materials and third-party services
essential for their exploration and development. Many of the Company's
competitors have greater financial and other resources than does the Company.
RECENT DEVELOPMENTS
On September 20, 1996, the Company signed an agreement with Crestone Energy
Corporation ("Crestone"), a privately held corporation headquartered in Denver,
Colorado, which provides for the acquisition of Crestone by the Company in a
stock transaction. If the merger is approved by the Crestone stockholders, the
Company will issue one share of its common stock for each seven outstanding
shares of Crestone common stock which will result in the issuance of
approximately 735,700 shares of the Company's common stock. Upon consummation,
approximately 28.4 million shares of the Company's common stock will be
outstanding after such issuance.
9
<PAGE> 12
Provided that the merger is approved by Crestone's stockholders, the Company
anticipates that the transaction will be completed during the fourth quarter of
1996. There can be no assurance that the transaction will be consummated.
Crestone Energy Corporation's primary asset is a large undeveloped acreage
position in the South China Sea, under a Petroleum Contract with the China
National Offshore Oil Corporation (CNOOC) for an area known as Wan'an Bei,
WAB-21. The WAB-21 Contract covers approximately six million acres, with an
option for another one million acres under certain circumstances, and lies
within an area which is the subject of a territorial dispute between The
People's Republic of China and Vietnam. Vietnam has also executed an agreement
on a portion of the same offshore acreage with Conoco, a unit of DuPont
Corporation. The territorial dispute has existed for many years, and there has
been limited exploration and no development activity in the area under dispute.
It is uncertain when or how this dispute will be resolved, and under what terms
the various countries and parties to the agreements may participate in the
resolution, although certain proposed economic solutions currently under
discussion would result in Crestone's interest being reduced.
The WAB-21 Contract requires certain seismic survey activities to occur by May
1997. If such activities are not completed, the contract is subject to
cancellation. Because of the territorial dispute, no such activities have
occurred by Crestone and may not occur by May 1997. CNOOC has indicated in
writing a willingness to extend the seismic operation deadline for two years
because of the lack of resolution of the territorial dispute and has furnished
Crestone a letter wherein CNOOC has extended such deadline for an additional
period through June 1, 1999. There can be no assurance that the dispute will be
resolved within the period of this or any further extension. Additionally, the
WAB-21 Contract may be in a state of technical default because Crestone has not
registered to do business in China, and there has been no written waiver of such
default, although CNOOC has acknowledged that such a waiver is necessary.
Exploration and development of the area will require substantial capital
expenditures which Benton cannot provide from its cash flow from current
operations. Benton expects that it will be necessary to raise additional funds
from joint ventures or the sale of additional debt or equity or other
arrangements which may reduce its interest in the WAB-21 Contract. There can be
no assurance that such joint ventures can be formed or such funds can be raised
or such other arrangements made on terms acceptable to Benton.
There have been limited exploration activities in the WAB-21 Contract area.
There can be no assurance that oil or natural gas can be commercially produced
from the area. Natural gas is in plentiful supply in the region and currently
there is no ready market for additional natural gas supplies. Crestone will be a
wholly-owned subsidiary of the Company and will continue as the operator and
contractor of WAB-21.
10
<PAGE> 13
USE OF PROCEEDS
Assuming all of the Warrants and Options are exercised, the Company will receive
an aggregate of $3,630,035 which it will use for general working capital
purposes. The Company will receive no proceeds from the resale of Common Stock
by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth information as of November 27, 1996 with respect
to the beneficial ownership of Common Stock by the Selling Stockholders:
<TABLE>
<CAPTION>
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
NAME OF SELLING SHARES OF COMMON SHARES TO SHARES OF PERCENTAGE OF
STOCKHOLDER STOCK OWNED PRIOR BE SOLD PURSUANT COMMON STOCK TO SHARES TO BE
TO OFFERING HERETO BE OWNED AFTER OWNED AFTER
OFFERING OFFERING
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Alfred Albiston 316(1) 316 0 *
Jollie N. Allen 475(2) 475 0 *
Richard M. Allen 158(3) 158 0 *
Harold E. Anderson 3,000(4) 3,000 0 *
Alfred Baalas 5,000(5) 2,000 3,000 *
George W. Baird 919(6) 517 402 *
Frederick G. Bauling 406(1) 316 90 *
Daniel B. Bias 203(3) 158 45 *
Glenn L. Beichley 203(3) 158 45 *
James H. Blake 17,047(5) 2,000 15,047 *
Nicholas G. Blurton-Jones 406 316 90 *
Andrew P. Bodnar 2,390(7) 2,390 0 *
James and Margot Bourque 3,237(5) 2,000 1,237 *
Edward R. Bower, TTEE Bower Family Trust 3,658(8) 2,848 810 *
Steve and Betty Bordner 406(1) 316 90 *
Paul Brinkman 2,066(9) 1,796 270 *
Eugene B. Brownell, TTEE 316(1) 316 0 *
Penelope Brownell 316(1) 316 0 *
Steven L. Burks 2,230(10) 2,230 0 *
Rob Burns 393(11) 393 0 *
James C. Cade 2,336(9) 1,796 540 *
Peter J. and Donna J. Cantelon 950 950 0 *
Casserly, Janice and Olivas, Richard, TTEEs 4,000(12) 4,000 0 *
Cavlogix 750(13) 750 0 *
James R. Chadwick 17,000(5) 2,000 15,000 *
Frances A. Chapman 6,000(19) 1,000 5,000 *
Juan Francisco Clerico 100,000(14) 100,000 0 *
Corporate Securities Group 1,586(15) 1,586 0 *
Crowell Weedon & Co. 6,475(16) 247 6,228 *
Thomas Timothy Cullum 2,231(17) 2,231 0 *
Cumberland Associates 505,000(18) 5,000 500,000 *
Haig Davidian 105,000(46) 5,000 100,000 *
Jerry P. Davidian 22,500(52) 20,000 2,500 *
Marc H. Davidian 25,000(52) 20,000 5,000 *
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
NAME OF SELLING SHARES OF COMMON SHARES TO SHARES OF PERCENTAGE OF
STOCKHOLDER STOCK OWNED PRIOR BE SOLD PURSUANT COMMON STOCK TO SHARES TO BE
TO OFFERING HERETO BE OWNED AFTER OWNED AFTER
OFFERING OFFERING
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C>
Mahendra Defonseka 1,162(19) 1,000 162 *
Vassily Dobrynin 3,000(20) 3,000 0 *
Sam Dote 475(2) 475 0 *
David Dowgialo 17,932(21) 632 17,300 *
Robert E. Duncan, TTEE Duncan Family 70,664(22) 4,230 66,434 *
Trust
Donald R. and Margaret A. Durling 2,000(5) 2,000 0 *
Marital Trust Part B of the L.S. & V.S. Eaton 66,044(22) 4,230 61,814 *
Rev. Trust
Karl T. and Helen J. Edwards 610(2) 475 135 *
Lawrence and Lucille Elsbernd 655 155 500 *
Marlyn N. Ely 950(23) 950 0 *
Joe B. Fields, TTEE Fields Family Trust 34,856(22) 4,230 30,626 *
First Associated Securities 965(24) 965 0 *
Ronald E. Foltz 1,500(25) 1,500 0 *
Joan Forester 1,000(19) 1,000 0 *
Frank B. Foster 610(2) 475 135 *
Elmer and Nancy Fox, TTEEs 1,000(19) 1,000 0 *
Fox & Company 500(29) 500 0 *
GBS Financial Corp. 242(26) 242 0 *
Leon L. Gean 406(1) 316 90 *
Cyma E. Gillilan 406(1) 316 90 *
Goldman, Sachs & Co. 3,975(27) 3,975 0 *
Hamill - Wheaton Partners 2,355(28) 2,285 70 *
Edward Hafer 1,500(25) 1,500 0 *
Paul H. Hauge 500(29) 500 0 *
Richard E. Haymond 406(1) 316 90 *
John V. Helmann 2,004(30) 2,004 0 *
Gerald Hendricks 4,000(19) 1,000 3,000 *
Tony and Karen Hernandez 2,500(31) 2,500 0 *
Charles E. Hicks 316(1) 316 0 *
George T.E. Hicks 1,500 1,500 0 *
Darol Hoffman 61,230(22) 4,230 57,000 *
Stephen L. Hoog, LTC 1,900(25) 1,500 400 *
Helen Hosler 158(3) 158 0 *
John T. Huey 1,000(19) 1,000 0 *
George L. and Peggy W. Hunt 2,562(19) 1,000 1,562 *
David Davidson, TTEE Jendresen Trust "B" 13,632(19) 1,000 12,632 *
Clifford and Alva Johnson, TTEEs 4,230(22) 4,230 0 *
Gerald and Betty Johnson, TTEEs 1,593(32) 1,558 35 *
Kavanaugh Financial 308(33) 308 0 *
Keane Securities Co., Inc. 1,800(34) 1,800 0 *
Kingsley & Co. 50(35) 50 0 *
Morton Kirchenbaum 2,500(31) 2,500 0 *
Pete and Marilyn Koonce 9,724(36) 2,174 7,550 *
Evgeny Kramar 3,000(20) 3,000 0 *
William Kronen 608(37) 608 0 *
Iosif Levinson 10,000(38) 10,000 0 *
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
NAME OF SELLING SHARES OF COMMON SHARES TO SHARES OF PERCENTAGE OF
STOCKHOLDER STOCK OWNED PRIOR BE SOLD PURSUANT COMMON STOCK TO SHARES TO BE
TO OFFERING HERETO BE OWNED AFTER OWNED AFTER
OFFERING OFFERING
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C>
Roger C. Lind 633(39) 633 0 *
Linsco/Private Ledger Corp. 3,047(40) 1,069 1,978 *
Steven A. Lopate 2,000 2,000 0 *
Jane L. McKee 316(1) 316 0 *
Laurel C. and Martha M. Meade 2,111(41) 2,111 0 *
James A. Meisel 813(39) 633 180 *
William Morrill 467(1) 316 151 *
Kenneth Press Nemzer and Marilyn Levin 2,500(31) 2,500 0 *
Nemzer
Paul Nicholson 1,692(42) 1,692 0 *
Boris Nikulin 3,000(20) 3,000 0 *
Robert and Rebecca Oehlman 1,250(19) 1,000 250 *
Irving Oschin 3,166(43) 3,166 0 *
John O. Parsons 406(1) 316 90 *
Peacock, Hislop, Staley and Given, Inc. 5,237(44) 5,183 54 *
Gordon W. and Myra L. Peterson 4,862(19) 1,000 3,862 *
Mona K. Pinne 950(23) 950 0 *
Alexandr Porsov 47,500(45) 47,500 0 *
Orlin John Rajala 500(29) 500 0 *
Guy G. Reine 2,000(5) 2,000 0 *
Robert S. Rich 475(2) 475 0 *
Leonard Ross 28,100(52)(47) 25,580 2,520 *
Morrison Rutherford, M.D. 316 316 0 *
San Diego Pinecone, Ltd. 301 301 0 *
Richard Sandow 2,231(17) 2,231 0 *
Jeffrey Barnes, TTEE Scheidts Trust 4,007(48) 4,007 0 *
John J. Sexton 389(49) 389 0 *
Harold S. Shanbaum 67(50) 67 0 *
Dimitri Sharov 15,000(51) 15,000 0 *
Signal Securities, Inc. 1,398 1,398 0 *
Kenneth S. Souza 2,880 (53) 1,651 1,229 *
John R. Stahr, TTEE 10,696(54) 7,230 3,466 *
D. Stuart Steele, M.D. and Richard Steele, 2,000(5) 2,000 0 *
TTEES
Lanny D. Stout 2,715 2,715 0 *
Elizabeth Suskind 3,643(55) 35 3,608 *
Fred S. and Mary W. Taylor 2,000(5) 2,000 0 *
Titan Value Equities Group 4,689(56) 304 4,385 *
Toluca Pacific Securities 335(57) 335 0 *
Rene Tornare 1,500(25) 1,500 0 *
U.S. Securities Clearing Corp. 232(58) 232 0 *
Vinccler, C.A. 208,000(59) 8,000 200,000 *
Abraham G. and Juliana G. van den Broek 1,266(60) 1,266 0 *
H.G. and B.E. von Dallwitz 4,364(23) 950 3,414 *
William R. Wagner 203(3) 158 45 *
David Wang 203(3) 158 45 *
John Weil 200(61) 47 153 *
Martin J. Welch 633(39) 633 0 *
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
NAME OF SELLING SHARES OF COMMON SHARES TO SHARES OF PERCENTAGE OF
STOCKHOLDER STOCK OWNED PRIOR BE SOLD PURSUANT COMMON STOCK TO SHARES TO BE
TO OFFERING HERETO BE OWNED AFTER OWNED AFTER
OFFERING OFFERING
- ------------------------------------------------- ------------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C>
Western Pacific Securities 1,663(62) 1,663 0 *
Windsor Partners 2,300(63) 2,300 0 *
Norman W.O. Yee 500(29) 500 0 *
<FN>
* Less than 1%
(1) Includes 316 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(2) Includes 475 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(3) Includes 158 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(4) Includes 3,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(5) Includes 2,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(6) Includes 517 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(7) Includes 2,390 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(8) Includes 2,848 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(9) Includes 1,796 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(10) Includes 2,230 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(11) Includes 393 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(12) Includes 4,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(13) Includes 750 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(14) Includes 100,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date
hereof.
(15) Includes 1,586 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(16) Includes 150 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(17) Includes 2,231 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(18) Includes 5,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(19) Includes 1,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(20) Includes 3,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date hereof.
(21) Includes 632 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(22) Includes 4, 230 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
</TABLE>
14
<PAGE> 17
<TABLE>
<S> <C>
(23) Includes 950 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(24) Includes 965 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(25) Includes 1,500 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(26) Includes 242 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(27) Includes 3,975 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(28) Includes 2,285 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(29) Includes 500 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(30) Includes 2,004 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(31) Includes 2, 500 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(32) Includes 1,558 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(33) Includes 308 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(34) Includes 1,800 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(35) Includes 50 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(36) Includes 2,174 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(37) Includes 608 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(38) Includes 10,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date
hereof.
(39) Includes 633 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(40) Includes 1,069 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(41) Includes 2,111 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(42) Includes 1,692 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(43) Includes 3,166 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(44) Includes 5,183 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(45) Includes 47,500 shares subject to options which are currently exercisable or exercisable within 60 days of the date
hereof.
(46) Includes 5,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date hereof.
(47) Includes 5,580 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(48) Includes 4,007 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(49) Includes 389 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
<S> <C>
(50) Includes 67 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(51) Includes 15,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date
hereof.
(52) Includes 20,000 shares subject to options which are currently exercisable or exercisable within 60 days of the date
hereof.
(53) Includes 1,651 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(54) Includes 7,230 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(55) Includes 35 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(56) Includes 304 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(57) Includes 335 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(58) Includes 232 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(59) Includes 8,000 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(60) Includes 1,266 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(61) Includes 47 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date hereof.
(62) Includes 1,663 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
(63) Includes 2,300 shares subject to warrants which are currently exercisable or exercisable within 60 days of the date
hereof.
</TABLE>
16
<PAGE> 19
DESCRIPTION OF WARRANTS
Of the Shares offered hereby, 3,511 shares were issued upon exercise of Warrants
and 24,798 shares will be issued upon the exercise of Warrants which were issued
to brokers as additional compensation in connection with an offering in January
1992. The Company issued Warrants to purchase an aggregate of 29,841 shares of
Common Stock, with an exercise price of $12.03 per share. These Warrants were
not exercisable until one year following the date of issuance and expire January
3, 1997.
Of the Shares offered hereby, 33,734 shares are issuable upon the exercise of
Warrants which were issued to investors who participated in the Chalkley
prospect. The Company issued Warrants to purchase an aggregate of 33,734 shares
of Common Stock in February 1992 with an exercise price of $15.19 per share.
These Warrants expire February 28, 1997.
Of the Shares offered hereby, 3,384 shares are issuable upon the exercise of
Warrants which were issued to brokers who participated in the Chalkley prospect
selling effort. The Company issued Warrants to purchase an aggregate of 3,384
shares of Common Stock in February 1992, with an exercise price of $9.00 per
share. These Warrants expire February 28, 1997.
Of the Shares offered hereby, 1,737 shares were issued upon exercise of Warrants
and 21,044 shares will be issued upon the exercise of Warrants which were issued
to certain persons in connection with the acquisition of property. The Company
issued Warrants to purchase an aggregate of 24,998 shares of its Common Stock in
February 1992, with an exercise price of $9.00 per share. These Warrants expire
February 12, 1997.
Of the Shares offered hereby, 2,000 shares were issued upon exercise of Warrants
and 47,500 shares will be issued upon the exercise of Warrants which were issued
to investors in the Benton Oil & Gas 1989-3 Drilling Program and the Benton Oil
& Gas 1990-1 Drilling Program. These Warrants were issued to investors in these
partnerships upon dissolution of such partnerships in October 1992. The Company
issued Warrants to purchase an aggregate of 530,258 shares of the Company's
Common Stock with an exercise price of $10.00 per share. The Warrants were not
exercisable until October 1993 and expire October 30, 1997.
Of the Shares offered hereby, 8,000 shares will be issuable upon exercise of
Warrants which were issued to a Company consultant in connection with the
Venezuelan operations in July 1994. The Company issued Warrants to purchase an
aggregate of 150,000 shares of its Common Stock at an exercise price of $7.50
per share. These Warrants expire on July 15, 2004.
Of the Shares offered hereby, 1,000 shares were issued upon the exercise of
Warrants and 29,900 shares will be issued upon the exercise of Warrants which
were issued to brokers as additional compensation in connection with the 8%
Debenture Offering in May 1992. The Company issued Warrants to purchase an
aggregate of 31,400 shares of Common Stock, with an exercise price of $10.297
per share. These Warrants were not exercisable until one year following the date
of issuance and expire April 22, 1997.
DESCRIPTION OF OPTIONS
Of the Shares offered hereby, 246,500 shares will be issued upon the exercise of
certain Options granted by the Company. The Company has granted Options to six
individuals in consideration of services rendered in connection with the
Company's Russian operations and to certain consultants of the Company (certain
of these Options were subsequently transferred). The Options vest pursuant to a
vesting schedule set forth in the stock option agreements. On the date hereof,
all Options granted to these advisors are exercisable at a price ranging from
$7.875 per share to $10.875 per share. The Options expire beginning January 2002
through September 2005.
17
<PAGE> 20
Of the Shares offered hereby, 1,500 shares were issued in connection with the
exercise of Options issued to an advisor of the Company in July 1992. These
Options were exercisable at a price of $7.30 per share.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders, or by the
pledgees, transferees or other successors in interest. Such sales may be made on
The New York Stock Exchange, in the over-the-counter market, or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The Shares may be sold by one or
more of the following: (a) block trades (which may include crosses) in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) exchange
transactions in accordance with the rules of such exchange; (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (e) secondary distributions. In effecting sales, brokers or dealers engaged
by the Selling Stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers participating in such sales may receive
commissions, discounts or concessions from the Selling Stockholders or
purchasers for whom they may act as agent or to whom they sell as principal, or
both, in amounts to be negotiated immediately prior to the sale and which are
not expected to exceed those customary in the type of transactions involved.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters' within the meaning of the Act in connection with
such sales, and any commissions, discounts, concessions or profits received by
them may be deemed to be underwriting compensation under the Act.
All fees and expenses of registration of the Shares, estimated to be
approximately $15,000, shall be borne by the Company. Normal commission expenses
and brokerage fees, as well as the fees of counsel to the Selling Stockholders,
and any applicable transfer taxes, are payable individually by the Selling
Stockholders.
There is no assurances that the Selling Stockholders will sell any or all of the
Shares offered hereby. The Company has agreed to maintain the effectiveness of
the Registration Statement of which this Prospectus is a part until the earlier
of the date on which all Shares have been sold by the Selling Stockholders, or a
period of not less than two years from the date hereof.
LEGAL MATTERS
The legality of the securities offered hereby is being passed upon by Emens,
Kegler, Brown, Hill and Ritter Co., L.P.A., Columbus, Ohio.
EXPERTS
The financial statements incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The information appearing herein or incorporated herein with respect to proved
oil and gas reserves of the Company at December 31, 1994 and 1995, to the extent
stated herein, was estimated by the Company and audited by Huddleston & Co.,
Inc., independent petroleum engineers, and is included herein on the authority
of such firm as experts in petroleum engineering.
18
<PAGE> 21
GLOSSARY
When the following terms are used in the text they have the meanings indicated.
MCF. "Mcf" means thousand cubic feet. "MMcf" means million cubic feet. "Bcf"
means billion cubic feet. "Tcf" means trillion cubic feet.
BBL. "Bbl" means barrel. "MBbl" means thousand barrels. "MMBbl" means million
barrels. "BBbl" means billion barrels.
BOE. "BOE" means barrels of oil equivalent, which are determined using the ratio
of one barrel of crude oil, condensate or natural gas liquids to six Mcf of
natural gas so that six Mcf of natural gas is referred to as one barrel of oil
equivalent or "BOE." "MBOE" means thousands of barrels of oil equivalent.
"MMBOE" means millions of barrels of oil equivalent.
CAPITAL EXPENDITURES. "Capital Expenditures" means costs associated with
exploratory and development drilling (including exploratory dry holes);
leasehold acquisitions; seismic data acquisitions; geological, geophysical and
land-related overhead expenditures; delay rentals; producing property
acquisitions; and other miscellaneous capital expenditures.
COMPLETION COSTS. "Completion Costs" means, as to any well, all those costs
incurred after the decision to complete the well as a producing well. Generally,
these costs include all costs, liabilities and expenses, whether tangible or
intangible, necessary to complete a well and bring it into production, including
installation of service equipment, tanks, and other materials necessary to
enable the well to deliver production.
DEVELOPMENT WELL. A "Development Well" is a well drilled as an additional well
to the same reservoir as other producing wells on a lease, or drilled on an
offset lease not more than one location away from a well producing from the same
reservoir.
EXPLORATORY WELL. An "Exploratory Well" is a well drilled in search of a new and
as yet undiscovered pool of oil or gas, or to extend the limits of a field under
development.
FINDING COST. "Finding Cost," expressed in dollars per BOE, is calculated by
dividing the amount of total capital expenditures incurred related to
acquisitions, exploration and development costs (reduced by proceeds from any
sale of oil and gas properties) by the amount of total net reserves added or
reduced as a result of property acquisitions and sales, drilling activities and
reserve revisions during the same period.
FUTURE DEVELOPMENT COST. "Future Development Cost" of proved non-producing
reserves, expressed in dollars per BOE, is calculated by dividing the amount of
future capital expenditures related to development properties by the amount of
total proved non-producing reserves associated with such activities.
GROSS ACRES OR WELLS "Gross Acres or Wells" are the total acres or wells, as the
case may be, in which an entity has an interest, either directly or through an
affiliate.
LIFTING COSTS. "Lifting Costs" are the expenses of lifting oil from a producing
formation to the surface, consisting of the costs incurred to operate and
maintain wells and related equipment and facilities, including labor cots,
repair and maintenance, supplies, insurance, production, severance and windfall
profit taxes.
MMBTU. "MMBtu" means one million British thermal units. A British thermal unit
is the amount of heat needed to raise the temperature of one pound of water one
degree Fahrenheit.
NET ACRES OR WELLS. A party's "Net Acres" or "Net Wells" are calculated by
multiplying the number of gross acres or gross wells in which that party has an
interest by the fractional interest of the party in each such acre or well.
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<PAGE> 22
OIL AND GAS LEASE. An "Oil and Gas Lease" is an agreement whereby the grantee
receives for a period of time the full or partial interest in oil and gas
properties, oil and gas mineral rights, fee rights, or other rights of the
grantor granting the grantee the right to drill for, produce and sell oil and
gas upon payment of rentals, bonuses and/or royalties. Oil and Gas Leases are
generally acquired from private landowners and federal and state governments.
PRODUCING PROPERTIES OR RESERVES. "Producing Reserves" are Proved Developed
Reserves expected to be produced from existing completion intervals now open for
production in existing wells. "Producing Properties" are properties to which
Producing Reserves have been assigned by an independent petroleum engineer.
PROVED DEVELOPED BEHIND-PIPE RESERVES. "Proved Developed Behind-Pipe Reserves"
are reserves contained in geological formations through which an existing well
has been drilled but from which the well has not yet produced. The reserves are
said to be "behind pipe" because the oil and gas are sealed out of the well bore
by the casing leading to the existing completion interval. Behind-Pipe Reserves
are classified as Proved Developed only if the cost of completing the well for
production of such reserves is relatively small compared to the cost of a new
well.
PROVED DEVELOPED RESERVES. "Proved Developed Reserves" are Proved Reserves which
can be expected to be recovered through existing wells with existing equipment
and operating methods.
PROVED RESERVES. "Proved Reserves" are the estimated quantities of crude oil,
natural gas and natural gas liquids which geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years known
oil and gas reservoirs under existing economic and operating conditions, that
is, on the basis of prices and costs as of the date the estimate is made and any
price changes provided for by existing conditions.
PROVED UNDEVELOPED RESERVES. "Proved Undeveloped Reserves" are Proved Reserves
which can be expected to be recovered from new wells on undrilled acreage, or
from existing wells where a relatively major expenditure is required for
recompletion.
RESERVES. "Reserves" means crude oil and natural gas, condensate and natural gas
liquids, which are net of leasehold burdens, are stated on a net revenue
interest basis, and are found to be commercially recoverable.
ROYALTY INTEREST. A "Royalty Interest" is an interest in oil and gas property
entitling the owner to a share of oil and gas production (or the proceeds of the
sale thereof) free of the costs of production.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS, BEFORE PROVISION FOR
INCOME TAXES. The "Standardized Measure of Discounted Future Net Cash Flows,
Before Provision for Income Taxes" is a method of determining the present value
of Proved Reserves. Future net revenues from Proved Reserves are estimated
assuming that oil and gas prices and production and development costs remain
constant. The resulting stream of revenues, before provision for income taxes,
is then discounted at the rate of 10% per year to obtain a present value.
3-D SEISMIC. "3-D Seismic" is the method by which a three dimensional image of
the earth's subsurface is created through the interpretation of aerially
collected seismic data. 3-D surveys allow for a more detailed understanding of
the subsurface than do conventional surveys and contribute significantly to
field appraisal, development and production.
UNDEVELOPED ACREAGE. "Undeveloped Acreage" is oil and gas acreage (including, in
applicable instances, rights in one or more horizons which may be penetrated by
existing wellbores, but which have not been tested) to which Proved Reserves
have not been assigned by independent petroleum engineers.
WORKING INTEREST. A "Working Interest" is the operating interest under an Oil
and Gas Lease which gives the owner the right to drill, produce and conduct
operating activities on the property and a share of production, subject
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<PAGE> 23
to all royalties, overriding royalties and other burdens and to all costs of
exploration, development and operations and all risks in connection therewith.
In this Prospectus, natural gas volumes are stated at the legal pressure base of
the state or area in which the reserves are located at 60 degrees Fahrenheit.
21
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
discounts) are estimated to be as follows:
SEC filing fee $1,176
Printing and engraving 2,000
Accounting fees and expenses 2,000
Legal fees and expenses 8,000
Miscellaneous 1,824
Total $15,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under provisions of the Certificate of Incorporation and Bylaws of the Company,
each person who is or was a director or officer of the Company shall be
indemnified by the Company as a matter of right to the full extent permitted or
authorized by law. The effects of the Certificate of Incorporation, Bylaws and
General Corporation Law of Delaware may be summarized as follows:
(a) Under Delaware law, to the extent that such a person is successful
on the merits in defense of a suit or proceeding brought against him by reason
of the fact that he is a director or officer of the Company, he shall be
indemnified against expenses (including attorneys' fees) reasonably incurred in
connection with such action.
(b) If unsuccessful in defense of a third-party civil suit or criminal
suit, or if such a suit is settled, such a person shall be indemnified under
such law against both (1) expenses (including attorneys' fees) and (2)
judgments, fines and amounts paid in settlement if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Company, and with respect to any criminal action, had no reasonable cause
to believe his conduct was unlawful.
(c) If unsuccessful in defense of a suit brought by or in the right of
the Company, or if such suit is settled, such a person shall be indemnified
under such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such person is adjudged to be liable in a suit in the
performance of his duty to the Company, he cannot be made whole even for
expenses unless the court determines that he is fairly and reasonably entitled
to indemnity for such expenses.
(d) The Company may not indemnify a person in respect of a proceeding
described in (b) or (c) above unless it is determined that indemnification is
permissible because the person has met the prescribed standard of conduct by any
one of the following: (i) the Board of Directors, by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding, (ii) if
quorum of directors not parties to the proceeding cannot be obtained, or, if
obtainable but the quorum so directs, by independent legal counsel selected by
the Board of Directors or the committee thereof; or (iii) by the stockholders.
ITEM 16. EXHIBITS
(a) Exhibits
4.1 Form of Warrant Agreement for broker warrants issued in January
1992.
4.2 Form of Warrant Agreement for warrants issued to investors in
February 1992.
22
<PAGE> 25
4.3 Form of Warrant Agreement for warrants issued to brokers in February
1992.
4.4 Form of Warrant Agreement for warrants issued in connection with
the property acquisition in February 1992.
4.5 Form of Warrant Agreement for warrants issued in July 1992.
4.6 Form of Warrant Agreement for warrants issued in October 1992.
4.7 Form of Warrant Agreement for warrants issued in July 1994.
4.8 Form of Warrant Agreement for warrants issued in May 1992.
4.9 Form of Option Agreement.
5.1 Opinion of Emens, Kegler, Brown, Hill & Ritter Co., L.P.A. regarding
validity of the Securities.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Emens, Kegler, Brown, Hill & Ritter Co., L.P.A. (included
in exhibit 5.1).
23.3 Consent of Huddleston & Co., Inc.
24.1 Power of Attorney (contained in signature page).
- --------------
(b) Financial Statements Schedules.
All schedules have been omitted because the required information is
not significant, or is included in the financial statements or the notes thereto
or is not applicable.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of the securities offered would not exceed that which
was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the
form of Prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
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<PAGE> 26
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
24
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carpinteria, State of California, on the 27th day of
November, 1996.
BENTON OIL AND GAS COMPANY
By: /s/ A.E. Benton
-------------------------------------
A. E. Benton, Chief Executive Officer
Each person whose signature appears below appoints A.E. Benton, Michael B. Wray,
Gregory S. Grabar, Jack A. Bjerke and Amy M. Shepherd, and all five of them, any
of whom may act without the joinder of the others, as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him, and in his stead, in any capacities to sign any and all amendments,
including post-effective amendments to this Registration Statement, and to file
the same, with all exhibits thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed on November 27, 1996 by the following
persons in the capacities indicated:
SIGNATURE TITLE
- --------- -----
/s/ A.E. Benton
- -----------------------------
A.E. Benton Chief Executive Officer and Director
/s/ Michael B. Wray
- -----------------------------
Michael B. Wray Principal Financial Officer and Director
/s/ Chris C. Hickok
- -----------------------------
Chris C. Hickok Principal Accounting Officer
/s/ Garrett A. Garrettson
- -----------------------------
Garrett A. Garrettson Director
/s/ William H. Gumma
- -----------------------------
William H. Gumma Director
/s/ Richard W. Fetzner
- -----------------------------
Richard W. Fetzner Director
/s/ Bruce M. McIntyre
- -----------------------------
Bruce M. McIntyre Director
25
<PAGE> 1
Exhibit 4.1
WARRANT AGREEMENT
BETWEEN
BENTON OIL AND GAS COMPANY
AND
DATED AS OF JANUARY __, 1992
<PAGE> 2
WARRANT AGREEMENT dated as of January ___, 1992, between Benton Oil and Gas
Company, a Delaware corporation (the "Company") and ____________________
("____________________").
WHEREAS, ________________ has agreed pursuant to the Underwriting Agreement
(the "Underwriting Agreement") dated January ___, 1992 to act as a selling
broker ("Selling Broker") in connection with the Company's proposed public
offering of up to 3,000,000 shares of Common Stock (the "Shares").
WHEREAS, the Company proposes to issue to ________________ as partial
compensation for its agreement to act as a Selling Broker pursuant to the
Underwriting Agreement, common stock purchase warrants (the "Warrants") to
purchase up to _________________ shares (the "Warrant Shares") of the Company's
Common Stock par value $.01 per share (the "Common Stock"), each Warrant
entitling the holder (the "Holder") thereof to purchase one share of Common
Stock.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein and in the Underwriting Agreement set forth and for other good and
valuable consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and
deliver the Warrants to ___________________, or to bona fide officers or
partners thereof designated by _________________, on the Closing Date referred
to in the Underwriting Agreement in consideration for, and as part of the
compensation to ________ in connection with _______ acting as a Selling Broker
pursuant to the Underwriting Agreement. The number of Warrants to be issued and
delivered shall be equal to ____________. No cash consideration will be paid by
______________ for the Warrants. The text of each Warrant, of the purchase form
and of each assignment form to be printed on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. The Warrants shall be
executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman of the Board, President, Treasurer or Vice
President of the Company, under its corporate seal, affixed or in facsimile,
attested by the manual or facsimile signature of the Secretary or an Assistant
Secretary of the Company. A Warrant bearing the manual signature of individuals
who were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them shall have ceased to hold
such offices prior to the delivery of such Warrant or did not hold such offices
on the date of this Agreement.
Warrants shall be dated as of the date of execution thereof by the Company
either upon initial issuance or upon division, exchange, substitution or
transfer.
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<PAGE> 3
The demand registration rights as set forth in Section 13 will expire no
later than five (5) years from the effective date of the offering of Shares.
2. REGISTRATION. The Warrants shall be numbered and shall be registered on
the books of the Company (the "Warrant Register") as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register (the "Holder") as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such facts that
its participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of __________________ in such denominations as
____________________ may request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
at the option of the holder thereof for another certificate or certificates of
different denominations entitling the Holder thereof to purchase upon surrender
to the Company or its duly authorized agent a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates, as the case may be,
as so requested. Any Warrant issued upon exchange, transfer or partial exercise
of the Warrants shall be the valid obligation of the Company, evidencing the
same generic rights and entitled to the same generic benefits under this
Agreement as the Warrants surrendered for such exchange, transfer or exercise.
4. RESTRICTIONS ON TRANSFER. Until January 4, 1993 (the "Restricted
Period"), the Warrants and the Warrant Shares may not be sold, transferred,
assigned or hypothecated except to __________________ or to individuals who are
bona fide officers or partners of __________________ or by operation of law. The
Warrants shall be transferable only on the Warrant Register upon delivery
thereof duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney,
2
<PAGE> 4
the original power of attorney, duly approved, or an official copy thereof, duly
certified, shall be deposited with the Company. In case of transfer by
executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be required
to be deposited with the Company in its discretion. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. Notwithstanding the foregoing and whether or not during the
Restricted Period, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person, unless the Holder of such Warrants shall
furnish to the Company evidence of compliance with the Securities Act of 1933,
as amended (the "Act"), in accordance with the provisions of Section 11 of this
Agreement.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the registered owner thereof to
purchase one share of Common Stock subject to adjustment in accordance
with Section 9 hereof at any time from 9:00 A.M., Los Angeles time, on
August 1, 1993 until 5:00 P.M., Los Angeles time, on January 3, 1997
(the "Expiration Date") at a purchase price of $__________ per share
(which such price shall not be less than 125% of the public offering
price of the Shares to be issued and sold by the Company pursuant to
the Agreement), subject to adjustment in accordance with Section 9
hereof (the "Warrant Price").
(b) The Warrant Price and the number of shares issuable upon
exercise of Warrants are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 9 of this
Agreement. Subject to the provisions of this Agreement, each Holder
shall have the right, which may be exercised as expressed in such
Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully paid and nonassessable shares
of Common Stock specified in such Warrants, upon surrender to the
Company, or its duly authorized agent, of such Warrants, with the
purchase form on the reverse thereof duly filled in and signed, and
upon payment to the Company of the Warrant Price, as adjusted in
accordance with the provisions of Section 9 of this Agreement, for the
number of shares in respect of which such Warrants are then exercised.
Payment of such Warrant Price may be made only in cash, by certified or
official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and (subject to receipt of
evidence of compliance with the Act in accordance with the provisions of Section
11 of
3
<PAGE> 5
this Agreement) in such name or names as the Holder may designate, a certificate
or certificates for the number of full shares of stock so purchased upon the
exercise of such Warrants, together with cash, as provided in Section 10 of this
Agreement, in respect of any fraction of a share of such stock otherwise
issuable upon such surrender. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares as of the date of the
surrender of such Warrants and payment of the Warrant price as aforesaid;
PROVIDED, HOWEVER, that if, at the time of surrender of the Warrant and payment
of such Warrant Price, the transfer books for the Common Stock or other class of
stock purchasable upon the exercise of the Warrants shall be closed, the
certificates for the shares in respect of which the warrants are then exercised
shall be issuable as of the date on which such books shall next be opened
whether before, on or after the Expiration Date and until such date the Company
shall be under no duty to deliver any certificate for such shares; PROVIDED,
FURTHER, however, that the transfer books shall not be closed at any one time
for a period longer than five days unless otherwise required by law. The rights
of purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that any Warrant is exercised in respect of less than all of the shares
purchasable on such exercise at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued.
5.1. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that if
any shares of Common Stock required to be reserved for purposes of exercise or
conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange, before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case may be, PROVIDED, HOWEVER, that in no event
shall such shares of Common Stock be issued, and the Company is hereby
authorized to suspend the exercise of all Warrants, for the period during which
such registration, approval or listing is required but not in effect.
6. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes, if
any, attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants and any securities issued pursuant to Section 9 hereof; 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 issue or
4
<PAGE> 6
delivery of any Warrants or certificates for Warrant Shares and any securities
issued pursuant to Section 9 hereof in a name other than that of the Holder of
such Warrants.
7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest; but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity or
bond, if requested, also reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF WARRANTS.
There have been reserved out of the authorized and unissued shares of Common
Stock, a number of shares sufficient to provide for the exercise of the rights
of purchase represented by the Warrants, and the transfer agent for the Common
Stock ("Transfer Agent") and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid are hereby irrevocably authorized and directed at all times
until the Expiration Date to reserve such number of authorized and unissued
shares as shall be requisite for such purpose. The Company will keep a copy of
this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be issuable as provided in Section
10 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section 9.3
hereof. All Warrants surrendered in the exercise of the rights thereby evidenced
shall be cancelled, and such cancelled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants (subject to adjustment as herein provided). No shares
of stock shall be subject to reservation in respect of the Warrants subsequent
to the Expiration Date except to the extent necessary to comply with the terms
of this Agreement.
5
<PAGE> 7
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as hereafter defined.
9.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable upon
the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification of its shares of Common
Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto
shall be adjusted so that the Holder of each Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of
the Company which he would have owned or have been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event
or any record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without any
charge to such holders, entitling them (for a period expiring within 60
days after the record date mentioned below) to subscribe for or
purchase shares of Common Stock at a price per share which is lower at
the record date mentioned below than the then current market price per
share of Common Stock (as determined in accordance with paragraph (e)
below), the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon exercise of each Warrant
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of additional shares of Common
Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock outstanding
on the
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<PAGE> 8
date of issuance of such rights, options or warrants plus the number
of shares which the aggregate offering price of the total number of
shares of common stock so offered would purchase at the current market
price per share of Common Stock at such record date. Such adjustment
shall be made whenever such rights, options or warrants are issued,
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options
or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of consolidated
earnings or earned surplus and dividends or distributions referred to
in paragraph (a) above or in the paragraph immediately following this
paragraph) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in
paragraph (b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined in accordance with paragraph (e) below) on
the date of such distribution, and of which the denominator shall be
the then current market price per share of Common Stock, less the then
fair value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive
such distribution.
In the event of distribution by the Company to all holders of
its shares of Common Stock of stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an
adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant, the Holder of each Warrant, upon the exercise
thereof at any time after such distribution, shall be entitled to
receive from the Company, such subsidiary or both, as the Company shall
determine, the stock or other securities to which such Holder would
have been entitled if such Holder had exercised such Warrant
immediately prior thereto regardless of whether the Warrants are
exercisable at such time, all subject to further adjustment as provided
in this subsection 9.1; PROVIDED, HOWEVER, that no
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<PAGE> 9
adjustment in respect of dividends or interest on such stock or other
securities shall be made during the term of a Warrant or upon the
exercise of a Warrant.
(d) In case the Company shall sell and issue shares of Common
Stock (other than pursuant to rights, options, warrants, or convertible
securities initially issued before the date of this Agreement) or
rights, options, warrants or convertible securities containing the
right to subscribe for or purchase shares of Common Stock (excluding
shares, rights, options, warrants or convertible securities issued in
any of the transactions described in paragraphs (a), (b) or (c) above)
at a price per share of Common Stock (determined, in the case of such
rights, options, warrants or convertible securities, by dividing (w)
the total of the amount received or receivable by the Company
(determined as provided below) in consideration of the sale and
issuance of such rights, options, warrants or convertible securities,
by (x) the total number of shares of Common Stock covered by such
rights, options, warrants or convertible securities) lower than the
then current market price per share of Common Stock (as determined in
accordance with paragraph (e) below) in effect immediately prior to
such sale and issuance, then the number of shares thereafter
purchasable upon the exercise of the Warrants shall be determined by
multiplying the number of shares theretofore purchasable upon exercise
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such shares,
rights, options, warrants or convertible securities plus the number of
additional shares of Common Stock sold or subject to issuance pursuant
to such rights, options, warrants or convertible securities, and of
which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such shares, rights, options,
warrants or convertible securities plus the number of shares of Common
Stock which the aggregate consideration received or receivable
(determined as provided below) for such sale or issuance would purchase
at such current market price per share. Such adjustment shall be made
successively whenever such an issuance is made. For the purposes of
such adjustments, the consideration received or receivable by the
Company for rights, options, warrants or convertible securities shall
be deemed to be the consideration received by the Company for such
right, options, warrants or convertible securities, plus the
consideration or premiums stated in such rights, options, warrants or
convertible securities to be paid for the shares of Common Stock
covered thereby. In case the Company shall sell and issue shares of
Common Stock, or rights, options, warrants or convertible securities
containing the right to subscribe for or purchase shares of Common
Stock, for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then in determining the
8
<PAGE> 10
"price per share of Common stock" and the "consideration received or
receivable by the Company" for purposes of the first sentence of this
paragraph (d), the Board of Directors shall determine, in its
discretion the fair value of said property, and such determination, if
made in good faith, shall be binding upon all Holders.
(e) For the purpose of any computation under paragraphs (b),
(c) and (d) of this Section, the current market price per share of
Common Stock at any date shall be the average of the daily closing
prices for 30 consecutive trading days commencing 45 trading days
before the date of such computation. The closing price for each day
shall be the last such reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the closing
bid and asked prices regular way for such day, in each case on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if not listed or admitted
to trading, the average of the closing bid and asked prices of the
Common Stock in the over-the-counter market as reported by NASDAQ or
any comparable system. In the absence of one or more such quotations,
the Board of Directors of the Company shall determine the current
market price, in good faith, on the basis of such quotations as it
considers appropriate. Notwithstanding the foregoing, for the purpose
of any calculation under paragraph (d) above (A) with respect to any
issuance of options under the Company's employee compensation stock
option plans as in effect or as adopted by the Board of Directors of
the Company on the date hereof, the term "current market price" in such
instances shall mean the fair market price on the date of the issuance
of any such option determined in accordance with the Company's employee
compensation stock option plans as in effect or as adopted by the Board
of Directors of the Company on the date hereof; and (B) with respect to
any issuances of Common Stock (or rights, options, warrants or
convertible securities containing the right to subscribe for or
purchase shares of Common Stock) in connection with bona fide corporate
transactions (other than issuances in such transactions for cash or
similar consideration), the term "fair market price" shall mean the
fair market price per share as determined in arm's-length negotiations
by the Company and such other parties (other than affiliates or
subsidiaries of the Company) to such transactions as reflected in the
definitive documentation with respect thereto, unless such
determination is not reasonably related to the closing market price on
the date of such determination.
(f) In any case in which this Section 9.1 shall require that
any adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the
9
<PAGE> 11
occurrence of the event the issuing to the Holder of any Warrant
exercised after that record date the shares of Common Stock and other
capital stock of the Company, if any, issuable upon the exercise over
and above the shares of Common Stock and other capital stock of the
Company, if any, issuable upon the exercise of any Warrant prior to
such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to
the holder a due bill or other appropriate instrument evidencing the
holder's right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
(g) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Warrant Shares purchasable upon the exercise of each Warrant; PROVIDED,
HOWEVER, that any adjustments which by reason of this paragraph (g) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(h) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant
Price payable upon the exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares purchasable immediately thereafter.
(i) No adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant need be made under paragraphs (b),
(c) and (d) if the Company issues or distributes to each Holder of
Warrants the rights, options, warrants, or convertible or exchangeable
securities, or evidences of indebtedness or assets referred to in those
paragraphs which each Holder of Warrants would have been entitled to
receive had the Warrants been exercised prior to the happening of such
event or the record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. No adjustment need
be made for a change in the par value of the Warrant Shares.
(j) For the purpose of this Section 9.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from par value
10
<PAGE> 12
to no par value, or from no par value to par value. In the event that
at any time, as a result of an adjustment made pursuant to paragraph
(a) above, the Holders shall become entitled to purchase any
securities of the Company other than shares of Common Stock,
thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Warrant Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in paragraphs (a) through (i), inclusive,
above, and the provisions of Section 5 and subsections 9.2 through
9.5, inclusive, with respect to the Warrant Shares, shall apply on
like terms to any such other securities.
(k) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (A) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (B) such shares of Common
Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or
conversion or exchange rights whether or not exercised; PROVIDED,
FURTHER, that no such readjustment shall have the effect of increasing
the Warrant Price or decreasing the number of shares of Common Stock
purchasable upon the exercise of each Warrant by an amount in excess of
the amount of the adjustment initially made with respect to the
issuance, sale or grant of such rights, options, warrants or conversion
or exchange rights.
9.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its option,
at any time during the term of the Warrants, reduce the then current Warrant
Price to any amount determined appropriate by the Board of Directors of the
Company.
9.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public accountants
selected by
11
<PAGE> 13
the Board of Directors of the Company (who may be the regular accountants
employed by the Company) setting forth the number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price of such Warrant Shares
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Such certificate, absent manifest error, shall be conclusive evidence of
the correctness of such adjustment.
9.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
9.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC. In
case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, transfer or
lease had such Warrant been exercised immediately prior to such action
regardless of whether the Warrants are exercisable at the time of such action;
PROVIDED, HOWEVER, that no adjustment in respect of dividends, interest or other
income on or from such shares or other securities and property shall be made
during the term of a Warrant or upon the exercise of a Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The provisions of
this Section 9.5 shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
9.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in the Warrant
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at
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<PAGE> 14
the same time by the same Holder, the number of full Warrant Shares which shall
be issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share would, except for the provisions
of this Section 10 be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to the closing
price for one share of the Common Stock, as determined in accordance with
paragraph (e) of Subsection 9.1, on the trading day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction.
11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. ______________________
represents and warrants to the Company that ________________________ will not
dispose of any such Warrants or Warrant Shares except pursuant to (i) an
effective registration statement, or (ii) an applicable exemption from
registration under the Securities Act of 1933 (the "Act"). In connection with
any sale by ____________________ pursuant to clause (ii) of the preceding
______________________ sentence, shall furnish to the Company an opinion of
counsel reasonably satisfactory to the Company to the effect that such exemption
from registration is available in connection with such sale.
12. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend by which each Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON
STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT, OR (II) AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933. ANY SALE PURSUANT TO CLAUSE (II) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE."
The Warrant Shares or other securities issued upon exercise of the Warrants
shall, unless issued pursuant to an effective Registration Statement, be subject
to a stop-transfer order and the certificate or certificates evidencing any such
Warrant Shares or securities shall bear the following legend by which the Holder
thereof shall be bound:
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<PAGE> 15
"THE SHARES OR OTHER SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT, OR (II) AN APPLICABLE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY SALE PURSUANT TO
CLAUSE (II) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL TO THE EFFECT THAT SUCH EXEMPTION FROM REGISTRATION
IS AVAILABLE IN CONNECTION WITH SUCH SALE."
13. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and agrees with
____________________ and any subsequent Holders of the Warrants and/or
Warrant Shares that within thirty (30) days after receipt of a written
request from ______________________, or from Holders of such percentage in
interest (not less than 25%) of the Warrants and/or Warrant Shares as
___________ shall designate in writing, that _____________________________,
or such designee or designees desire and intend to transfer all or a
portion of such securities (and any securities received by the Holders of
the Warrants pursuant to Section 9 hereof) under such circumstances that a
public offering within the meaning of Act would be involved, the Company
shall file a registration statement (and use its best efforts to cause such
registration statement to become effective under the Act) with respect to
the offering and sale or other disposition of such securities (including
any securities received by the Holders of the Warrants pursuant to Section
9 hereof) (all such securities, the "Offered Securities"). The Company
shall continuously maintain the effectiveness of such registration
statement for the lesser of (i) 180 days after the effective date of the
registration statement or (ii) the consummation of the distribution by the
Holders of the Offered Securities covered by such registration statement
(the "Termination Date"); provided, however, that if at the Termination
Date the Offered Securities are covered by a registration statement which
also covers other securities and which is required to remain in effect
beyond the Termination Date, the Company shall maintain in effect such
registration statement as it relates to the Offered Securities for so long
as such registration statement (or any subsequent registration statement)
remains or is required to remain in effect for any of such other
securities. The Company shall not include any securities other than the
Offered Securities in any such registration statement pursuant to any
"piggyback" or similar registration rights granted by the Company after the
date hereof without the consent of a majority in interest of the Holders of
the Offered Securities. The Company shall not be required to comply with
more than one request for registration
14
<PAGE> 16
pursuant to this Section 13(a) or to cause any such registration statement
to become effective prior to January 4, 1993 or to comply with a request
for registration pursuant to this paragraph (a) made after January 3, 1997,
PROVIDED, HOWEVER, that if a request is properly and timely made on or
prior to January 3, 1997 pursuant to this Section 13(a), the Company shall
be required to comply with such request even though the registration
statement does not or cannot become effective until after January 3, 1997
or the effectiveness of such registration statement is otherwise required
under this Section 13(a) to be maintained beyond January 3, 1997. All
expenses of such registration shall be borne by the Company, except that
underwriting commissions and expenses attributable to the Warrants and/or
Warrant Shares will be borne by such Holders requesting that such
securities be offered.
(b) PIGGY-BACK REGISTRATION RIGHTS. The Company covenants and agrees
with _________________ and any subsequent holders of the Warrants and/or
Warrant Shares that, in the event the Company proposes to file a
registration statement under the Act prior to January 4, 1999 with respect
to any class of security (other than in connection with an exchange offer
or a registration statement on Form S-4 or S-8 or other similar
registration statements not available to register securities so requested
to be included) which the Company believes will be or become effective at
any time on or after January 4, 1993, the Company shall in each case give
written notice of such proposed filing to (i) the holders of the Warrant
Shares and (ii) if on or before the Expiration Date, the holders of the
Warrants, in each case at least 30 days before the earlier of the
anticipated or the actual effective date of the registration statement and
at least ten days before the initial filing of such registration statement
and such notice shall offer to such Holders the opportunity to include in
such registration statement such number of Warrant Shares and/or Warrants
(and any securities received by the Holders of the Warrants pursuant to
Section 9 hereof) (all such securities, the "Piggy-back Securities", and
together with the Offered Securities, the "Registrable Securities") as they
may request. Holders desiring inclusion of Piggy-back Securities in such
registration statement shall so inform the Company by written notice, given
within 10 days of the giving of such notice by the Company in accordance
with the provisions of Section 15 hereof. The Company shall permit, or
shall cause the managing underwriter of a proposed offering to permit, the
Holders of Piggy-back Securities requested to be included in the
registration to include such securities in the proposed offering on the
same terms and conditions as applicable to securities of the Company, if
any, included therein for the account of any person other than the Company
and the Holders of Warrants and/or Warrant Shares. Notwithstanding the
foregoing, if any such managing
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<PAGE> 17
underwriter shall advise the Company in writing that, in its opinion, the
distribution of securities by holders thereof, including all or a portion
of the Piggy-back Securities, requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the
Company for its own account, then the Holders of such Warrants and/or
Warrant Shares shall delay their offering and sale of Piggy-back Securities
(or the portions thereof so designated by such managing underwriter) for
such period, not to exceed 120 days, as the managing underwriter shall
request, provided that if any other securities are included in such
registration statement for the account of any person other than the Company
and the Holders of Warrants and/or Warrant Shares, then such securities,
including the Warrants and/or Warrant Shares, so included shall be
apportioned among holders who wish to be included therein pro rata
according to amounts so requested to be included by each such person
provided, further, that if the holder of the Company's securities that have
been granted registration rights by the Company pursuant to a Registration
Rights Agreement dated as of May 31, 1991 (the "Partners Agreement") among
the Company, Shallow Waters Limited Partnership, West Cote Partners Limited
Partnership, Palace Exploration Company and Pelham, Inc. (together, the
"Partners") enforce, in the circumstances described in Section 2(b)
thereof, the right granted thereunder in Section 2(b) thereof to cause all
securities of the Company owned by other persons to be reduced before
securities of the Partners are reduced, then the Company shall (unless
objected to by the Partners and prohibited by the Partners Agreement)
reduce the number of securities it is seeking registration of in such
amount equal to the number the Holders of the Piggy-back Securities would
have been required to reduce but for the provisions of this proviso and
register such amount of Piggy-back Securities. No such delay shall in any
event impair any right granted hereunder to make subsequent requests for
inclusion pursuant to the terms of this Section 13(b). The Company shall
continuously maintain in effect any registration statement on Form S-3 with
respect to which the Piggy-back Securities have been requested to be
included (and so included) for a period of not less than (i) 180 days after
the effectiveness of such registration statement or (ii) the consummation
of the distribution by the Holders of the Piggy-back Securities
("Piggy-back Termination Date"); PROVIDED, HOWEVER, that if at the
Piggy-back Termination Date the Piggy-back Securities are covered by a
registration statement which is, or is required to remain, in effect beyond
the Piggy-back Termination Date, the Company shall maintain in effect the
registration statement as it relates to the Piggy-back Securities for so
long as such registration statement remains or is required to remain in
effect for any of such other
16
<PAGE> 18
securities. All expenses of such registration shall be borne by the
Company, except that underwriting commissions and expenses attributable to
the Warrants and/or Warrant Shares and fees and disbursements of counsel
(if any) to the Holders requesting that such Warrants and/or Warrant Shares
be offered will be borne by such Holders.
(c) OTHER MATTERS. In connection with the registration of Registerable
Securities in accordance with Paragraph (a) or (b) above, the Company
agrees to:
i) Use its best efforts to register or qualify the
Registrable Securities for offer or sale under state
securities or Blue Sky laws of such jurisdictions in which the
Holders of such Warrants and/or Warrant Shares shall
designate; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action which would
subject it to general service of process in any jurisdiction
where it is not now so subject, and use its best efforts to do
any and all other acts and things which may be necessary or
advisable to enable the holders to consummate the sale,
transfer or other disposition of such securities in any
jurisdiction;
ii) Enter into indemnity and contribution agreements,
each in customary form, with each underwriter, if any, and
each Holder of Registrable Securities included in such
registration statement; and, if requested, enter into an
underwriting agreement containing customary representations,
warranties, covenants, allocation of expenses, and customary
closing conditions including, but not limited to, opinions of
counsel and accountants cold comfort letters, with any
underwriter who participates in the offering of Registrable
Securities;
iii) Pay all expenses in connection with the
registration of the Warrants and/or Warrant Shares under the
Act and compliance with the provisions of clause (i) above,
except to the extent otherwise provided in Sections 13(a) and
13(b); and
iv) List the Warrant Shares on each securities
exchange in which the Common Stockis listed.
In connection with the registration of Registrable Securities
in accordance with Paragraph (b) above, the Holders agree to enter into
an underwriting agreement containing customary representations,
warranties, covenants, allocation of expenses (not otherwise
inconsistent with this Agreement),
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<PAGE> 19
and customary closing conditions, with any underwriter who
participates in the offering of Registrable Securities.
(d) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY AND OTHERS. The
Company agrees (i) not to effect any public sale or distribution of any
securities similar to the Registrable Securities or any securities
convertible into or exchangeable or exercisable for such securities (or
any option or other right for such securities), except for any
securities that may be issued to the Holders of the Warrants pursuant
to Section 9 hereof, during the 15-day period prior to, and during the
60-day period beginning on the effective date of any registration
statement under which the Registrable Securities are registered in
accordance with Section 13(a) (other than as part of such
registration); (ii) that any agreement entered into after the date of
this Agreement pursuant to which the Company issues or agrees to issue
any securities which have registration rights shall contain (x) a
provision under which the holders of such securities agree not to
effect any public sale or distribution of any securities similar to the
Registrable Securities (or any securities convertible into or
exchangeable or exercisable for any such similar securities) during the
periods described in clause (i) of this Section 13(d), in each case
including a sale pursuant to Rule 144 under the Act (or any similar
provision then in effect) and (y) a provision that effects, upon notice
given pursuant to Section 13(a), hereof the lapse of any demand
registration rights with respect to any securities of the Company until
the expiration of 180 days after the date of the completion of any
distribution contemplated by Section 13(a) hereof; and (iii) the
Company will not after the date hereof enter into any agreement or
contract wherein the holders of securities of the Company are granted
any "piggy-back" registration rights with respect to any registration
effected pursuant to Section 13(a) hereof.
(e) RULE 144. With a view to making available to Holders the
benefits of certain rules of the Securities and Exchange Commission
(the "Commission") that may permit the sale of Registrable Securities
to the public without registration, the Company hereby covenants and
agrees to use its best efforts to file in a timely manner all reports
and other documents required to be filed by it under the Act and the
Securities Exchange Act of 1934 and the rules and regulations adopted
by the Commission thereunder necessary to permit sales under Rule 144
under the Act, and the Company will take such further action to the
extent required from time to time to enable Holders to sell Registrable
Securities (whether or not any such securities have been the subject of
a demand or piggy-back request under Section 13 hereof) without
registration under the Act within the limitation of the exemptions
provided by (a) Rule 144 under the Act, as such
18
<PAGE> 20
Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of a
Holder, the Company will deliver to such Holder a written statement as
to whether it has complied with such requirements.
14. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS. Nothing contained in this
Agreement or in any of the Warrants shall be construed as conferring upon the
Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as stockholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any of
the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any
right to subscribe to or purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer
or lease or all or substantially all of its property, assets, and
business as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Holders as provided in Section 15 hereof and (b) if
there are more than 100 Holders, cause notice of such event to be published once
in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 15 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the publication
or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up.
19
<PAGE> 21
15. NOTICES. Any notice pursuant to this Agreement to be given or made by
the Holder of any Warrant or Warrant Shares to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Benton Oil and Gas Company
300 Esplanade Drive
Suite 2000
Oxnard, California 93030
Attention: David H. Pratt
Notices or demands authorized by this Agreement to be given or made to or on the
Holder of any Warrant or Warrant Shares shall be sufficiently given or made
(except as otherwise provided in this Agreement) if sent by registered mail,
return receipt requested, postage prepaid, addressed to such Holder at the
address of such Holder as shown on the Warrant Register or the Common Stock
Register, as the case may be.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
17. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders may from time
to time supplement or amend this Agreement in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable and which shall not be inconsistent with
the provisions of the Warrants and which shall not adversely affect the
interests of the Holders. Any amendment to this Agreement may be effected with
the consent of Holders of at least 66 2/3% of the Warrants (for this purpose
Warrant Shares shall be deemed to be Warrants in the proportion that Warrant
Shares are then issuable upon the exercise of Warrants); provided that, any
amendment which shall have the effect of materially adversely affecting the
interests of any Holder shall not be effective with respect to such Holder if
such Holder shall not have consented thereto.
18. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
19. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Agreement
remains in effect, the Company will not merge or
20
<PAGE> 22
consolidate with or into, or sell, transfer or lease all or substantially all of
its property to, any other corporation unless the successor or purchasing
corporation, as the case may be (if not the Company), shall expressly assume, by
supplemental agreement executed and delivered to the Holders, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Company.
20. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders of the Warrants and Warrant Shares.
21. CAPTIONS. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
BENTON OIL AND GAS COMPANY
By:
----------------------------
David H. Pratt,
Vice President - Finance
(CORPORATE SEAL)
Attest:
- -----------------------------------
Secretary
21
<PAGE> 23
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. U-1 Warrant
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON JANUARY 3, 1997
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received ______________, the registered
holder hereof or registered assigns (the "Holder"), is the owner of the number
of Warrants set forth above, each of which entitles the owner thereof to
purchase at any time from 9:00 A.M., Los Angeles time, on August 1, 1993, until
5:00 P.M., Los Angeles time, on January 3, 1997, one fully paid and
nonassessable share of the Common Stock (subject to adjustment), par value $0.01
per share (the "Common Stock"), of Benton Oil and Gas Company, a Delaware
corporation (the "Company"), at the purchase price of $_____ per share, subject
to adjustment (the "Warrant Price"). Payment of the Warrant Price may be made in
cash, by certified or official bank check.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated January
_____, 1992 (the "Warrant Agreement") between the Company and
______________________________ which Warrant Agreement is hereby incorporated
herein by reference and made a part hereof and to which Warrant Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Company and the
holders of the Warrant Certificates. The Warrants shall not be sold,
transferred, assigned, hypothecated or otherwise disposed of prior to the close
of business on January 3, 1993
A-1
<PAGE> 24
except to the extent set forth in the Warrant Agreement. Copies of the Warrant
Agreement are on file at the principal office of the Company.
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its [Insert Title of Officer] to be printed hereon
and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
-----------------------------
David H. Pratt, Vice
President-Finance
Attest:
- -----------------------------
Secretary
A-2
<PAGE> 25
PURCHASE FORM
(To be executed upon exercise of Warrant). To Benton Oil and Gas Company.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and tenders herewith payment of
the purchase price in full in the form of cash or a certified or official bank
check in the amount of $___________.
Please issue a certificate or certificates for such shares of Common Stock
in the name of, and pay any cash for any fractional share to:
Name
-----------------------------------
(Please Print Name, Address
and Social Security No.)
Signature
--------------------------------
NOTE: The above signature
should correspond exactly
with the name on the face
of this Warrant Certificate
or with the name of
assignee appearing in the
assignment form below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
Dated: , 19
---------------- --
A-3
<PAGE> 26
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate.)
For value received, ___________________________ hereby sells, assigns
and transfers unto _________________________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ________________, attorney, to
transfer said Warrant Certificate on the books of the within-named Company, with
full power of substitution in the premises.
Dated: , 19
--------------- --
--------------------------------------------
NOTE: The above signature should correspond
exactly with the name on the face of this Warrant
Certificate.
A-4
<PAGE> 1
Exhibit 4.2
BENTON OIL AND GAS COMPANY
WARRANT AGREEMENT
DATED: FEBRUARY 28, 1992
VOID AFTER 5:00 P.M., LOS ANGELES LOCAL TIME
FEBRUARY 28, 1997
4,230 Warrants to Purchase Common Shares, $.01 Par Value
BENTON OIL AND GAS COMPANY, a Delaware Corporation, (hereinafter
referred to as the "Company") hereby certifies that James Cade (hereinafter
referred to as "Investor"), its successors and assigns, for value received, is
entitled to purchase from the Company at any time on or after February 28, 1992,
and before 5:00 P.M. Los Angeles local time on February 28, 1997, one fully-paid
and non-assessable share of the Common Stock, $.01 Par Value, (hereinafter
referred to as the "Warrant Stock") of the Company (the number and character of
such shares being subject to adjustment as provided herein) for each Warrant
indicated on the face hereof at the purchase price of $9.00 per share
(hereinafter referred to as the "Exercise Price"). This Warrant Agreement was
entered into as part of the purchase of interests in a certain oil and gas well
known as Chalkley ("Chalkley Investment") by Investor. The text of each Warrant
("Warrant Certificate") and the Election to Purchase Form shall be substantially
as set forth in Exhibit A attached hereto.
1. EXERCISE OF WARRANTS. Upon presentation and surrender at the principal office
of the Company of the Warrant Certificate and the attached Election to Purchase
Form duly executed by the registered holder thereof, together with a certified
or bank cashier's check payable to the Company in the amount of the Exercise
Price times the number of the Common Shares of the Company being purchased, the
Company shall deliver to the holder thereof, as promptly as practicable, a share
certificate or certificates representing that number of shares being purchased.
The Warrant Certificate may be exercised in whole or in part; and, in case of
exercise thereof in part only, the Company, upon surrender thereof, will deliver
to the holder a new Warrant Certificate or Certificates of like tenor entitling
said holder to purchase the number of shares as to which the Warrant Certificate
has not been exercised.
2. REGISTRATION ON DEMAND.
(a) One time, upon the written request of the each persons holding
Warrants pursuant to this Warrant Agreement ("Holder") and other persons who
together with Holder own a majority of the Warrant Stock issued in connection
with the Chalkley Investment ("Requesting Holders") that the Company effect
registration, qualification or compliance under the Securities Act and state
securities laws of all or part of the Warrant Shares received
<PAGE> 2
pursuant to the Chalkley Investment ("Registrable Securities") of the Requesting
Holders and specifying the intended method of disposition thereof, the Company
shall (i) promptly thereupon give written notice of the proposed registration to
all other holders of Warrant Stock issued in connection with the Chalkley
Investment and (ii) effect, as soon as practicable and within 90 days after such
request, all such registrations, qualifications and compliances under the
Securities Act and state securities law of the Registrable Securities which the
Company has been so requested to register by Requesting Holders and any other
holder or holders joining in such registration as specified in a written request
received by the Company within 15 business days after the Company's notice to
the extent requisite to permit the sale and distribution of such securities;
provided, however, that the Company shall not be obligated to effect a
registration under the Securities Act pursuant to this Section 3 before January
1, 1993, or after January 1, 1998.
(b) A registration requested pursuant to this Section 3 will not be
deemed to have been effected (i) unless it has become effective and remained
effective for the period of not less than 180 days.
(c) If Requesting Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 3
and provide the name of the managing underwriter or underwriters that the
majority in interest of such Requesting Holders would propose to employ in
connection with the public offering proposed to be made pursuant to the
registration requested; provided that if the Company reasonable objects to any
managing underwriter or underwriters proposed by Requesting Holders, the
Requesting Holders shall propose another managing underwriter or underwriters.
If the sale proposed by the Requesting Holders is to be effected pursuant to an
underwritten public offering, the right of Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Requesting Holders and such Holder) to the extent provided herein. The Company
and the Requesting Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting, and shall
execute powers of attorney and custodial agreements in customary form for
selling same.
3. EXCHANGE AND TRANSFER. The Warrant Certificate (a) at any time prior to the
exercise thereof upon presentation and surrender to the Company may be
exchanged, alone or with other Warrant Certificates of like tenor registered in
the name of the same
2
<PAGE> 3
Holder, for another Warrant Certificate or other Warrant Certificates of like
tenor in the name of such Holder exercisable for the same aggregate number of
Common Shares as the Warrant or Warrants surrendered, and
(b) may not be sold, transferred, hypothecated, or assigned to any
person or entity without the prior written consent of the Company and without a
legal opinion in form and substance satisfactory to legal counsel for the
Company that such sale, transfer, hypothecation or assignment does not violate
any applicable federal or state securities laws.
4. RIGHTS AND OBLIGATIONS OF WARRANT HOLDERS. The Investor shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, in the event that any certificate representing
shares of the Company's Common Stock is issued to the Investor upon exercise of
some or all of the Warrants represented hereby, such Investor shall, for all
purposes be deemed to have become the holder of record of such stock on the date
on which the Warrant Certificate, together with a duly executed Election to
Purchase Form, was surrendered and payment of the purchase price was made,
irrespective of the date of delivery of such share certificate. The rights of
the holder of the Warrant Certificate are limited to those expressed herein and
the holder of the Warrant Certificate, by his acceptance hereof, consents to and
agrees to be bound by and to comply with all the provisions of this Warrant
Agreement, including without limitation all the obligations imposed upon the
holder hereof by Paragraph 7. In addition, the holder of the Warrant
Certificate, by accepting the same, agrees that the Company and its transfer
agent may deem and treat the person in whose name the Warrant Certificate is
registered as the absolute, true and lawful owner for all purposes whatsoever,
and neither the Company nor the transfer agent shall be affected by any notice
to the contrary.
5. WARRANT STOCK. The Company covenants and agrees that all shares delivered
upon exercise of the Warrant Certificate will, upon delivery, be duly and
validly authorized and issued, fully-paid and non-assessable. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of its Common Shares sufficient to permit the exercise in full of all
outstanding Warrants.
6. DISPOSITION OF WARRANTS OR WARRANT STOCK. The holder of the Warrant
Certificate and any transferee thereof or of the Warrant Stock, by their
acceptance thereof, hereby agrees that (a) no public distribution of the
Warrants or the Warrants Stock will be made in violation of the provisions of
the Securities Act of 1933, as amended, or the Rules and Regulations promulgated
thereunder (such Act and Rules and Regulations being hereinafter referred to as
the "Act") and (b) during such period as delivery of a prospectus with respect
to the Warrants or the Warrant Stock may be
3
<PAGE> 4
required by the Act, no public distribution of the Warrants or Warrant Stock
will be made in a manner or on terms different from those set forth in, or
without delivery of, a prospectus then meeting the requirements of Section 10 of
the Act and in compliance with all applicable state laws. If a disposition of
the Warrant Certificate and any of the Warrants or Warrant Stock is proposed to
be made otherwise than by delivery of a prospectus meeting the requirements of
Section 10 of the Act, such action shall be taken only after submission to the
Company of an opinion of counsel, to the effect that the proposed distribution
will not be in violation of the Act or of applicable state law. Furthermore, it
shall be a condition for the transferee thereof to deliver to the Company his or
its agreement to accept and be bound by all of the terms and conditions of this
Warrant Agreement.
7. ADJUSTMENT. The Exercise Price and the number of Warrants are subject to
adjustment from time to time upon the occurrence of any of the events enumerated
below;
(a) Definition of "Shares". As used herein, "Shares" shall mean the
Company's Common Stock, $.01 Par Value and, where appropriate, the other
securities or property purchasable upon the exercise of a Warrant as provided
herein.
(b) Distribution on Shares. In case the Company shall make any
distribution on the Shares payable in the Common Stock of the Company, then the
Exercise Price in effect immediately prior to the making of such distribution
shall be adjusted to a price (computed to the nearest cent) determined by
dividing (A) an amount equal to the product of (i) the number of shares of
Common Stock outstanding immediately prior to the making of such distribution
(including as outstanding shares the maximum number of shares of Common Stock
necessary to effect the conversion or exchange of all then outstanding
convertible stock options, or obligations theretofore issued in distributions on
the Shares) multiplied by (ii) the Exercise Price, by (B) the total number of
shares of Common Stock outstanding immediately following the making of such
distribution (including as then outstanding shares the maximum number of shares
of Common Stock necessary to effect the conversions or exchange of all then
outstanding convertible stock, options, or obligations theretofore issued in
distributions on the Shares).
(c) Subdivision or Combination of Shares. In case the Shares issuable
upon exercise of the Warrants shall be subdivided into a greater or combined
into a lesser number of Shares (whether with or without par value), the Exercise
Price shall be decreased or increased, as the case may be, to an amount which
shall bear the same relation to the Exercise Price in effect immediately prior
to such subdivision or combination as the total number of Shares outstanding
immediately prior to such subdivision or combination bears to the total number
of Shares outstanding immediately after such subdivision or combination. In case
of a subdivision or
4
<PAGE> 5
combination, the adjustment in the Exercise Price shall be made as of the
effective date of the applicable event.
(d) Increase in Shares Per Warrant. Upon each adjustment of the
Exercise Price as a result of calculations made pursuant to this Paragraph 8,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of Shares (calculated to the nearest hundredth) obtained by
(i) multiplying the number of shares purchasable upon exercise of a Warrant
prior to adjustment of the number of Shares by the Exercise Price in effect
prior to adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect after such adjustment of the Exercise
Price.
(e) Effect of Sale, Merger, or Consolidation. In case of any capital
reorganization of the Company, or of any reclassification of the Shares, or in
case of the consolidation of the Company with or the merger of the Company into
any other corporation, each Warrant shall after such capital reorganization,
reclassification of Shares, consolidation or merger be exercisable, upon the
terms and conditions specified in this Agreement, for the number of shares of
stock or other securities of the Company, or of the corporation resulting from
such consolidation or surviving such merger, as the case may be, to which the
Shares issuable (at the time of such capital reorganization, reclassification of
Shares, consolidation or merger) would be entitled if such exercise had taken
place immediately prior to such capital reorganization, reclassification of
Shares, consolidation or merger; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or other
securities or property thereafter deliverable on the exercise of the Warrants.
The subdivision or combination of Shares at any time outstanding into a greater
or lesser number of Shares shall not be deemed to be a reclassification of the
Shares of the Company for the purposes of this Section. Anything herein
contained to the contrary notwithstanding, each Warrant shall, following any
sale of the properties and assets of the Company as, or substantially, as, an
entirety to any other person or entity where such sale is to be followed by a
dissolution or liquidation of the Company, remain exercisable until such
dissolution or liquidation is effected, for such securities or property of the
Company as would have been distributable if such exercise had take place prior
to such sale.
(f) Notice to Warrant Holders of Adjustment. Whenever the Exercise
Price is adjusted as herein provided, the Company shall cause to be mailed to
the Warrant Holders in accordance with the provisions of this Paragraph 6 a
notice (i) stating that the Exercise Price and the number of Shares purchasable
upon exercise
5
<PAGE> 6
of a Warrant have been adjusted, (ii) setting forth the adjusted Exercise Price
and the adjusted number of Shares purchasable upon the exercise of a Warrant,
and (iii) showing in reasonable detail the computations and the facts, including
the amount of the consideration received or deemed to have been received by the
Company, upon which such adjustments are based.
(g) Notice to Warrant Holders of Stock Dividends, Reorganizations,
etc. In case at any time after the date hereof:
(A) The Company shall declare any dividend upon its Shares
payable otherwise than in cash out of the consolidated net income of the Company
and its subsidiaries or payable in Shares of the Company; or
(B) The Company shall offer for subscription to the holders of
its Shares any additional shares of stock of any class or any other securities
convertible into shares of stock or any rights to subscribe thereto; or
(C) There shall be any capital reorganization or
reclassification of the capital stock of the Company (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 any conversion of the Shares
into securities of another corporation, or a sale or all or substantially all of
the assets of the Company, or a consolidation or merger of the Company with
another corporation (other than a merger with a subsidiary in which merger the
Company is the continuing corporation and which does not result in any
reclassification or change of the Shares issuable upon exercise of the
Warrants); or
(D) There shall be voluntary or involuntary dissolution,
liquidation or winding up of the Company;
Then, in any one or more of said cases, the Company shall
cause to be mailed to the Warrant Holders, not less than 10 days before any
record date set for definitive action, written notice of the date upon which the
books of the Company shall close or record shall be taken for purposes of such
dividend, distribution or subscription rights or upon which such reorganization,
reclassification, conversion, sale, consolidation, merger, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also set forth facts as shall indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of stock and other securities and
property deliverable upon exercise of the Warrants. Such notice shall also
specify the date as of which the holders of the Shares of record shall
participate in said dividend, distribution, or subscription rights or shall be
entitled to exchange their Shares for securities or other property deliverable
upon such
6
<PAGE> 7
reorganization, reclassification, conversion, sale, consolidation, merger,
dissolution, liquidation or winding up, as the case may be (on which date in the
event of voluntary or involuntary dissolution, liquidation or winding up of the
Company, the right to exercise the Warrants shall terminate).
(h) Fractional Shares. The Company shall not be required to issue any
fraction of a Share upon the exercise of Warrants. If more than one Warrant
shall be surrendered for exercise at one time by the same holder, the number of
full shares which shall be issuable upon exercise thereof shall be computed on
the basis of the aggregate number of Warrants so exercised. If any fractional
interest in a Share shall be deliverable upon the exercise of any Warrant or
Warrants, the Company shall make an adjustment therefore in cash equal to such
fraction multiplied by the Exercise Price per share.
8. REDEMPTION. Each and all of the Warrants may be redeemed at the election of
the Company at any time after one year from the date hereof and only if the
current market price, which for purpose of this Agreement is the last reported
sales price for the ten trading days prior to the notice of the redemption of
the Warrants as reported on the exchange the Company is then trading on or on
NASDAQ National Market System, is at least $9.00. Such redemption shall be at a
price of $.25 per Warrant. The election of the Company to redeem any Warrants
shall be evidenced by resolution of the board of directors, and the Company
shall redeem all but not less than all of such Warrants. Notice of redemption
shall be given by first class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the redemption date to each registered holder of the
Warrants. All such notices shall state the redemption date, the redemption price
and the place and terms of the surrender for payment of the redemption price.
9. SURVIVAL. The various rights and obligations of the Investor and of the
Company as set forth in Paragraph 7 shall survive the exercise of the Warrants
represented hereby and the surrender of the Warrant Certificate.
10. NOTICE. All notice required by this Warrant Agreement to be given or made by
the Company shall be given or made by First Class Mail, postage prepaid,
addressed to the registered holder hereof at the address of such holder as shown
on the books of the Company.
11. LOSS OR DESTRUCTION. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction, or mutilation of the Warrant Certificate and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of the Warrant Certificate, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
Certificate of like tenor.
7
<PAGE> 8
IN WITNESS WHEREOF, the Company has signed this Warrant Agreement as of
the date first set forth above.
BENTON OIL AND GAS COMPANY
By: ______________________________
A.E. Benton, President
8
<PAGE> 9
ELECTION TO PURCHASE FORM
_______________________, 199__
TO: BENTON OIL AND GAS COMPANY
The undersigned hereby irrevocably elects to exercise the attached Warrant
Certificate to the extent of ____________________ shares of Common Stock ($.01
Par Value) of BENTON OIL AND GAS COMPANY and hereby makes payment of the $
purchase price thereof by delivery of a certified or official bank check,
payable to the order of the Company, in the amount of $ ______________________.
- ------------------------- ---------------------------
Signature Signature
- ------------------------- ---------------------------
Print or Type Name Print or Type Name
9
<PAGE> 1
Exhibit 4.3
BENTON OIL AND GAS COMPANY
WARRANT AGREEMENT
DATED: FEBRUARY 28, 1992
VOID AFTER 5:00 P.M., LOS ANGELES LOCAL TIME
FEBRUARY 28, 1997
846 Warrants to Purchase Common Shares, $.01 Par Value
BENTON OIL AND GAS COMPANY, a Delaware Corporation, (hereinafter
referred to as the "Company") hereby certifies that James Cade (hereinafter
referred to as "Investor"), its successors and assigns, for value received, is
entitled to purchase from the Company at any time on or after February 28, 1992,
and before 5:00 P.M. Los Angeles local time on February 28, 1997, one fully-paid
and non-assessable share of the Common Stock, $.01 Par Value, (hereinafter
referred to as the "Warrant Stock") of the Company (the number and character of
such shares being subject to adjustment as provided herein) for each Warrant
indicated on the face hereof at the purchase price of $9.00 per share
(hereinafter referred to as the "Exercise Price"). This Warrant Agreement was
entered into as part of the purchase of interests in a certain oil and gas well
known as Chalkley ("Chalkley Investment") by Investor. The text of each Warrant
("Warrant Certificate") and the Election to Purchase Form shall be substantially
as set forth in Exhibit A attached hereto.
1. EXERCISE OF WARRANTS. Upon presentation and surrender at the principal office
of the Company of the Warrant Certificate and the attached Election to Purchase
Form duly executed by the registered holder thereof, together with a certified
or bank cashier's check payable to the Company in the amount of the Exercise
Price times the number of the Common Shares of the Company being purchased, the
Company shall deliver to the holder thereof, as promptly as practicable, a share
certificate or certificates representing that number of shares being purchased.
The Warrant Certificate may be exercised in whole or in part; and, in case of
exercise thereof in part only, the Company, upon surrender thereof, will deliver
to the holder a new Warrant Certificate or Certificates of like tenor entitling
said holder to purchase the number of shares as to which the Warrant Certificate
has not been exercised.
2. REGISTRATION ON DEMAND.
(a) One time, upon the written request of the each persons holding
Warrants pursuant to this Warrant Agreement ("Holder") and other persons who
together with Holder own a majority of the Warrant Stock issued in connection
with the Chalkley Investment ("Requesting Holders") that the Company effect
registration, qualification or compliance under the Securities Act and state
securities laws of all or part of the Warrant Shares received
<PAGE> 2
pursuant to the Chalkley Investment ("Registrable Securities") of the Requesting
Holders and specifying the intended method of disposition thereof, the Company
shall (i) promptly thereupon give written notice of the proposed registration to
all other holders of Warrant Stock issued in connection with the Chalkley
Investment and (ii) effect, as soon as practicable and within 90 days after such
request, all such registrations, qualifications and compliances under the
Securities Act and state securities law of the Registrable Securities which the
Company has been so requested to register by Requesting Holders and any other
holder or holders joining in such registration as specified in a written request
received by the Company within 15 business days after the Company's notice to
the extent requisite to permit the sale and distribution of such securities;
provided, however, that the Company shall not be obligated to effect a
registration under the Securities Act pursuant to this Section 3 before January
1, 1993, or after January 1, 1998.
(b) A registration requested pursuant to this Section 3 will not be
deemed to have been effected (i) unless it has become effective and remained
effective for the period of not less than 180 days.
(c) If Requesting Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 3
and provide the name of the managing underwriter or underwriters that the
majority in interest of such Requesting Holders would propose to employ in
connection with the public offering proposed to be made pursuant to the
registration requested; provided that if the Company reasonable objects to any
managing underwriter or underwriters proposed by Requesting Holders, the
Requesting Holders shall propose another managing underwriter or underwriters.
If the sale proposed by the Requesting Holders is to be effected pursuant to an
underwritten public offering, the right of Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Requesting Holders and such Holder) to the extent provided herein. The Company
and the Requesting Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting, and shall
execute powers of attorney and custodial agreements in customary form for
selling same.
3. EXCHANGE AND TRANSFER. The Warrant Certificate (a) at any time prior to the
exercise thereof upon presentation and surrender to the Company may be
exchanged, alone or with other Warrant Certificates of like tenor registered in
the name of the same
2
<PAGE> 3
Holder, for another Warrant Certificate or other Warrant Certificates of like
tenor in the name of such Holder exercisable for the same aggregate number of
Common Shares as the Warrant or Warrants surrendered, and
(b) may not be sold, transferred, hypothecated, or assigned to any
person or entity without the prior written consent of the Company and without a
legal opinion in form and substance satisfactory to legal counsel for the
Company that such sale, transfer, hypothecation or assignment does not violate
any applicable federal or state securities laws.
4. RIGHTS AND OBLIGATIONS OF WARRANT HOLDERS. The Investor shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, in the event that any certificate representing
shares of the Company's Common Stock is issued to the Investor upon exercise of
some or all of the Warrants represented hereby, such Investor shall, for all
purposes be deemed to have become the holder of record of such stock on the date
on which the Warrant Certificate, together with a duly executed Election to
Purchase Form, was surrendered and payment of the purchase price was made,
irrespective of the date of delivery of such share certificate. The rights of
the holder of the Warrant Certificate are limited to those expressed herein and
the holder of the Warrant Certificate, by his acceptance hereof, consents to and
agrees to be bound by and to comply with all the provisions of this Warrant
Agreement, including without limitation all the obligations imposed upon the
holder hereof by Paragraph 7. In addition, the holder of the Warrant
Certificate, by accepting the same, agrees that the Company and its transfer
agent may deem and treat the person in whose name the Warrant Certificate is
registered as the absolute, true and lawful owner for all purposes whatsoever,
and neither the Company nor the transfer agent shall be affected by any notice
to the contrary.
5. WARRANT STOCK. The Company covenants and agrees that all shares delivered
upon exercise of the Warrant Certificate will, upon delivery, be duly and
validly authorized and issued, fully-paid and non-assessable. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of its Common Shares sufficient to permit the exercise in full of all
outstanding Warrants.
6. DISPOSITION OF WARRANTS OR WARRANT STOCK. The holder of the Warrant
Certificate and any transferee thereof or of the Warrant Stock, by their
acceptance thereof, hereby agrees that (a) no public distribution of the
Warrants or the Warrants Stock will be made in violation of the provisions of
the Securities Act of 1933, as amended, or the Rules and Regulations promulgated
thereunder (such Act and Rules and Regulations being hereinafter referred to as
the "Act") and (b) during such period as delivery of a prospectus with respect
to the Warrants or the Warrant Stock may be
3
<PAGE> 4
required by the Act, no public distribution of the Warrants or Warrant Stock
will be made in a manner or on terms different from those set forth in, or
without delivery of, a prospectus then meeting the requirements of Section 10 of
the Act and in compliance with all applicable state laws. If a disposition of
the Warrant Certificate and any of the Warrants or Warrant Stock is proposed to
be made otherwise than by delivery of a prospectus meeting the requirements of
Section 10 of the Act, such action shall be taken only after submission to the
Company of an opinion of counsel, to the effect that the proposed distribution
will not be in violation of the Act or of applicable state law. Furthermore, it
shall be a condition for the transferee thereof to deliver to the Company his or
its agreement to accept and be bound by all of the terms and conditions of this
Warrant Agreement.
7. ADJUSTMENT. The Exercise Price and the number of Warrants are subject to
adjustment from time to time upon the occurrence of any of the events enumerated
below;
(a) Definition of "Shares". As used herein, "Shares" shall mean the
Company's Common Stock, $.01 Par Value and, where appropriate, the other
securities or property purchasable upon the exercise of a Warrant as provided
herein.
(b) Distribution on Shares. In case the Company shall make any
distribution on the Shares payable in the Common Stock of the Company, then the
Exercise Price in effect immediately prior to the making of such distribution
shall be adjusted to a price (computed to the nearest cent) determined by
dividing (A) an amount equal to the product of (i) the number of shares of
Common Stock outstanding immediately prior to the making of such distribution
(including as outstanding shares the maximum number of shares of Common Stock
necessary to effect the conversion or exchange of all then outstanding
convertible stock options, or obligations theretofore issued in distributions on
the Shares) multiplied by (ii) the Exercise Price, by (B) the total number of
shares of Common Stock outstanding immediately following the making of such
distribution (including as then outstanding shares the maximum number of shares
of Common Stock necessary to effect the conversions or exchange of all then
outstanding convertible stock, options, or obligations theretofore issued in
distributions on the Shares).
(c) Subdivision or Combination of Shares. In case the Shares issuable
upon exercise of the Warrants shall be subdivided into a greater or combined
into a lesser number of Shares (whether with or without par value), the Exercise
Price shall be decreased or increased, as the case may be, to an amount which
shall bear the same relation to the Exercise Price in effect immediately prior
to such subdivision or combination as the total number of Shares outstanding
immediately prior to such subdivision or combination bears to the total number
of Shares outstanding immediately after such subdivision or combination. In case
of a subdivision or
4
<PAGE> 5
combination, the adjustment in the Exercise Price shall be made as of the
effective date of the applicable event.
(d) Increase in Shares Per Warrant. Upon each adjustment of the
Exercise Price as a result of calculations made pursuant to this Paragraph 8,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of Shares (calculated to the nearest hundredth) obtained by
(i) multiplying the number of shares purchasable upon exercise of a Warrant
prior to adjustment of the number of Shares by the Exercise Price in effect
prior to adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect after such adjustment of the Exercise
Price.
(e) Effect of Sale, Merger, or Consolidation. In case of any capital
reorganization of the Company, or of any reclassification of the Shares, or in
case of the consolidation of the Company with or the merger of the Company into
any other corporation, each Warrant shall after such capital reorganization,
reclassification of Shares, consolidation or merger be exercisable, upon the
terms and conditions specified in this Agreement, for the number of shares of
stock or other securities of the Company, or of the corporation resulting from
such consolidation or surviving such merger, as the case may be, to which the
Shares issuable (at the time of such capital reorganization, reclassification of
Shares, consolidation or merger) would be entitled if such exercise had taken
place immediately prior to such capital reorganization, reclassification of
Shares, consolidation or merger; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or other
securities or property thereafter deliverable on the exercise of the Warrants.
The subdivision or combination of Shares at any time outstanding into a greater
or lesser number of Shares shall not be deemed to be a reclassification of the
Shares of the Company for the purposes of this Section. Anything herein
contained to the contrary notwithstanding, each Warrant shall, following any
sale of the properties and assets of the Company as, or substantially, as, an
entirety to any other person or entity where such sale is to be followed by a
dissolution or liquidation of the Company, remain exercisable until such
dissolution or liquidation is effected, for such securities or property of the
Company as would have been distributable if such exercise had take place prior
to such sale.
(f) Notice to Warrant Holders of Adjustment. Whenever the Exercise
Price is adjusted as herein provided, the Company shall cause to be mailed to
the Warrant Holders in accordance with the provisions of this Paragraph 6 a
notice (i) stating that the Exercise Price and the number of Shares purchasable
upon exercise
5
<PAGE> 6
of a Warrant have been adjusted, (ii) setting forth the adjusted Exercise Price
and the adjusted number of Shares purchasable upon the exercise of a Warrant,
and (iii) showing in reasonable detail the computations and the facts, including
the amount of the consideration received or deemed to have been received by the
Company, upon which such adjustments are based.
(g) Notice to Warrant Holders of Stock Dividends, Reorganizations,
etc. In case at any time after the date hereof:
(A) The Company shall declare any dividend upon its Shares
payable otherwise than in cash out of the consolidated net income of the Company
and its subsidiaries or payable in Shares of the Company; or
(B) The Company shall offer for subscription to the holders of
its Shares any additional shares of stock of any class or any other securities
convertible into shares of stock or any rights to subscribe thereto; or
(C) There shall be any capital reorganization or
reclassification of the capital stock of the Company (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 any conversion of the Shares
into securities of another corporation, or a sale or all or substantially all of
the assets of the Company, or a consolidation or merger of the Company with
another corporation (other than a merger with a subsidiary in which merger the
Company is the continuing corporation and which does not result in any
reclassification or change of the Shares issuable upon exercise of the
Warrants); or
(D) There shall be voluntary or involuntary dissolution,
liquidation or winding up of the Company;
Then, in any one or more of said cases, the Company shall
cause to be mailed to the Warrant Holders, not less than 10 days before any
record date set for definitive action, written notice of the date upon which the
books of the Company shall close or record shall be taken for purposes of such
dividend, distribution or subscription rights or upon which such reorganization,
reclassification, conversion, sale, consolidation, merger, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also set forth facts as shall indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of stock and other securities and
property deliverable upon exercise of the Warrants. Such notice shall also
specify the date as of which the holders of the Shares of record shall
participate in said dividend, distribution, or subscription rights or shall be
entitled to exchange their Shares for securities or other property deliverable
upon such
6
<PAGE> 7
reorganization, reclassification, conversion, sale, consolidation, merger,
dissolution, liquidation or winding up, as the case may be (on which date in the
event of voluntary or involuntary dissolution, liquidation or winding up of the
Company, the right to exercise the Warrants shall terminate).
(h) Fractional Shares. The Company shall not be required to issue any
fraction of a Share upon the exercise of Warrants. If more than one Warrant
shall be surrendered for exercise at one time by the same holder, the number of
full shares which shall be issuable upon exercise thereof shall be computed on
the basis of the aggregate number of Warrants so exercised. If any fractional
interest in a Share shall be deliverable upon the exercise of any Warrant or
Warrants, the Company shall make an adjustment therefore in cash equal to such
fraction multiplied by the Exercise Price per share.
8. REDEMPTION. Each and all of the Warrants may be redeemed at the election of
the Company at any time after one year from the date hereof and only if the
current market price, which for purpose of this Agreement is the last reported
sales price for the ten trading days prior to the notice of the redemption of
the Warrants as reported on the exchange the Company is then trading on or on
NASDAQ National Market System, is at least $9.00. Such redemption shall be at a
price of $.25 per Warrant. The election of the Company to redeem any Warrants
shall be evidenced by resolution of the board of directors, and the Company
shall redeem all but not less than all of such Warrants. Notice of redemption
shall be given by first class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the redemption date to each registered holder of the
Warrants. All such notices shall state the redemption date, the redemption price
and the place and terms of the surrender for payment of the redemption price.
9. SURVIVAL. The various rights and obligations of the Investor and of the
Company as set forth in Paragraph 7 shall survive the exercise of the Warrants
represented hereby and the surrender of the Warrant Certificate.
10. NOTICE. All notice required by this Warrant Agreement to be given or made by
the Company shall be given or made by First Class Mail, postage prepaid,
addressed to the registered holder hereof at the address of such holder as shown
on the books of the Company.
11. LOSS OR DESTRUCTION. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction, or mutilation of the Warrant Certificate and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of the Warrant Certificate, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
Certificate of like tenor.
7
<PAGE> 8
IN WITNESS WHEREOF, the Company has signed this Warrant Agreement as of
the date first set forth above.
BENTON OIL AND GAS COMPANY
By: ______________________________
A.E. Benton, President
8
<PAGE> 9
ELECTION TO PURCHASE FORM
_______________________, 199__
TO: BENTON OIL AND GAS COMPANY
The undersigned hereby irrevocably elects to exercise the attached Warrant
Certificate to the extent of ____________________ shares of Common Stock
($.01 Par Value) of BENTON OIL AND GAS COMPANY and hereby makes payment of the
$_________ purchase price thereof by delivery of a certified or official bank
check, payable to the order of the Company, in the amount of $ _______________.
- ------------------------- ---------------------------
Signature Signature
- ------------------------- ---------------------------
Print or Type Name Print or Type Name
9
<PAGE> 1
Exhibit 4.4
BENTON OIL AND GAS COMPANY
WARRANT AGREEMENT
DATED: FEBRUARY 12, 1992
VOID AFTER 5:00 P.M., LOS ANGELES LOCAL TIME
FEBRUARY 12, 1997
950 Warrants to Purchase Common Shares, $.01 Par Value
BENTON OIL AND GAS COMPANY, a Delaware Corporation, (hereinafter referred
to as the "Company") hereby certifies that H. G. Von Dallwitz (hereinafter
referred to as "Investor"), its successors and assigns, for value received, is
entitled to purchase from the Company at any time on or after February 12, 1992,
and before 5:00 P.M. Los Angeles local time on February 12, 1997, one fully-paid
and non-assessable share of the Common Stock, $.01 Par Value, (hereinafter
referred to as the "Warrant Stock") of the Company (the number and character of
such shares being subject to adjustment as provided herein) for each Warrant
indicated on the face hereof at the purchase price of $9.00 per share
(hereinafter referred to as the "Exercise Price"). This Warrant Agreement was
entered into as part of the purchase of interests in certain oil and gas wells
by the Company pursuant to the terms of the Purchase Agreement between the
Company and Vantage Industry Partners dated February 7, 1992 ("Purchase
Agreement"). The text of each Warrant ("Warrant Certificate") and the Election
to Purchase Form shall be substantially as set forth in Exhibit A attached
hereto.
1. EXERCISE OF WARRANTS. Upon presentation and surrender at the principal office
of the Company of the Warrant Certificate and the attached Election to Purchase
Form duly executed by the registered holder thereof, together with a certified
or bank cashier's check payable to the Company in the amount of the Exercise
Price times the number of the Common Shares of the Company being purchased, the
Company shall deliver to the holder thereof, as promptly as practicable, a share
certificate or certificates representing that number of shares being purchased.
The Warrant Certificate may be exercised in whole or in part; and, in case of
exercise thereof in part only, the Company, upon surrender thereof, will deliver
to the holder a new Warrant Certificate or Certificates of like tenor entitling
said holder to purchase the number of shares as to which the Warrant Certificate
has not been exercised.
2. REGISTRATION ON DEMAND.
(a) One time, upon the written request of the each persons holding
Warrants pursuant to this Warrant Agreement ("Holder") and other persons who
together with Holder own a majority of the Warrant Stock issued in connection
with the Purchase Agreement ("Requesting Holders") that the Company effect
registration,
<PAGE> 2
qualification or compliance under the Securities Act and state securities laws
of all or part of the Shares of common stock received under the Purchase
Agreement, including shares of common stock underlying the Warrants
("Registrable Securities") of the Requesting Holders and specifying the intended
method of disposition thereof, the Company shall (i) promptly thereupon give
written notice of the proposed registration to all other holders of Warrant
Stock and common stock issued in connection with the Purchase Agreement and (ii)
effect, as soon as practicable and within 90 days after such request, all such
registrations, qualifications and compliances under the Securities Act and state
securities law of the Registrable Securities which the Company has been so
requested to register by Requesting Holders and any other holder or holders
joining in such registration as specified in a written request received by the
Company within 15 business days after the Company's notice to the extent
requisite to permit the sale and distribution of such securities; provided,
however, that the Company shall not be obligated to effect a registration under
the Securities Act pursuant to this Section 3 before January 1, 1993, or after
January 1, 1998.
(b) A registration requested pursuant to this Section 3 will not be
deemed to have been effected (i) unless it has become effective and remained
effective for the period of not less than 180 days.
(c) If Requesting Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 3
and provide the name of the managing underwriter or underwriters that the
majority in interest of such Requesting Holders would propose to employ in
connection with the public offering proposed to be made pursuant to the
registration requested; provided that if the Company reasonable objects to any
managing underwriter or underwriters proposed by Requesting Holders, the
Requesting Holders shall propose another managing underwriter or underwriters.
If the sale proposed by the Requesting Holders is to be effected pursuant to an
underwritten public offering, the right of Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Requesting Holders and such Holder) to the extent provided herein. The Company
and the Requesting Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting, and shall
execute powers of attorney and custodial agreements in customary form for
selling same.
2
<PAGE> 3
(d) This Demand Registration Right and the Demand Registration Right
set forth in the Purchase Agreement shall be considered as one and the same and
Holders shall be limited to one such right in connection with the transaction.
3. EXCHANGE AND TRANSFER. The Warrant Certificate (a) at any time prior to the
exercise thereof upon presentation and surrender to the Company may be
exchanged, alone or with other Warrant Certificates of like tenor registered in
the name of the same Holder, for another Warrant Certificate or other Warrant
Certificates of like tenor in the name of such Holder exercisable for the same
aggregate number of Common Shares as the Warrant or Warrants surrendered, and
(b) may not be sold, transferred, hypothecated, or assigned to any
person or entity without the prior written consent of the Company and without a
legal opinion in form and substance satisfactory to legal counsel for the
Company that such sale, transfer, hypothecation or assignment does not violate
any applicable federal or state securities laws.
4. RIGHTS AND OBLIGATIONS OF WARRANT HOLDERS. The Investor shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, in the event that any certificate representing
shares of the Company's Common Stock is issued to the Investor upon exercise of
some or all of the Warrants represented hereby, such Investor shall, for all
purposes be deemed to have become the holder of record of such stock on the date
on which the Warrant Certificate, together with a duly executed Election to
Purchase Form, was surrendered and payment of the purchase price was made,
irrespective of the date of delivery of such share certificate. The rights of
the holder of the Warrant Certificate are limited to those expressed herein and
the holder of the Warrant Certificate, by his acceptance hereof, consents to and
agrees to be bound by and to comply with all the provisions of this Warrant
Agreement, including without limitation all the obligations imposed upon the
holder hereof by Paragraph 7. In addition, the holder of the Warrant
Certificate, by accepting the same, agrees that the Company and its transfer
agent may deem and treat the person in whose name the Warrant Certificate is
registered as the absolute, true and lawful owner for all purposes whatsoever,
and neither the Company nor the transfer agent shall be affected by any notice
to the contrary.
5. WARRANT STOCK. The Company covenants and agrees that all shares delivered
upon exercise of the Warrant Certificate will, upon delivery, be duly and
validly authorized and issued, fully-paid and non-assessable. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of its Common Shares sufficient to permit the exercise in full of all
outstanding Warrants.
3
<PAGE> 4
6. DISPOSITION OF WARRANTS OR WARRANT STOCK. The holder of the Warrant
Certificate and any transferee thereof or of the Warrant Stock, by their
acceptance thereof, hereby agrees that (a) no public distribution of the
Warrants or the Warrants Stock will be made in violation of the provisions of
the Securities Act of 1933, as amended, or the Rules and Regulations promulgated
thereunder (such Act and Rules and Regulations being hereinafter referred to as
the "Act") and (b) during such period as delivery of a prospectus with respect
to the Warrants or the Warrant Stock may be required by the Act, no public
distribution of the Warrants or Warrant Stock will be made in a manner or on
terms different from those set forth in, or without delivery of, a prospectus
then meeting the requirements of Section 10 of the Act and in compliance with
all applicable state laws. If a disposition of the Warrant Certificate and any
of the Warrants or Warrant Stock is proposed to be made otherwise than by
delivery of a prospectus meeting the requirements of Section 10 of the Act, such
action shall be taken only after submission to the Company of an opinion of
counsel, to the effect that the proposed distribution will not be in violation
of the Act or of applicable state law. Furthermore, it shall be a condition for
the transferee thereof to deliver to the Company his or its agreement to accept
and be bound by all of the terms and conditions of this Warrant Agreement.
7. ADJUSTMENT. The Exercise Price and the number of Warrants are subject to
adjustment from time to time upon the occurrence of any of the events enumerated
below;
(a) Definition of "Shares". As used herein, "Shares" shall mean the
Company's Common Stock, $.01 Par Value and, where appropriate, the other
securities or property purchasable upon the exercise of a Warrant as provided
herein.
(b) Distribution on Shares. In case the Company shall make any
distribution on the Shares payable in the Common Stock of the Company, then the
Exercise Price in effect immediately prior to the making of such distribution
shall be adjusted to a price (computed to the nearest cent) determined by
dividing (A) an amount equal to the product of (i) the number of shares of
Common Stock outstanding immediately prior to the making of such distribution
(including as outstanding shares the maximum number of shares of Common Stock
necessary to effect the conversion or exchange of all then outstanding
convertible stock options, or obligations theretofore issued in distributions on
the Shares) multiplied by (ii) the Exercise Price, by (B) the total number of
shares of Common Stock outstanding immediately following the making of such
distribution (including as then outstanding shares the maximum number of shares
of Common Stock necessary to effect the conversions or exchange of all then
outstanding convertible stock, options, or obligations theretofore issued in
distributions on the Shares).
4
<PAGE> 5
(c) Subdivision or Combination of Shares. In case the Shares issuable
upon exercise of the Warrants shall be subdivided into a greater or combined
into a lesser number of Shares (whether with or without par value), the Exercise
Price shall be decreased or increased, as the case may be, to an amount which
shall bear the same relation to the Exercise Price in effect immediately prior
to such subdivision or combination as the total number of Shares outstanding
immediately prior to such subdivision or combination bears to the total number
of Shares outstanding immediately after such subdivision or combination. In case
of a subdivision or combination, the adjustment in the Exercise Price shall be
made as of the effective date of the applicable event.
(d) Increase in Shares Per Warrant. Upon each adjustment of the
Exercise Price as a result of calculations made pursuant to this Paragraph 8,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of Shares (calculated to the nearest hundredth) obtained by
(i) multiplying the number of shares purchasable upon exercise of a Warrant
prior to adjustment of the number of Shares by the Exercise Price in effect
prior to adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect after such adjustment of the Exercise
Price.
(e) Effect of Sale, Merger, or Consolidation. In case of any capital
reorganization of the Company, or of any reclassification of the Shares, or in
case of the consolidation of the Company with or the merger of the Company into
any other corporation, each Warrant shall after such capital reorganization,
reclassification of Shares, consolidation or merger be exercisable, upon the
terms and conditions specified in this Agreement, for the number of shares of
stock or other securities of the Company, or of the corporation resulting from
such consolidation or surviving such merger, as the case may be, to which the
Shares issuable (at the time of such capital reorganization, reclassification of
Shares, consolidation or merger) would be entitled if such exercise had taken
place immediately prior to such capital reorganization, reclassification of
Shares, consolidation or merger; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or other
securities or property thereafter deliverable on the exercise of the Warrants.
The subdivision or combination of Shares at any time outstanding into a greater
or lesser number of Shares shall not be deemed to be a reclassification of the
Shares of the Company for the purposes of this Section. Anything herein
contained to the contrary notwithstanding, each Warrant shall, following any
sale of the properties and assets of the Company as, or substantially, as, an
entirety to any other person or entity where such sale is to be followed by a
dissolution or liquidation
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<PAGE> 6
of the Company, remain exercisable until such dissolution or liquidation is
effected, for such securities or property of the Company as would have been
distributable if such exercise had take place prior to such sale.
(f) Notice to Warrant Holders of Adjustment. Whenever the Exercise
Price is adjusted as herein provided, the Company shall cause to be mailed to
the Warrant Holders in accordance with the provisions of this Paragraph 6 a
notice (i) stating that the Exercise Price and the number of Shares purchasable
upon exercise of a Warrant have been adjusted, (ii) setting forth the adjusted
Exercise Price and the adjusted number of Shares purchasable upon the exercise
of a Warrant, and (iii) showing in reasonable detail the computations and the
facts, including the amount of the consideration received or deemed to have been
received by the Company, upon which such adjustments are based.
(g) Notice to Warrant Holders of Stock Dividends, Reorganizations,
etc. In case at any time after the date hereof:
(A) The Company shall declare any dividend upon its Shares
payable otherwise than in cash out of the consolidated net income of the Company
and its subsidiaries or payable in Shares of the Company; or
(B) The Company shall offer for subscription to the holders of
its Shares any additional shares of stock of any class or any other securities
convertible into shares of stock or any rights to subscribe thereto; or
(C) There shall be any capital reorganization or
reclassification of the capital stock of the Company (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 any conversion of the Shares
into securities of another corporation, or a sale or all or substantially all of
the assets of the Company, or a consolidation or merger of the Company with
another corporation (other than a merger with a subsidiary in which merger the
Company is the continuing corporation and which does not result in any
reclassification or change of the Shares issuable upon exercise of the
Warrants); or
(D) There shall be voluntary or involuntary dissolution,
liquidation or winding up of the Company;
Then, in any one or more of said cases, the Company shall
cause to be mailed to the Warrant Holders, not less than 10 days before any
record date set for definitive action, written notice of the date upon which the
books of the Company shall close or record shall be taken for purposes of such
dividend, distribution or subscription rights or upon which such reorganization,
reclassification, conversion, sale, consolidation, merger,
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<PAGE> 7
dissolution, liquidation or winding up shall take place, as the case may be.
Such notice shall also set forth facts as shall indicate the effect of such
action (to the extent such effect may be known at the date of such notice) on
the Exercise Price and the kind and amount of the shares of stock and other
securities and property deliverable upon exercise of the Warrants. Such notice
shall also specify the date as of which the holders of the Shares of record
shall participate in said dividend, distribution, or subscription rights or
shall be entitled to exchange their Shares for securities or other property
deliverable upon such reorganization, reclassification, conversion, sale,
consolidation, merger, dissolution, liquidation or winding up, as the case may
be (on which date in the event of voluntary or involuntary dissolution,
liquidation or winding up of the Company, the right to exercise the Warrants
shall terminate).
(h) Fractional Shares. The Company shall not be required to issue any
fraction of a Share upon the exercise of Warrants. If more than one Warrant
shall be surrendered for exercise at one time by the same holder, the number of
full shares which shall be issuable upon exercise thereof shall be computed on
the basis of the aggregate number of Warrants so exercised. If any fractional
interest in a Share shall be deliverable upon the exercise of any Warrant or
Warrants, the Company shall make an adjustment therefore in cash equal to such
fraction multiplied by the Exercise Price per share.
8. REDEMPTION. Each and all of the Warrants may be redeemed at the election of
the Company at any time after one year from the date hereof and only if the
current market price, which for purpose of this Agreement is the last reported
sales price for the ten trading days prior to the notice of the redemption of
the Warrants as reported on the exchange the Company is then trading on or on
NASDAQ National Market System, is at least $9.00. Such redemption shall be at a
price of $.25 per Warrant. The election of the Company to redeem any Warrants
shall be evidenced by resolution of the board of directors, and the Company
shall redeem all but not less than all of such Warrants. Notice of redemption
shall be given by first class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the redemption date to each registered holder of the
Warrants. All such notices shall state the redemption date, the redemption price
and the place and terms of the surrender for payment of the redemption price.
9. SURVIVAL. The various rights and obligations of the Investor and of the
Company as set forth in Paragraph 7 shall survive the exercise of the Warrants
represented hereby and the surrender of the Warrant Certificate.
10. NOTICE. All notice required by this Warrant Agreement to be given or made by
the Company shall be given or made by First Class
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<PAGE> 8
Mail, postage prepaid, addressed to the registered holder hereof at the address
of such holder as shown on the books of the Company.
11. LOSS OR DESTRUCTION. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction, or mutilation of the Warrant Certificate and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of the Warrant Certificate, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
Certificate of like tenor.
IN WITNESS WHEREOF, the Company has signed this Warrant Agreement as of the
date first set forth above.
BENTON OIL AND GAS COMPANY
By: _____________________________________
Clarence Cottman, Vice President
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<PAGE> 9
ELECTION TO PURCHASE FORM
________________, 199__
TO: BENTON OIL AND GAS COMPANY
The undersigned hereby irrevocably elects to exercise the attached Warrant
Certificate to the extent of ____________________ shares of Common Stock ($.01
Par Value) of BENTON OIL AND GAS COMPANY and hereby makes payment of the
$________________ purchase price thereof by delivery of a certified or official
bank check, payable to the order of the Company, in the amount of
$______________________ .
- ------------------------- ---------------------------
Signature Signature
- ------------------------- ---------------------------
Print or Type Name Print or Type Name
9
<PAGE> 1
Exhibit 4.5
WARRANT AGREEMENT
BETWEEN
BENTON OIL AND GAS COMPANY
AND
GEORGE T. E. HICKS
DATED AS OF JULY 13, 1992
<PAGE> 2
WARRANT AGREEMENT dated as of July 13, 1992, between Benton Oil and Gas
Company, a Delaware corporation (the "Company") and George T.E. Hicks
("Consultant").
WHEREAS, Consultant has agreed pursuant to the Consulting Agreement (the
"Agreement") dated July 12, 1992 to act as a financial and public relations
consultant.
WHEREAS, the Company proposes to issue to Consultant as compensation for
its agreement to act as a Consultant pursuant to the Agreement, common stock
purchase warrants (the "Warrants") to purchase up to 2,500 shares (the
"Warrant Shares") of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), each Warrant entitling the holder thereof to purchase one
share of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein and in the Agreement set forth and for other good and
valuable consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and
deliver the Warrants to Consultant in consideration for, and as part of the
compensation to Consultant in connection with Consultant acting as a Consultant
pursuant to the Agreement. The number of Warrants to be issued and delivered
shall be 2,500. No cash consideration will be paid by Consultant for the
Warrants. The text of each Warrant, of the purchase form and of each assignment
form to be printed on the reverse thereof shall be substantially as set forth
in Exhibit A attached hereto. The Warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the present or any future
Chairman of the Board, President, Treasurer or Vice President of the Company,
under its corporate seal, affixed or in facsimile, attested by the manual or
facsimile signature of the present or future Secretary or an Assistant
Secretary of the Company. A Warrant bearing the manual or facsimile signature
of individuals who were at any time the proper officers of the Company shall
bind the Company notwithstanding that such individuals or any of them shall
have ceased to hold such offices prior to the delivery of such Warrant or did
not hold such offices on the date of this Agreement.
Warrants shall be dated as of the date of execution thereof by the Company
either upon initial issuance or upon division, exchange, substitution or
transfer.
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<PAGE> 3
2. REGISTRATION. The Warrants shall be numbered and shall be registered on
the books of the Company (the "Warrant Register") as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register (the "Holder") as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such facts that
its participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of Consultant in such denominations as Consultant may
request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
at the option of the Holder thereof for another certificate or certificates of
different denominations entitling the Holder thereof to purchase upon surrender
to the Company or its duly authorized agent a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates, as the case may be,
as so requested. Any Warrant issued upon exchange, transfer or partial exercise
of the Warrants shall be the valid obligation of the Company, evidencing the
same generic rights and entitled to the same generic benefits under this
Agreement as the Warrants surrendered for such exchange, transfer or exercise.
4. RESTRICTIONS ON TRANSFER. The Warrants shall be transferable only on the
Warrant Register upon delivery to the Company of the Warrant certificate or
certificates duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited
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<PAGE> 4
with the Company in its discretion. Upon any registration of transfer, the
Company shall deliver a new Warrant or Warrants to the person entitled thereto.
Notwithstanding the foregoing the Company shall have no obligation to cause
Warrants to be transferred on its books to any person, unless the Holder of
such Warrants shall furnish to the Company evidence of compliance with the
Securities Act of 1933, as amended (the "Act"), in accordance with the
provisions of Section 11 of this Agreement.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Holder thereof to purchase one
share of Common Stock subject to adjustment in accordance with Section
9 hereof at any time from 9:00 A.M., Los Angeles time, on July 13,
1992 until 5:00 P.M., Los Angeles time, on July 13, 1997 (the
"Expiration Date") at a purchase price of $7.30 per share (the
"Warrant Price").
(b) The Warrant Price and the number of shares issuable upon
exercise of Warrants are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 9 of this
Agreement. Subject to the provisions of this Agreement, each Holder
shall have the right, which may be exercised as expressed in such
Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully paid and nonassessable shares
of Common Stock specified in such Warrants, upon surrender to the
Company, or its duly authorized agent, of such Warrants, with the
purchase form on the reverse thereof duly filled in and signed, and
upon payment to the Company of the Warrant Price, as adjusted in
accordance with the provisions of Section 9 of this Agreement, for the
number of shares in respect of which such Warrants are then exercised.
Payment of such Warrant Price may be made only in cash, by certified or
official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and (subject to receipt of
evidence of compliance with the Act in accordance with the provisions of Section
11 of this Agreement) in such name or names as the Holder may designate, a
certificate or certificates for the number of full shares of Common Stock so
purchased upon the exercise of such Warrants, together with cash, as provided
in Section 10 of this Agreement, in respect of any fraction of a share of such
stock otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
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<PAGE> 5
therein shall be deemed to have become a holder of record of such shares as of
the date of the surrender of such Warrants and payment of the Warrant Price as
aforesaid; PROVIDED, HOWEVER, that if, at the time of surrender of the Warrant
and payment of such Warrant Price, the transfer books for the Common Stock or
other class of stock purchasable upon the exercise of the Warrants shall be
closed, the certificates for the shares in respect of which the Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened whether before, on or after the Expiration Date and until such date
the Company shall be under no duty to deliver any certificate for such shares;
PROVIDED, FURTHER, however, that the transfer books shall not be closed at any
one time for a period longer than five days unless otherwise required by law.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part
and, in the event that any Warrant is exercised in respect of less than all of
the shares purchasable on such exercise at any time prior to the Expiration
Date, a new certificate evidencing the remaining Warrant or Warrants will be
issued.
5.1. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that
if any shares of Common Stock required to be reserved for purposes of exercise
or conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange, before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case may be, PROVIDED, HOWEVER, that in no event
shall such shares of Common Stock be issued, and the Company is hereby
authorized to suspend the exercise of all Warrants, for the period during which
such registration, approval or listing is required but not in effect.
6. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants and any securities issued pursuant to Section 9 hereof; 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 issue or delivery of
any Warrants or certificates for Warrant Shares and any securities issued
pursuant to Section 9 hereof in a name other than that of the Holder of such
Warrants.
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<PAGE> 6
7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest; but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity or
bond, if requested, also reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF
WARRANTS. There have been reserved out of the authorized and unissued shares of
Common Stock, a number of shares sufficient to provide for the exercise of the
rights of purchase represented by the Warrants, and the transfer agent for the
Common Stock ("Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be issuable as provided in Section
10 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section 9.3
hereof. All Warrants surrendered in the exercise of the rights thereby evidenced
shall be cancelled, and such cancelled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants (subject to adjustment as herein provided). No shares
of stock shall be subject to reservation in respect of the Warrants subsequent
to the Expiration Date except to the extent necessary to comply with the terms
of this Agreement.
5
<PAGE> 7
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined.
9.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification of its shares of Common
Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto
shall be adjusted so that the Holder of each Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of
the Company which he would have owned or have been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event
or any record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without any
charge to such holders, entitling them (for a period expiring within 60
days after the record date mentioned below) to subscribe for or
purchase shares of Common Stock at a price per share which is lower at
the record date mentioned below than the then current market price per
share of Common Stock (as determined in accordance with paragraph (e)
below), the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon exercise of each Warrant
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus
6
<PAGE> 8
the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of issuance
of such rights, options or warrants plus the number of shares which
the aggregate offering price of the total number of shares of common
stock so offered would purchase at the current market price per share
of Common Stock at such record date. Such adjustment shall be made
whenever such rights, options or warrants are issued, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of consolidated
earnings or earned surplus and dividends or distributions referred to
in paragraph (a) above or in the paragraph immediately following this
paragraph) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in
paragraph (b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined in accordance with paragraph (e) below) on
the date of such distribution, and of which the denominator shall be
the then current market price per share of Common Stock, less the then
fair value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive
such distribution.
In the event of distribution by the Company to all holders of
its shares of Common Stock of stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an
adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant, the Holder of each Warrant, upon the exercise
thereof at any time after such distribution, shall be entitled to
receive from the Company,
7
<PAGE> 9
such subsidiary or both, as the Company shall determine, the stock or
other securities to which such Holder would have been entitled if such
Holder had exercised such Warrant immediately prior thereto regardless
of whether the Warrants are exercisable at such time, all subject to
further adjustment as provided in this subsection 9.1; PROVIDED,
HOWEVER, that no adjustment in respect of dividends or interest on
such stock or other securities shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(d) For the purpose of any computation under paragraphs (b)
and (c) of this Section, the current market price per share of
Common Stock at any date shall be the average of the daily closing
prices of the Company's Common Stock, as reported by the American
Stock Exchange, for 30 consecutive trading days commencing 45 trading
days before the date of such computation. The closing price for each
day shall be the last such reported sales price regular way or, in
case no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in each case on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if not listed or
admitted to trading, the average of the closing bid and asked prices
of the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more such
quotations, the Board of Directors of the Company shall determine the
current market price, in good faith, on the basis of such quotations
as it considers appropriate.
(e) In any case in which this Section 9.1 shall require that
any adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the occurrence of the event the issuing to the
Holder of any Warrant exercised after that record date the shares of
Common Stock and other securities of the Company, if any, issuable
upon the exercise of any Warrant over and above the shares of Common
Stock and other securities of the Company, if any, issuable upon the
exercise of any Warrant prior to such adjustment; PROVIDED, HOWEVER,
that the Company shall deliver to the holder a due bill or other
appropriate instrument evidencing the holder's right to receive such
additional shares or securities upon the occurrence of the
event requiring such adjustment.
(f) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent
8
<PAGE> 10
(1%) in the number of Warrant Shares purchasable upon the exercise of
each Warrant; PROVIDED, HOWEVER, that any adjustments which by reason
of this paragraph (f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations shall be made to the nearest one-thousandth of a share.
(g) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant
Price payable upon the exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares purchasable immediately thereafter.
(h) No adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant need be made under paragraphs (b)
and (c) if the Company issues or distributes to each Holder of
Warrants the rights, options, warrants, or convertible or exchangeable
securities, or evidences of indebtedness or assets referred to in those
paragraphs which each Holder of Warrants would have been entitled to
receive had the Warrants been exercised prior to the happening of such
event or the record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. No adjustment need
be made for a change in the par value of the Warrant Shares.
(i) For the purpose of this Section 9.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders shall become entitled to
purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Warrant Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in paragraphs (a) through (h), inclusive,
above, and the provisions of Section 5
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<PAGE> 11
and Sections 9.2 through 9.5, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
(j) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (A) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (B) such shares of Common
Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or
conversion or exchange rights whether or not exercised; PROVIDED,
HOWEVER, that no such readjustment shall have the effect of increasing
the Warrant Price or decreasing the number of Warrant Shares by an
amount in excess of the amount of the adjustment initially made with
respect to the issuance, sale or grant of such rights, options,
warrants or conversion or exchange rights.
9.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its option,
at any time during the term of the Warrants, reduce the then current Warrant
Price to any amount determined appropriate by the Board of Directors of the
Company.
9.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price of such
Warrant Shares after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate, absent manifest error, shall be
conclusive evidence of the correctness of such adjustment.
10
<PAGE> 12
9.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
9.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC. In
case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, transfer or
lease had such Warrant been exercised immediately prior to such action
regardless of whether the Warrants are exercisable at the time of such action;
PROVIDED, HOWEVER, that no adjustment in respect of dividends, interest or other
income on or from such shares or other securities and property shall be made
during the term of a Warrant or upon the exercise of a Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The provisions of
this Section 9.5 shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
9.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in the Warrant
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 10 be issuable on
the exercise of any Warrant (or specified portion
11
<PAGE> 13
thereof), the Company shall pay an amount in cash equal to the closing price for
one share of the Common Stock, as determined in accordance with paragraph (d) of
Section 9.1, on the trading day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction.
11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Consultant represents
and warrants to the Company that Consultant will not dispose of any such
Warrants or Warrant Shares except pursuant to (i) an effective registration
statement, or (ii) an applicable exemption from registration under the
Securities Act of 1933 (the "Act"). In connection with any sale by Consultant
pursuant to clause (ii) of the preceding sentence, Consultant shall furnish to
the Company an opinion of counsel reasonably satisfactory to the Company to the
effect that such exemption from registration is available in connection with
such sale.
12. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend by which each Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON
STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT, OR (II) AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933. ANY SALE PURSUANT TO CLAUSE (II) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE."
The Warrant Shares or other securities issued upon exercise of the Warrants
shall, unless issued pursuant to an effective Registration Statement, be subject
to a stop-transfer order and the certificate or certificates evidencing any such
Warrant Shares or securities shall bear the following legend by which the Holder
thereof shall be bound:
"THE SHARES OR OTHER SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
12
<PAGE> 14
REGISTRATION STATEMENT, OR (II) AN APPLICABLE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY SALE PURSUANT TO
CLAUSE (II) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL TO THE EFFECT THAT SUCH EXEMPTION FROM REGISTRATION
IS AVAILABLE IN CONNECTION WITH SUCH SALE."
13. RULE 144. With a view to making available to Holders the benefits of
certain rules of the Securities and Exchange Commission (the "Commission") that
may permit the sale of Registrable Securities to the public without
registration, the Company hereby covenants and agrees to use its best efforts to
file in a timely manner all reports and other documents required to be filed by
it under the Act and the Securities Exchange Act of 1934 and the rules and
regulations adopted by the Commission thereunder necessary to permit sales under
Rule 144 under the Act, and the Company will take such further action to the
extent required from time to time to enable Holders to sell Warrant Shares
(whether or not any such securities have been the subject of a demand or
piggy-back request under Section 13 hereof) without registration under the
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of a Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
14. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS. Nothing contained in this
Agreement or in any of the Warrants shall be construed as conferring upon the
Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as stockholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any of
the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into or exchangeable for shares of
13
<PAGE> 15
Common Stock or any right to subscribe to or purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer
or lease or all or substantially all of its property, assets, and
business as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Holders as provided in Section 15 hereof and (b) if
there are more than 100 Holders, cause notice of such event to be published once
in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 15 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the publication
or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up.
15. NOTICES. Any notice pursuant to this Agreement to be given or made by
the Holder of any Warrant or Warrant Shares to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Benton Oil and Gas Company
300 Esplanade Drive
Suite 2000
Oxnard, California 93030
Attention: David H. Pratt
Notices or demands authorized by this Agreement to be given or made to or on the
Holder of any Warrant or Warrant Shares shall be sufficiently given or made
(except as otherwise provided in this Agreement) if sent by registered mail,
return receipt requested, postage prepaid, addressed to such Holder at the
address of such Holder as shown on the Warrant Register or the Common Stock
Register, as the case may be.
14
<PAGE> 16
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
17. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders may from time
to time supplement or amend this Agreement in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable and which shall not be inconsistent with
the provisions of the Warrants and which shall not adversely affect the
interests of the Holders. Any amendment to this Agreement may be effected with
the consent of Holders of at least 66 2/3% of the Warrants (for this purpose
Warrant Shares shall be deemed to be Warrants in the proportion that Warrant
Shares are then issuable upon the exercise of Warrants); provided that, any
amendment which shall have the effect of materially adversely affecting the
interests of any Holder shall not be effective with respect to such Holder if
such Holder shall not have consented thereto.
18. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
19. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Agreement
remains in effect, the Company will not merge or consolidate with or into, or
sell, transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing corporation, as the case may be
(if not the Company), shall expressly assume, by supplemental agreement executed
and delivered to the Holders, the due and punctual performance and observance of
each and every covenant and condition of this Agreement to be performed and
observed by the Company.
20. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders of the Warrants and Warrant Shares.
15
<PAGE> 17
21. CAPTIONS. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
BENTON OIL AND GAS COMPANY
By:
-----------------------------------
David H. Pratt,
Vice President - Finance
(CORPORATE SEAL)
Attest:
- -------------------------
Toni L. Jackson
16
<PAGE> 18
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. 2,500 Warrant
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON JULY 13, 1997
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received George T. E. Hicks, the registered
holder hereof or registered assigns (the "Holder"), is the owner of the number
of Warrants set forth above, each of which entitles the owner thereof to
purchase at any time from 9:00 A.M., Los Angeles time, on July 13, 1992, until
5:00 P.M., Los Angeles time, on July 13, 1997, one fully paid and
nonassessable share of the Common Stock (subject to adjustment), par value $0.01
per share (the "Common Stock"), of Benton Oil and Gas Company, a Delaware
corporation (the "Company"), at the purchase price of $7.30 per share, subject
to adjustment (the "Warrant Price"). Payment of the Warrant Price may be made in
cash, by certified or official bank check.
This Warrant Certificate is subject to, and entitled to the benefits of,
all of the terms, provisions and conditions of an agreement dated July 13, 1992
(the "Warrant Agreement") between the Company and George T. E. Hicks which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Company and the Holders of the Warrant Certificates.
Copies of the Warrant Agreement are on file at the principal office of the
Company.
17
<PAGE> 19
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the Holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such Holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its Vice President and Secretary be printed hereon
and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
--------------------------------
David H. Pratt,
Vice President-Finance
Attest:
- -------------------------
Toni L. Jackson
18
<PAGE> 20
PURCHASE FORM
(To be executed upon exercise of Warrant). To Benton Oil and Gas Company:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and tenders herewith payment of
the purchase price in full in the form of cash or a certified or official bank
check in the amount of $___________.
Please issue a certificate or certificates for such shares of Common Stock
in the name of, and pay any cash for any fractional share to:
Name
---------------------------------
(Please Print Name, Address
and Social Security No.)
Signature
------------------------------
NOTE: The above signature
should correspond exactly
with the name on the face
of this Warrant Certificate
or with the name of
assignee appearing in the
assignment form below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
Dated: , 19 Signature
---------------- -- -------------------------------
----------------------------------------
Please Print Name
19
<PAGE> 21
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate.)
For value received, ___________________________ hereby sells, assigns and
transfers unto _________________________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ________________, attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated: , 19
--------------- --
-------------------------------------------------
NOTE: The above signature should correspond
exactly with the name on the face of this Warrant
Certificate.
20
<PAGE> 1
EXHIBIT 4.6
WARRANT AGREEMENT
BETWEEN
BENTON OIL AND GAS COMPANY
AND
DATED AS OF OCTOBER 30, 1992
<PAGE> 2
WARRANT AGREEMENT dated as of October 30, 1992, between Benton Oil and
Gas Company, a Delaware corporation (the "Company") and ______________________
("Holder").
WHEREAS, the Company proposes to issue to the Holder as partial
compensation for its agreement to sell the partnership assets of the Benton Oil
& Gas Drilling Partnership 1989-3 L.P. (the "Partnership") and another for
Benton Oil & Gas Drilling Program 1990-1 L.P. (the "Partnership") common stock
purchase warrants (the "Warrants") to purchase up to _________ shares (the
"Warrant Shares") of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), each Warrant entitling the holder thereof to purchase one share
of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein and in the Agreement set forth and for other good and valuable
consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and
deliver the Warrants to Holder, in consideration for, and as part of the
compensation to Holder in connection with the sale of the assets of the
Partnership. The number of Warrants to be issued and delivered shall be
________. No cash consideration will be paid by Holder for the Warrants. The
text of each Warrant, of the purchase form and of each assignment form to be
printed on the reverse thereof shall be substantially as set forth in Exhibit A
attached hereto. The Warrants shall be executed on behalf of the Company by the
manual or facsimile signature of the present or any future Chairman of the
Board, President, Treasurer or Vice President of the Company, under its
corporate seal, affixed or in facsimile, attested by the manual or facsimile
signature of the present or future Secretary or an Assistant Secretary of the
Company. A Warrant bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them shall have ceased to hold
such offices prior to the delivery of such Warrant or did not hold such offices
on the date of this Agreement.
Warrants shall be dated as of the date of execution thereof by the
Company either upon initial issuance or upon division, exchange, substitution or
transfer.
2. REGISTRATION. The Warrants shall be numbered and shall be registered
on the books of the Company (the "Warrant Register") as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register (the
1
<PAGE> 3
"Holder") as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with knowledge of such facts that its participation
therein amounts to bad faith. The Warrants shall be registered initially in the
name of Holder in such denominations as Holder may request in writing to the
Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
at the option of the Holder thereof for another certificate or certificates of
different denominations entitling the Holder thereof to purchase upon surrender
to the Company or its duly authorized agent a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates, as the case may be,
as so requested. Any Warrant issued upon exchange, transfer or partial exercise
of the Warrants shall be the valid obligation of the Company, evidencing the
same generic rights and entitled to the same generic benefits under this
Agreement as the Warrants surrendered for such exchange, transfer or exercise.
4. RESTRICTIONS ON TRANSFER. From the date hereof until October 30,
1994 (the "Restricted Period"), the Warrants and the Warrant Shares may not be
sold, transferred, assigned or hypothecated except by operation of law. The
Warrants shall be transferable only on the Warrant Register upon delivery to the
Company of the Warrant certificate or certificates duly endorsed by the Holder
or by his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. In all cases of
transfer by an attorney, the original power of attorney, duly approved, or an
official copy thereof, duly certified, shall be deposited with the Company. In
case of transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to
2
<PAGE> 4
the person entitled thereto. Notwithstanding the foregoing and whether or not
during the Restricted Period, the Company shall have no obligation to cause
Warrants to be transferred on its books to any person, unless the Holder of such
Warrants shall furnish to the Company evidence of compliance with the Securities
Act of 1933, as amended (the "Act"), in accordance with the provisions of
Section 11 of this Agreement.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Holder thereof to purchase one
share of Common Stock subject to adjustment in accordance with Section
9 hereof at any time from 9:00 A.M., Los Angeles time, on October 1,
1993 until 5:00 P.M., Los Angeles time, on October 30, 1997 (the
"Expiration Date") at a purchase price of $10.00 per share.
(b) The Warrant Price and the number of shares issuable upon
exercise of Warrants are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 9 of this
Agreement. Subject to the provisions of this Agreement, each Holder
shall have the right, which may be exercised as expressed in such
Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully paid and nonassessable shares
of Common Stock specified in such Warrants, upon surrender to the
Company, or its duly authorized agent, of such Warrants, with the
purchase form on the reverse thereof duly filled in and signed, and
upon payment to the Company of the Warrant Price, as adjusted in
accordance with the provisions of Section 9 of this Agreement, for the
number of shares in respect of which such Warrants are then exercised.
Payment of such Warrant Price may be made only in cash, or by certified
or official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and (subject to receipt of
evidence of compliance with the Act in accordance with the provisions of Section
11 of this Agreement) in such name or names as the Holder may designate, a
certificate or certificates for the number of full shares of Common Stock so
purchased upon the exercise of such Warrants, together with cash, as provided in
Section 10 of this Agreement, in respect of any fraction of a share of such
stock otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such
3
<PAGE> 5
shares as of the date of the surrender of such Warrants and payment of the
Warrant Price as aforesaid; PROVIDED, HOWEVER, that if, at the time of surrender
of the Warrant and payment of such Warrant Price, the transfer books for the
Common Stock or other class of stock purchasable upon the exercise of the
Warrants shall be closed, the certificates for the shares in respect of which
the Warrants are then exercised shall be issuable as of the date on which such
books shall next be opened whether before, on or after the Expiration Date and
until such date the Company shall be under no duty to deliver any certificate
for such shares; PROVIDED, FURTHER, however, that the transfer books shall not
be closed at any one time for a period longer than five days unless otherwise
required by law. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the Holders thereof, either in full or from time
to time in part and, in the event that any Warrant is exercised in respect of
less than all of the shares purchasable on such exercise at any time prior to
the Expiration Date, a new certificate evidencing the remaining Warrant or
Warrants will be issued.
5.1. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that
if any shares of Common Stock required to be reserved for purposes of exercise
or conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange, before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case may be, PROVIDED, HOWEVER, that in no event
shall such shares of Common Stock be issued, and the Company is hereby
authorized to suspend the exercise of all Warrants, for the period during which
such registration, approval or listing is required but not in effect.
6. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants and any securities issued pursuant to Section 9 hereof; 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 issue or delivery of
any Warrants or certificates for Warrant Shares and any securities issued
pursuant to Section 9 hereof in a name other than that of the Holder of such
Warrants.
4
<PAGE> 6
7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest; but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity or
bond, if requested, also reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company
may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF
WARRANTS. There have been reserved out of the authorized and unissued shares of
Common Stock, a number of shares sufficient to provide for the exercise of the
rights of purchase represented by the Warrants, and the transfer agent for the
Common Stock ("Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be issuable as provided in Section
10 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section 9.3
hereof. All Warrants surrendered in the exercise of the rights thereby evidenced
shall be cancelled, and such cancelled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants (subject to adjustment as herein provided). No shares
of stock shall be subject to reservation in respect of the Warrants subsequent
to the Expiration Date except to the extent necessary to comply with the terms
of this Agreement.
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<PAGE> 7
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined.
9.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification of its shares of Common
Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto
shall be adjusted so that the Holder of each Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of
the Company which he would have owned or have been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event
or any record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or warrants to
all holders of its outstanding Common Stock, without any charge to such
holders, entitling them (for a period expiring within 60 days after the
record date mentioned below) to subscribe for or purchase shares of
Common Stock at a price per share which is lower at the record date
mentioned below than the then current market price per share of Common
Stock (as determined in accordance with paragraph (e) below), the
number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of additional shares of Common
Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights, options or warrants plus
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<PAGE> 8
the number of shares which the aggregate offering price of the total
number of shares of common stock so offered would purchase at the
current market price per share of Common Stock at such record date.
Such adjustment shall be made whenever such rights, options or warrants
are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of consolidated
earnings or earned surplus and dividends or distributions referred to
in paragraph (a) above or in the paragraph immediately following this
paragraph) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in
paragraph (b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined in accordance with paragraph (e) below) on
the date of such distribution, and of which the denominator shall be
the then current market price per share of Common Stock, less the then
fair value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive
such distribution.
In the event of distribution by the Company to all holders of
its shares of Common Stock of stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an
adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant, the Holder of each Warrant, upon the exercise
thereof at any time after such distribution, shall be entitled to
receive from the Company,
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<PAGE> 9
such subsidiary or both, as the Company shall determine, the stock or
other securities to which such Holder would have been entitled if such
Holder had exercised such Warrant immediately prior thereto regardless
of whether the Warrants are exercisable at such time, all subject to
further adjustment as provided in this subsection 9.1; PROVIDED,
HOWEVER, that no adjustment in respect of dividends or interest on such
stock or other securities shall be made during the term of a Warrant or
upon the exercise of a Warrant.
(d) In case the Company shall sell and issue shares of Common
Stock (other than pursuant to rights, options, warrants, or convertible
securities initially issued before the date of this Agreement) or
rights, options, warrants or convertible securities containing the
right to subscribe for or purchase shares of Common Stock (excluding
shares, rights, options, warrants or convertible securities issued in
any of the transactions described in paragraphs (a), (b) or (c) above)
at a price per share of Common Stock (determined, in the case of such
rights, options, warrants or convertible securities, by dividing (w)
the total of the amount received or receivable by the Company
(determined as provided below) in consideration of the sale and
issuance of such rights, options, warrants or convertible securities,
by (x) the total number of shares of Common Stock covered by such
rights, options, warrants or convertible securities) lower than the
then current market price per share of Common Stock (as determined in
accordance with paragraph (e) below) in effect immediately prior to
such sale and issuance, then the number of Warrant Shares thereafter
purchasable upon the exercise of the Warrants shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon
exercise by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such
shares, rights, options, warrants or convertible securities plus the
number of additional shares of Common Stock sold or subject to issuance
pursuant to such rights, options, warrants or convertible securities,
and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such shares, rights,
options, warrants or convertible securities plus the number of shares
of Common Stock which the aggregate consideration received or
receivable (determined as provided below) for such sale or issuance
would purchase at such current market price per share. Such adjustment
shall be made successively whenever such an issuance is made. For the
purposes of such adjustments, the consideration received or receivable
by the Company for rights, options, warrants or convertible securities
shall be deemed to be the consideration received by the Company for
8
<PAGE> 10
such rights, options, warrants or convertible securities, plus the
consideration or premiums stated in such rights, options, warrants or
convertible securities to be paid for the shares of Common Stock
covered thereby. In case the Company shall sell and issue shares of
Common Stock, or rights, options, warrants or convertible securities
containing the right to subscribe for or purchase shares of Common
Stock, for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then in determining the "price per
share of Common Stock" and the "consideration received or receivable by
the Company" for purposes of the first sentence of this paragraph (d),
the Board of Directors shall determine, in its discretion, the fair
value of said property, and such determination, if made in good faith,
shall be binding upon all Holders.
(e) For the purpose of any computation under paragraphs (b),
(c) and (d) of this Section, the current market price per share of
Common Stock at any date shall be the daily closing price of the
Company's Common Stock, as reported by the American Stock Exchange. The
closing price for such day shall be the last such reported sales price
regular way or, in case no such reported sale takes place on such day,
the average of the closing bid and asked prices regular way for such
day, in each case on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or,
if not listed or admitted to trading, the average of the closing bid
and asked prices of the Common Stock in the over-the-counter market as
reported by NASDAQ or any comparable system. In the absence of one or
more such quotations, the Board of Directors of the Company shall
determine the current market price, in good faith, on the basis of such
quotations as it considers appropriate. Notwithstanding the foregoing,
for the purpose of any calculation under paragraph (d) above (A) with
respect to any issuance of options under the Company's employee or
director compensation stock option plans as in effect or as adopted by
the Board of Directors of the Company on the date hereof, the term
"current market price" in such instances shall mean the fair market
price on the date of the issuance of any such option determined in
accordance with the Company's employee compensation stock option plans
as in effect or as adopted by the Board of Directors of the Company on
the date hereof; (B) with respect to any issuances of Common Stock (or
rights, options, warrants or convertible securities containing the
right to subscribe for or purchase shares of Common Stock) in
connection with bona fide corporate transactions (other than issuances
in such transactions for cash or similar consideration), the term "fair
market price" shall mean the
9
<PAGE> 11
fair market price per share as determined in arm's-length negotiations
by the Company and such other parties (other than affiliates or
subsidiaries of the Company) to such transactions as reflected in the
definitive documentation with respect thereto, unless such
determination is not reasonably related to the closing market price on
the date of such determination; and (c) with respect to any issuance of
the Company's common stock for cash or similar consideration in a firm
commitment underwriting, the current fair market price shall be the
price the shares are sold at, regardless of whether such price is
higher or lower than the quoted price on the date of the sale and
therefore no adjustment will be made.
(f) In any case in which this Section 9.1 shall require that
any adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the occurrence of the event the issuing to the
Holder of any Warrant exercised after that record date the shares of
Common Stock and other securities of the Company, if any, issuable upon
the exercise of any Warrant over and above the shares of Common Stock
and other securities of the Company, if any, issuable upon the exercise
of any Warrant prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to the holder a due bill or other appropriate
instrument evidencing the holder's right to receive such additional
shares or securities upon the occurrence of the event
requiring such adjustment.
(g) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Warrant Shares purchasable upon the exercise of each Warrant; PROVIDED,
HOWEVER, that any adjustments which by reason of this paragraph (g) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(h) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant
Price payable upon the exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares purchasable immediately thereafter.
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<PAGE> 12
(i) No adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant need be made under paragraphs (b),
(c) and (d) if the Company issues or distributes to each Holder of
Warrants the rights, options, warrants, or convertible or exchangeable
securities, or evidences of indebtedness or assets referred to in those
paragraphs which each Holder of Warrants would have been entitled to
receive had the Warrants been exercised prior to the happening of such
event or the record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. No adjustment need
be made for a change in the par value of the Warrant Shares.
(j) For the purpose of this Section 9.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders shall become entitled to
purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so purchasable
upon exercise of each Warrant and the Warrant Price of such securities
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraphs (a) through (i),
inclusive, above, and the provisions of Section 5 and Sections 9.2
through 9.5, inclusive, with respect to the Warrant Shares, shall apply
on like terms to any such other securities.
(k) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (A) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (B) such shares of Common
Stock, if any, were issued or sold for the consideration actually
received by the Company upon such
11
<PAGE> 13
exercise plus the aggregate consideration, if any, actually received by
the Company for the issuance, sale or grant of all such rights,
options, warrants or conversion or exchange rights whether or not
exercised; PROVIDED, HOWEVER, that no such readjustment shall have the
effect of increasing the Warrant Price or decreasing the number of
Warrant Shares by an amount in excess of the amount of the adjustment
initially made with respect to the issuance, sale or grant of such
rights, options, warrants or conversion or exchange rights.
9.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount determined appropriate by the Board of Directors of
the Company.
9.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price of such
Warrant Shares after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate, absent manifest error, shall be
conclusive evidence of the correctness of such adjustment.
9.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
9.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and
12
<PAGE> 14
property which he would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had such
Warrant been exercised immediately prior to such action regardless of whether
the Warrants are exercisable at the time of such action; PROVIDED, HOWEVER, that
no adjustment in respect of dividends, interest or other income on or from such
shares or other securities and property shall be made during the term of a
Warrant or upon the exercise of a Warrant. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 9. The provisions of this Section 9.5
shall similarly apply to successive consolidations, mergers, sales, transfers or
leases.
9.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 10, be issuable
on the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount in cash equal to the closing price for one share of the Common
Stock, as determined in accordance with paragraph (e) of Section 9.1, on the
trading day immediately preceding the date the Warrant is presented for
exercise, multiplied by such fraction.
11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Holder represents
and warrants to the Company that Holder will not dispose of any such Warrants or
Warrant Shares except pursuant to (i) an effective registration statement, or
(ii) an applicable exemption from registration under the Securities Act of 1933
(the "Act"). In connection with any sale by Holder pursuant to clause (ii) of
the preceding sentence, Holder shall furnish to the Company an opinion of
counsel reasonably satisfactory to the Company to the effect that such exemption
from registration is available in connection with such sale.
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<PAGE> 15
11a. Registration on Demand
----------------------
(a) One time, upon the written request of the Holder, the Company will
notify all other holders and upon written request the Holder and other persons
who together with Holder own twenty-five percent of the Warrant Stock issued in
connection with the Offering ("Requesting Holders") that the Company effect
registration, qualification or compliance under the Securities Act and state
securities laws of all or part of the Registrable Securities of the Requesting
Holders and specifying the intended method of disposition thereof, the Company
shall (i) promptly thereupon give written notice of the proposed registration to
all other holders of Warrant Stock issued in connection with the Offering and
(ii) effect, as soon as practicable and within 90 days after such request, all
such registrations, qualifications and compliances under the Securities Act and
state securities law of the Registrable Securities which the Company has been so
requested to register by Requesting Holders and any other holder or holders
joining in such registration as specified in a written request received by the
Company within 15 business days after the Company's notice to the extent
requisite to permit the sale and distribution of such securities; provided,
however, that the Company shall not be obligated to effect a registration under
the Securities Act pursuant to this Section 3 before October 1, 1993.
(b) A registration requested pursuant to this Section will not be
deemed to have been effected (i) unless it has become effective and remained
effective for the period of not less than 180 days.
(c) If Requesting Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section and
provide the name of the managing underwriter or underwriters that the majority
in interest of such Requesting Holders would propose to employ in connection
with the public offering proposed to be made pursuant to the registration
requested; provided that if the Company reasonable objects to any managing
underwriter or underwriters proposed by Requesting Holders, the Requesting
Holders shall propose another managing underwriter or underwriters. If the sale
proposed by the Requesting Holders is to be effected pursuant to an underwritten
public offering, the right of Holder to registration pursuant to this Section 3
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
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<PAGE> 16
Requesting Holders and such Holder) to the extent provided herein. The Company
and the Requesting Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting, and shall
execute powers of attorney and custodial agreements in customary form for
selling same.
12. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be
subject to a stop-transfer order and the certificate or
certificates therefor shall bear the following legend by which each
Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES
OF COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT, OR (II) AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933.
ANY SALE PURSUANT TO CLAUSE (II) OF THE PRECEDING SENTENCE
MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH EXEMPTION
FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE."
The Warrant Shares or other securities issued upon exercise of the
Warrants shall, unless issued pursuant to an effective registration statement,
be subject to a stop-transfer order and the certificate or certificates
evidencing any such Warrant Shares or securities shall bear the following legend
by which the Holder thereof shall be bound:
"THE SHARES OR OTHER SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT, OR (II) AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933. ANY SALE PURSUANT TO
CLAUSE (II) OF THE PRECEDING SENTENCE MUST BE
ACCOMPANIED BY AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH EXEMPTION FROM REGISTRATION
IS AVAILABLE IN CONNECTION WITH SUCH SALE."
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<PAGE> 17
13. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as stockholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any of
the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any
right to subscribe to or purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer
or lease or all or substantially all of its property, assets, and
business as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Holders as provided in Section 15 hereof and (b) if
there are more than 100 Holders, cause notice of such event to be published once
in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 15 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the publication
or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up.
14. NOTICES. Any notice pursuant to this Agreement to be given or
made by the Holder of any Warrant or Warrant Shares to or
16
<PAGE> 18
on the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows:
Benton Oil and Gas Company
300 Esplanade Drive
Suite 2000
Oxnard, California 93030
Attention: David H. Pratt
Notices or demands authorized by this Agreement to be given or made to or on the
Holder of any Warrant or Warrant Shares shall be sufficiently given or made
(except as otherwise provided in this Agreement) if sent by registered mail,
return receipt requested, postage prepaid, addressed to such Holder at the
address of such Holder as shown on the Warrant Register or the Common Stock
Register, as the case may be.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
16. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders may from
time to time supplement or amend this Agreement in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Holder may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interests of the Holders. Any amendment to this Agreement may be
effected with the consent of Holders of at least 66 2/3% of the Warrants (for
this purpose Warrant Shares shall be deemed to be Warrants in the proportion
that Warrant Shares are then issuable upon the exercise of Warrants); provided
that, any amendment which shall have the effect of materially adversely
affecting the interests of any Holder shall not be effective with respect to
such Holder if such Holder shall not have consented thereto.
17. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
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<PAGE> 19
18. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Agreement
remains in effect, the Company will not merge or consolidate with or into, or
sell, transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing corporation, as the case may be
(if not the Company), shall expressly assume, by supplemental agreement executed
and delivered to the Holders, the due and punctual performance and observance of
each and every covenant and condition of this Agreement to be performed and
observed by the Company.
19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders of the Warrants and Warrant Shares.
20. CAPTIONS. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
BENTON OIL AND GAS COMPANY
By:
--------------------------------
David H. Pratt,
Vice President-Finance
(CORPORATE SEAL)
Attest:
- ----------------------------
Toni L. Jackson
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<PAGE> 20
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. UD-1 _________Warrants
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON APRIL 22, 1997
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received ______________, the registered
holder hereof or registered assigns (the "Holder"), is the owner of the number
of Warrants set forth above, each of which entitles the owner thereof to
purchase at any time from 9:00 A.M., Los Angeles time, on November 1, 1993,
until 5:00 P.M., Los Angeles time, on April 22, 1997, one fully paid and
nonassessable share of the Common Stock (subject to adjustment), par value $0.01
per share (the "Common Stock"), of Benton Oil and Gas Company, a Delaware
corporation (the "Company"), at the purchase price of $10.297 per share, subject
to adjustment (the "Warrant Price"). Payment of the Warrant Price may be made in
cash, or by certified or official bank check.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated May 15,
1992 (the "Warrant Agreement") between the Company and _______________________
which Warrant Agreement is hereby incorporated herein by reference and made a
part hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, A-1
<PAGE> 21
duties and immunities hereunder of the Company and the Holders of the Warrant
Certificates. The Warrants shall not be sold, transferred, assigned,
hypothecated or otherwise disposed of prior to the close of business on April
22, 1993 except to the extent set forth in the Warrant Agreement. Copies of the
Warrant Agreement are on file at the principal office of the Company.
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the Holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such Holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
A-2
<PAGE> 22
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its Vice President and Secretary to be printed
hereon and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
------------------------------
David H. Pratt
Vice President-Finance
Attest:
- --------------------------------
Toni L. Jackson, Secretary
A-3
<PAGE> 23
PURCHASE FORM
(To be executed upon exercise of Warrant). To Benton Oil and
Gas Company:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $___________.
Please issue a certificate or certificates for such shares of Common
Stock in the name of, and pay any cash for any fractional share to:
Name
---------------------------------
(Please Print Name, Address and
Social Security No.)
Signature
----------------------------
NOTE: The above signature should
correspond exactly with the name on
the face of this Warrant Certificate
or with the name of assignee appearing
in the assignment form below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
Dated: , 19 Signature
-------------- --- ----------------------------
-------------------------------------
Please Print Name
A-4
<PAGE> 24
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate.)
For value received, hereby sells, assigns and transfers
unto the within Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
, attorney, to transfer said Warrant Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: , 19
--------------- ---
-------------------------------
NOTE: The above signature should
correspond exactly with the name
on the face of this Warrant
Certificate.
A-5
<PAGE> 1
Exhibit 4.7
WARRANT AGREEMENT
BETWEEN
BENTON OIL AND GAS COMPANY
AND
VENEZOLANA DE INVERSIONES Y CONSTRUCCIONES CLERICO, C.A.
DATED AS OF JULY 15, 1994
<PAGE> 2
This WARRANT AGREEMENT is dated as of July 15, 1994, between Benton Oil
and Gas Company, a Delaware corporation (the "Company") and Venezolana de
Inversiones y Construcciones Clerico, C.A., a Venezuela corporation
("Consultant").
WHEREAS, Consultant has provided certain consulting services to the
Company in connection with its Venezuelan operations and the Company and the
Consultant contemplate that Consultant may be asked to render similar consulting
services to the Company in the future.
WHEREAS, the Company proposes to issue to Consultant as compensation
for consulting services previously rendered and Consultant's agreement to
provide such similar services in the future as may be necessary, common stock
purchase warrants (the "Warrants") to purchase up to 150,000 shares (the
"Warrant Shares") of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), each Warrant entitling the holder thereof to purchase one share
of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein and for other good and valuable consideration, the parties
hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and
deliver the Warrants to Consultant in consideration for, and as compensation to
Consultant in connection with consulting services rendered to the Company and
for Consultant providing similar services to the Company in the future. The
number of Warrants to be issued and delivered shall be 150,000. No cash
consideration will be paid by Consultant for the Warrants. The text of each
Warrant, of the purchase form and of each assignment form to be printed on the
reverse thereof shall be substantially as set forth in Exhibit A attached
hereto. The Warrants shall be executed on behalf of the Company by the manual or
facsimile signature of the present or any future Chairman of the Board,
President, Treasurer or Vice President of the Company, under its corporate seal,
affixed or in facsimile, attested by the manual or facsimile signature of the
present or future Secretary or an Assistant Secretary of the Company. A Warrant
bearing the manual or facsimile signature of individuals who were at any time
the proper officers of the Company shall bind the Company notwithstanding that
such individuals or any of them shall have ceased to hold such offices prior to
the delivery of such Warrant or did not hold such offices on the date of this
Agreement.
Warrants shall be dated as of the date of execution thereof by the
Company either upon initial issuance or upon division, exchange, substitution or
transfer.
2. REGISTRATION. The Warrants shall be numbered and shall be registered
on the books of the Company (the "Warrant Register") as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register (the "Holder") as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a
1
<PAGE> 3
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with knowledge of such facts that its participation therein amounts to bad
faith. The Warrants shall be registered initially in the name of Consultant in
such denominations as Consultant may request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
at the option of the Holder thereof for another certificate or certificates of
different denominations entitling the Holder thereof to purchase upon surrender
to the Company or its duly authorized agent a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates, as the case may be,
as so requested. Any Warrant issued upon exchange, transfer or partial exercise
of the Warrants shall be the valid obligation of the Company, evidencing the
same generic rights and entitled to the same generic benefits under this
Agreement as the Warrants surrendered for such exchange, transfer or exercise.
4. RESTRICTIONS ON TRANSFER. The Warrants shall be transferable only on
the Warrant Register upon delivery to the Company of the Warrant certificate or
certificates duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited with the Company in its discretion. Upon any registration of transfer,
the Company shall deliver a new Warrant or Warrants to the person entitled
thereto. Notwithstanding the foregoing the Company shall have no obligation to
cause Warrants to be transferred on its books to any person, unless the Holder
of such Warrants shall furnish to the Company evidence of compliance with the
Securities Act of 1933, as amended (the "Act"), in accordance with the
provisions of Section 11 of this Agreement.
5. Term of Warrants; Exercise of Warrants.
--------------------------------------
(a) Each Warrant entitles the Holder thereof to purchase one
share of Common Stock subject to adjustment in accordance with Section
9 hereof, until 5:00 P.M., Los Angeles time, on July 15, 2004 (the
"Expiration Date") at a purchase price of $7.50 per share (the "Warrant
Price"), at the following times when such Warrant shall become
exercisable (the "Date Exercisable"):
2
<PAGE> 4
(i) Warrants to purchase 50,000 Warrant Shares shall be
exercisable at any time from 9:00 A.M., Los Angeles time on
July 15, 1994 to the Expiration Date;
(ii) Warrants to purchase 50,000 Warrant Shares shall become
exercisable at any time from 9:00 A.M., Los Angeles time on
July 15, 1995 to the Expiration Date; and
(iii) Warrants to purchase 50,000 Warrant Shares shall become
exercisable at any time from 9:00 A.M., Los Angeles time on
July 15, 1996 to the Expiration Date.
(b) The Warrant Price and the number of shares issuable upon
exercise of Warrants are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 9 of this
Agreement. Subject to the provisions of this Agreement, each Holder
shall have the right, which may be exercised as expressed in such
Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully paid and nonassessable shares
of Common Stock specified in such Warrants, upon surrender to the
Company, or its duly authorized agent, of such Warrants, with the
purchase form on the reverse thereof duly filled in and signed, and
upon payment to the Company of the Warrant Price, as adjusted in
accordance with the provisions of Section 9 of this Agreement, for the
number of shares in respect of which such Warrants are then exercised.
Payment of such Warrant Price may be made only in cash, or by certified
or official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and (subject to receipt of
evidence of compliance with the Act in accordance with the provisions of Section
11 of this Agreement) in such name or names as the Holder may designate, a
certificate or certificates for the number of full shares of Common Stock so
purchased upon the exercise of such Warrants, together with cash, as provided in
Section 10 of this Agreement, in respect of any fraction of a share of such
stock otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such shares as of
the date of the surrender of such Warrants and payment of the Warrant Price as
aforesaid; PROVIDED, HOWEVER, that if, at the time of surrender of the Warrant
and payment of such Warrant Price, the transfer books for the Common Stock or
other class of stock purchasable upon the exercise of the Warrants shall be
closed, the certificates for the shares in respect of which the Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened whether before, on or after the Expiration Date and until such date
the Company shall be under no duty to deliver any certificate for such shares;
PROVIDED, FURTHER, however, that the transfer books shall not be closed at any
one time for a period longer than five days unless otherwise required by law.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part
and, in the event that any Warrant is exercised in respect of less than all of
the shares purchasable on such exercise at any time prior to the Expiration
Date, a new certificate evidencing the remaining Warrant or Warrants will be
issued.
3
<PAGE> 5
5.1. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that
if any shares of Common Stock required to be reserved for purposes of exercise
or conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange, before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case may be, PROVIDED, HOWEVER, that in no event
shall such shares of Common Stock be issued, and the Company is hereby
authorized to suspend the exercise of all Warrants, for the period during which
such registration, approval or listing is required but not in effect.
6. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants and any securities issued pursuant to Section 9 hereof; 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 issue or delivery of
any Warrants or certificates for Warrant Shares and any securities issued
pursuant to Section 9 hereof in a name other than that of the Holder of such
Warrants.
7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest; but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity or
bond, if requested, also reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF
WARRANTS. There have been reserved out of the authorized and unissued shares of
Common Stock, a number of shares sufficient to provide for the exercise of the
rights of purchase represented by the Warrants, and the transfer agent for the
Common Stock ("Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
4
<PAGE> 6
otherwise make available any cash which may be issuable as provided in Section
10 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section 9.3
hereof. All Warrants surrendered in the exercise of the rights thereby evidenced
shall be cancelled, and such cancelled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants (subject to adjustment as herein provided). No shares
of stock shall be subject to reservation in respect of the Warrants subsequent
to the Expiration Date except to the extent necessary to comply with the terms
of this Agreement.
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined.
9.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification of its shares of Common
Stock other securities of the Company (including any such reclass-
ification in connection with a consolidation or merger in which the
Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto
shall be adjusted so that the Holder of each Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of
the Company which he would have owned or have been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event
or any record date with respect thereto regardless of whether the
Warrants are exercisable at the time of the happening of such event or
at the time of any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without any
charge to such holders, entitling them (for a period expiring within 60
days after the record date mentioned below) to subscribe for or
purchase shares of Common Stock at a price per share which is lower at
the record date mentioned below than the then current market price per
share of Common Stock (as determined in accordance with paragraph (e)
below), the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon exercise of each Warrant
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance
5
<PAGE> 7
of such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of
which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the
total number of shares of common stock so offered would purchase at the
current market price per share of Common Stock at such record date.
Such adjustment shall be made whenever such rights, options or warrants
are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
shares of Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of consolidated
earnings or earned surplus and dividends or distributions referred to
in paragraph (a) above or in the paragraph immediately following this
paragraph) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in
paragraph (b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined in accordance with paragraph (e) below) on
the date of such distribution, and of which the denominator shall be
the then current market price per share of Common Stock, less the then
fair value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive
such distribution.
In the event of distribution by the Company to all holders of
its shares of Common Stock of stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an
adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant, the Holder of each Warrant, upon the exercise
thereof at any time after such distribution, shall be entitled to
receive from the Company, such subsidiary or both, as the Company shall
determine, the stock or other securities to which such Holder would
have been entitled if such Holder had exercised such Warrant
immediately prior thereto regardless of whether the Warrants are
exercisable at such time, all subject to further adjustment as provided
in this subsection 9.1; PROVIDED, HOWEVER, that no adjustment in
respect of dividends or interest on such stock or other securities
shall be made during the term of a Warrant or upon the exercise of a
Warrant.
(d) For the purpose of any computation under paragraphs (b)
and (c) of this Section, the current market price per share of Common
Stock at any date shall be the average of the last reported sales
prices of the Company's Common Stock, as reported on the National
6
<PAGE> 8
Association of Securities Dealers, Inc. - National Market System
("NASDAQ-NMS"), for 30 consecutive trading days commencing 45 trading
days before the date of such computation. The last sales price for each
day shall be the last such reported sales price regular way or, in case
no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in each case on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if not listed or
admitted to trading, the average of the closing bid and asked prices of
the Common Stock in the over-the-counter market as reported by NASDAQ
or any comparable system. In the absence of one or more such
quotations, the Board of Directors of the Company shall determine the
current market price, in good faith, on the basis of such quotations as
it considers appropriate.
(e) In any case in which this Section 9.1 shall require that
any adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the occurrence of the event the issuing to the
Holder of any Warrant exercised after that record date the shares of
Common Stock and other securities of the Company, if any, issuable upon
the exercise of any Warrant over and above the shares of Common Stock
and other securities of the Company, if any, issuable upon the exercise
of any Warrant prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to the holder a due bill or other appropriate
instrument evidencing the holder's right to receive such additional
shares or securities upon the occurrence of the event requiring such
adjustment.
(f) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Warrant Shares purchasable upon the exercise of each Warrant; PROVIDED,
HOWEVER, that any adjustments which by reason of this paragraph (f) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(g) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant
Price payable upon the exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares purchasable immediately thereafter.
(h) No adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant need be made under paragraphs (b) and
(c) if the Company issues or distributes to each Holder of Warrants the
rights, options, warrants, or convertible or exchangeable securities,
or evidences of indebtedness or assets referred to in those paragraphs
which each Holder of Warrants would have been entitled to receive had
the Warrants been exercised prior to the happening of such event or the
record date with respect thereto
7
<PAGE> 9
regardless of whether the Warrants are exercisable at the time of the
happening of such event or at the time of any record date with respect
thereto. No adjustment need be made for a change in the par value of
the Warrant Shares.
(i) For the purpose of this Section 9.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any
other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders shall become entitled to
purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so purchasable
upon exercise of each Warrant and the Warrant Price of such securities
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraphs (a) through (h),
inclusive, above, and the provisions of Section 5 and Sections 9.2
through 9.5, inclusive, with respect to the Warrant Shares, shall apply
on like terms to any such other securities.
(j) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (A) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (B) such shares of Common
Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or
conversion or exchange rights whether or not exercised; PROVIDED,
HOWEVER, that no such readjustment shall have the effect of increasing
the Warrant Price or decreasing the number of Warrant Shares by an
amount in excess of the amount of the adjustment initially made with
respect to the issuance, sale or grant of such rights, options,
warrants or conversion or exchange rights.
9.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount determined appropriate by the Board of Directors of
the Company.
9.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such
8
<PAGE> 10
adjustment or adjustments and a certificate of an officer of the Company setting
forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Warrant Price of such Warrant Shares after such adjustment and setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such certificate, absent
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
9.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
9.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, transfer or
lease had such Warrant been exercised immediately prior to such action
regardless of whether the Warrants are exercisable at the time of such action;
PROVIDED, HOWEVER, that no adjustment in respect of dividends, interest or other
income on or from such shares or other securities and property shall be made
during the term of a Warrant or upon the exercise of a Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The provisions of
this Section 9.5 shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
9.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 10, be issuable
on the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount in cash equal to the closing price for one share of the Common
Stock, as determined in accordance with paragraph (d) of Section 9.1, on the
trading day immediately preceding the date the Warrant is presented for
exercise, multiplied by such fraction.
9
<PAGE> 11
11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Consultant
represents and warrants to the Company that Consultant will not dispose of any
such Warrants or Warrant Shares except pursuant to (i) an effective registration
statement pursuant to Section 11.4 hereof, or (ii) an applicable exemption from
registration under the Securities Act of 1933 (the "Act"). In connection with
any sale by Consultant pursuant to clause (ii) of the preceding sentence,
Consultant shall furnish to the Company an opinion of counsel reasonably
satisfactory to the Company to the effect that such exemption from registration
is available in connection with such sale.
11.1 CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend by which each Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT, OR (II) AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933.
ANY SALE PURSUANT TO CLAUSE (II) OF THE PRECEDING SENTENCE
MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH EXEMPTION
FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE."
The Warrant Shares or other securities issued upon exercise of the
Warrants shall, unless issued pursuant to an effective registration statement,
be subject to a stop-transfer order and the certificate or certificates
evidencing any such Warrant Shares or securities shall bear the following legend
by which the Holder thereof shall be bound:
"THE SHARES OR OTHER SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT, OR (II) AN APPLICABLE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY SALE
PURSUANT TO CLAUSE (II) OF THE PRECEDING SENTENCE MUST BE
ACCOMPANIED BY AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH
10
<PAGE> 12
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH
SUCH SALE."
11.2 RULE 144. With a view to making available to Holders the benefits
of certain rules of the Securities and Exchange Commission (the "Commission")
that may permit the sale of securities to the public without registration, the
Company hereby covenants and agrees to use its best efforts to file in a timely
manner all reports and other documents required to be filed by it under the Act
and the Securities Exchange Act of 1934 and the rules and regulations adopted by
the Commission thereunder necessary to permit sales under Rule 144 under the
Act, and the Company will take such further action to the extent required from
time to time to enable Holders to sell Warrant Shares without registration under
the Act within the limitation of the exemptions provided by (a) Rule 144 under
the Act, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission. Upon the request of a Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
11.3 NOTICE OF PROPOSED TRANSFER; REGISTRATION NOT REQUIRED. The holder
of each Warrant or Warrant Share, by acceptance thereof, agrees to give prior
written notice to the Company of such holder's intention to transfer such
Warrant or Warrant Share relating thereto, describing briefly the manner and
circumstances of the proposed transfer; PROVIDED, HOWEVER, that no such notice
shall be required for a transfer under the registration, qualification or filing
for exemption requested in accordance with the provisions of Section 11.4
hereof. Promptly after receiving such written notice, the Company shall present
copies thereof to Company counsel. If in the opinion of such counsel the
proposed transfer may be effected without registration or qualification under
the Federal or State law of such Warrant or Warrant Shares, the Company, as
promptly as practicable, shall notify such holder of such opinion and of the
terms and conditions, if any, to be observed, whereupon such holder shall be
entitled to transfer such Warrant or Warrant Shares, all in accordance with the
terms of the notice delivered by the holder to the Company. If such counsel is
unable to render such an opinion (in which case said counsel shall set forth in
writing the basis for his legal conclusions in this regard), the proposed
transfer described in the written notice given pursuant to this subparagraph may
not be effected without such registration or qualification or without compliance
with the conditions of an exemptive regulation of the Commission or any
applicable State securities regulatory authority, the Company shall promptly
notify such holder and thereafter such holder shall not be entitled to effect
such transfer until receipt of a subsequent notice from the Company pursuant to
the immediately preceding sentence or until such registration or qualification,
filing or compliance has become effective. All fees and expenses of counsel in
connection with the rendition of the opinions provided for in this subparagraph
shall be paid by the Company.
11.4 REQUIRED REGISTRATION AND NOTICE. Upon the written request of any
holder of any Warrant or Warrant Shares setting forth such holder's intent to
transfer the Warrant Shares (or any portion thereof) ("Registrable Securities"),
describing briefly the manner and circumstances of such
11
<PAGE> 13
transfer and requesting that the Company effect a registration or qualification
or filing for exemption under applicable Federal or State law of the resale of
such Registrable Securities, the Company shall promptly give written notice to
all holders of Warrants and Warrant Shares of the proposed registration or
qualification or filing for exemption. The Company shall, subject to the
conditions of Section 11.5, as expeditiously as possible, endeavor, in good
faith, to effect the registration, qualification or filing of exemption for the
resale of the outstanding Registrable Securities of all holders of Registrable
Securities which shall have advised the Company in writing within 30 days after
the giving of such written notice by the Company of their desire to have their
Registrable Securities registered, qualified or exempted for resale, with, or
notification to or approval of, any governmental authority under the Federal or
State law, or listing with any securities exchange, which may be required
reasonably to permit the sale or other disposition of any such Registrable
Securities which the holders thereof propose to make promptly upon the
effectiveness of such registration, qualification or filing of exemption. The
Company shall undertake to have such a registration statement filed with the
Commission for the resale of the Registrable Securities declared effective by
the Commission within 60 days from the date of filing of such registration
statement by the Company.
The Company shall only be obligated by this Section 11.4 to register,
qualify or file for exemption of the resale of outstanding shares of common
stock which were received by the holders upon exercise of the Warrants prior to
the filing of the registration statement, qualification, exemption or
notification for resale of such Registrable Securities.
12
<PAGE> 14
11.5 CONDITIONS TO REQUIRED REGISTRATION. The Company shall not be
required to register, qualify or file or to use its best efforts to effect any
registration, qualification or exemption of the resale of the Registrable
Securities under the Securities Act or any applicable State securities law or
regulation pursuant to Section 11.4:
(a) more than one time in any six-month period; or
(b) more than one time in 1994; or
(c) more than one time in 1995; or
(d) more than one time in 1996; or
(e) more than one time on or after July 15, 1996; or
(f) within three months of the filing of or effectiveness of a
registration statement related to an underwritten public offering of the
Company's securities; or
(g) unless a request therefor is made to the Company by the holders of
at least 30% of the aggregate number of the Registrable Securities.
The Company shall maintain the effectiveness of any registration
statement filed in connection with any such registration and, if necessary,
amend the registration statement and supplement the prospectus (i) for a period
of two years from the effective date of such registration statement, or (ii)
until such time as the Warrant Shares registered thereunder are eleigible for
resale pursuant to the provisions of Rule 144, whichever shall occur first.
11.6 EXPENSES. The Company will pay all expenses (including without
limitation registration fees, legal expenses for counsel to the Company and
printing expenses) in connection with the registration pursuant to Section 11.4
and the offering and sale pursuant thereto, PROVIDED, HOWEVER, that the Company
shall not be obligated to pay any underwriter's or brokers discounts or
commissions or fees and expenses of legal counsel to the holders of the
Registrable Securities.
11.7 INDEMNIFICATION. In connection with any registration,
qualification, notification, or exemption of securities under Section 11.4, the
Company hereby agrees to indemnify the holder of the Registrable Securities, and
each underwriter thereof including each person, if any, who controls such
Warrant holder or stockholder within the meaning of Section 15 of the Securities
Act, against all losses, claims, damages and liabilities cause by any untrue
statement of a material fact contained in any registration statement or
prospectus or notification or offering circular (and as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any
13
<PAGE> 15
preliminary prospectus or caused by any omission, or alleged omission, to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission based on information furnished to the Company by such
holder or, as the case may be, any such underwriter for use therein, and the
Company and each officer, director and controlling person of the Company shall
be indemnified by each holder of the Registrable Securities for all such losses,
claims, damages and liabilities cause by an untrue, or alleged untrue, statement
or omission, or alleged omission, based upon information furnished to the
Company by such holder for any such use.
Promptly upon receipt by a party indemnified under this Section 11.7 of
notice of commencement of any action against such indemnified party in respect
of which indemnity or reimbursement may be sought against any indemnifying party
under this Section, such indemnified party shall notify the indemnifying party
in writing of the commencement of such action, but the failure to so notify the
indemnifying party shall not relieve it of any liability which it may have to
any indemnified party otherwise than under this Section 11.7 In case notice of
commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in and,
to the extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, by the fees and expenses of such counsel
(other than reasonable costs of investigation) shall be paid by the indemnified
party unless the indemnifying party either agrees to pay the same or fails to
assume the defense of such action with counsel satisfactory to the indemnified
party. No indemnifying party shall be liable for any settlement entered into
without its consent.
12. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as stockholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any of
the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any
right to subscribe to or purchase any thereof; or
14
<PAGE> 16
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer
or lease or all or substantially all of its property, assets, and
business as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Holders as provided in Section 13 hereof and (b) if
there are more than 100 Holders, cause notice of such event to be published once
in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 15 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
publish, mail or receive such notice or any defect therein or in the publication
or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding up.
13. NOTICES. Any notice pursuant to this Agreement to be given or made
by the Holder of any Warrant or Warrant Shares to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Benton Oil and Gas Company
300 Esplanade Drive
Suite 2000
Oxnard, California 93030
Attention: David H. Pratt
Notices authorized by this Agreement to be given or made to or on the Holder of
any Warrant or Warrant Shares shall be sufficiently given or made (except as
otherwise provided in this Agreement) if sent by registered mail, return receipt
requested, postage prepaid, addressed to such Holder at the address of such
Holder as shown on the Warrant Register or the Common Stock Register, as the
case may be.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
15. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders may from
time to time supplement or amend this Agreement in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Holder may deem necessary or desirable and which shall not be
inconsistent with the provisions
15
<PAGE> 17
of the Warrants and which shall not adversely affect the interests of the
Holders. Any amendment to this Agreement may be effected with the consent of
Holders of at least 66 2/3% of the Warrants (for this purpose Warrant Shares
shall be deemed to be Warrants in the proportion that Warrant Shares are then
issuable upon the exercise of Warrants); provided that, any amendment which
shall have the effect of materially adversely affecting the interests of any
Holder shall not be effective with respect to such Holder if such Holder shall
not have consented thereto.
16. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
17. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Agreement
remains in effect, the Company will not merge or consolidate with or into, or
sell, transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing corporation, as the case may be
(if not the Company), shall expressly assume, by supplemental agreement executed
and delivered to the Holders, the due and punctual performance and observance of
each and every covenant and condition of this Agreement to be performed and
observed by the Company.
18. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders of the Warrants and Warrant Shares.
19. CAPTIONS. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
16
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
BENTON OIL AND GAS COMPANY
BY:
----------------------------------
David H. Pratt,
Vice President-Finance
(CORPORATE SEAL)
Attest:
- ---------------------------------
Toni L. Jackson
Venezolana de Inversiones y
Construcciones Clerico, C.A.
By:
----------------------------------
Name:
--------------------------------
Title:
--------------------------------
Attest:
- ----------------------------------
Name:
-----------------------------
17
<PAGE> 19
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. 150,000 Warrants
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON JULY 15, 2004
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received Venezolana de Inversiones y
Construcciones Clerico, C.A., the registered holder hereof or registered assigns
(the "Holder"), is the owner of the number of Warrants set forth above, each of
which entitles the owner thereof to purchase at any time from the Date
Exercisable (as defined below) until 5:00 P.M., Los Angeles time, on July 15,
2004 (the "Expiration Date") to purchase one fully paid and nonassessable share
of the Common Stock (subject to adjustment), par value $0.01 per share (the
"Common Stock"), of Benton Oil and Gas Company, a Delaware corporation (the
"Company"), at the purchase price of $7.50 per share, subject to adjustment (the
"Warrant Price"). Payment of the Warrant Price may be made in cash, or by
certified or official bank check. The Warrant shall become exercisable at the
following dates (the "Date Exercisable"):
(i) Warrants to purchase 50,000 shares of Common Stock shall be
exercisable at any time from 9:00 A.M., Los Angeles time on
July 15, 1994 to the Expiration Date;
(ii) Warrants to purchase 50,000 shares of Common Stock shall
become exercisable at any time from 9:00 A.M., Los Angeles
time on July 15, 1995 to the Expiration Date; and
A-1
<PAGE> 20
(iii) Warrants to purchase 50,000 shares of Common Stock shall
become exercisable at any time from 9:00 A.M., Los Angeles
time on July 15, 1996 to the Expiration Date.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated as of July
15, 1994 (the "Warrant Agreement") between the Company and Venezolana de
Inversiones y Construcciones Clerico, C.A. which Warrant Agreement is hereby
incorporated herein by reference and made a part hereof and to which Warrant
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Company and the Holders of the Warrant Certificates. Copies of the Warrant
Agreement are on file at the principal office of the Company.
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the Holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such Holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
A-2
<PAGE> 21
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its Vice President and Secretary to be printed
hereon and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
--------------------------------
David H. Pratt
Vice President-Finance
Attest:
- -----------------------------------
Toni L. Jackson, Secretary
A-3
<PAGE> 22
PURCHASE FORM
(To be executed upon exercise of Warrant). To Benton Oil and Gas
Company:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $___________.
Please issue a certificate or certificates for such shares of Common
Stock in the name of, and pay any cash for any fractional share to:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
(Please Print Name, Address
and Social Security No.)
Signature
-------------------------------
NOTE: The above signature should correspond
exactly with the name on the face of this
Warrant Certificate or with the name of
assignee appearing in the assignment form
below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
Dated: , 19 Signature
------------------------ --- -----------------------------
Please Print Name
A-4
<PAGE> 23
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate.)
For value received, _________________ hereby sells, assigns and
transfers unto the within Warrant Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_____________, attorney, to transfer said Warrant Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated: , 19
------------------------- ---
-------------------------------------------
NOTE: The above signature should correspond
exactly with the name on the face of this
Warrant Certificate.
A-5
<PAGE> 24
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. VIN01 150,000 Warrants
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON JULY 15, 2004
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received Venezolana de Inversiones y
Construcciones Clerico, C.A., the registered holder hereof or registered assigns
(the "Holder"), is the owner of the number of Warrants set forth above, each of
which entitles the owner thereof to purchase at any time from the Date
Exercisable (as defined below) until 5:00 P.M., Los Angeles time, on July 15,
2004 (the "Expiration Date"), one fully paid and nonassessable share of the
Common Stock (subject to adjustment), par value $0.01 per share (the "Common
Stock"), of Benton Oil and Gas Company, a Delaware corporation (the "Company"),
at the purchase price of $7.50 per share, subject to adjustment (the "Warrant
Price"). Payment of the Warrant Price may be made in cash, or by certified or
official bank check. The Warrant shall become exercisable at the following dates
(the "Date Exercisable"):
(i) Warrants to purchase 50,000 shares of Common Stock shall be
exercisable at any time from 9:00 A.M., Los Angeles time on
July 15, 1994 to the Expiration Date;
(ii) Warrants to purchase 50,000 shares of Common Stock shall
become exercisable at any time from 9:00 A.M., Los Angeles
time on July 15, 1995 to the Expiration Date; and
(iii) Warrants to purchase 50,000 shares of Common Stock shall
become exercisable at any time from 9:00 A.M., Los Angeles
time on July 15, 1996 to the Expiration Date.
A-6
<PAGE> 25
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated as of July
15, 1994 (the "Warrant Agreement") between the Company and Venezolana de
Inversiones y Construcciones Clerico, C.A. which Warrant Agreement is hereby
incorporated herein by reference and made a part hereof and to which Warrant
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Company and the Holders of the Warrant Certificates. Copies of the Warrant
Agreement are on file at the principal office of the Company.
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the Holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such Holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
A-7
<PAGE> 26
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its Vice President and Secretary to be printed
hereon and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
---------------------------------
David H. Pratt
Vice President-Finance
Attest:
- ------------------------------------
Toni L. Jackson, Secretary
A-8
<PAGE> 1
Exhibit 4.8
WARRANT AGREEMENT
BETWEEN
BENTON OIL AND GAS COMPANY
and
Dated as of May 15, 1992
<PAGE> 2
WARRANT AGREEMENT dated as of May 15, 1992, between Benton Oil and Gas
Company, a Delaware corporation (the "Company") and ___________________________
("_______________").
WHEREAS, ________________ has agreed pursuant to the Seller Dealer
Agreement (the "Agreement") dated ____________ _____, 1992 to act as a selling
broker ("Selling Broker") in connection with the Company's proposed public
offering of up to $10,000,000 of 8% Convertible Subordinated Debentures due May
1, 2002 (the "Debentures").
WHEREAS, the Company proposes to issue to __________________ as partial
compensation for its agreement to act as a Selling Broker pursuant to the
Agreement, common stock purchase warrants (the "Warrants") to purchase up to
________ shares (the "Warrant Shares") of the Company's Common Stock par value
$.01 per share (the "Common Stock"), each Warrant entitling the holder thereof
to purchase one share of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein and in the Agreement set forth and for other good and valuable
consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and
deliver the Warrants to ________, or to bona fide officers or partners thereof
designated by ________, on the Closing Date referred to in the Agreement in
consideration for, and as part of the compensation to ________ in connection
with _______ acting as a Selling Broker pursuant to the Agreement. The number
of Warrants to be issued and delivered shall be ________. No cash consideration
will be paid by ________ for the Warrants. The text of each Warrant, of the
purchase form and of each assignment form to be printed on the reverse thereof
shall be substantially as set forth in Exhibit A attached hereto. The Warrants
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman of the Board, President, Treasurer or
Vice President of the Company, under its corporate seal, affixed or in
facsimile, attested by the manual or facsimile signature of the present or
future Secretary or an Assistant Secretary of the Company. A Warrant bearing
the manual or facsimile signature of individuals who were at any time the
proper officers of the Company shall bind the Company notwithstanding that such
individuals or any of them shall have ceased to hold such offices prior to the
delivery of such Warrant or did not hold such offices on the date of this
Agreement.
1
<PAGE> 3
Warrants shall be dated as of the date of execution thereof by the Company
either upon initial issuance or upon division, exchange, substitution or
transfer.
The demand registration rights as set forth in Section 13 hereof may be
exercised during a four year period commencing one year from the effective date
of the offering of Debentures and the piggyback registration rights as set forth
in Section 13 hereof will expire seven years from the effective date of the
offering of Debentures.
2. REGISTRATION. The Warrants shall be numbered and shall be registered on
the books of the Company (the "Warrant Register") as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register (the "Holder") as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such facts that
its participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of _______________ in such denominations as ______________
may request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
at the option of the holder thereof for another certificate or certificates of
different denominations entitling the Holder thereof to purchase upon surrender
to the Company or its duly authorized agent a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle such Holder
to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate or certificates to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates, as the case may be,
as so requested. Any Warrant issued upon exchange, transfer or partial exercise
of the Warrants shall be the valid obligation of the Company, evidencing the
same generic rights and entitled to the same generic benefits under this
Agreement as the Warrants surrendered for such exchange, transfer or exercise.
2
<PAGE> 4
4. RESTRICTIONS ON TRANSFER. From the date hereof until April 22, 1993 (the
"Restricted Period"), the Warrants and the Warrant Shares may not be sold,
transferred, assigned or hypothecated except to _____________ or to individuals
who are bona fide officers or partners of ______________ or by operation of law.
The Warrants shall be transferable only on the Warrant Register upon delivery to
the Company of the Warrant Certificate or certificates duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In all cases
of transfer by an attorney, the original power of attorney, duly approved, or an
official copy thereof, duly certified, shall be deposited with the Company. In
case of transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. Notwithstanding the
foregoing and whether or not during the Restricted Period, the Company shall
have no obligation to cause Warrants to be transferred on its books to any
person, unless the Holder of such Warrants shall furnish to the Company evidence
of compliance with the Securities Act of 1933, as amended (the "Act"), in
accordance with the provisions of Section 11 of this Agreement.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Holder thereof to purchase one share of
Common Stock subject to adjustment in accordance with Section 9 hereof at
any time from 9:00 A.M., Los Angeles time, on November 1, 1993 until 5:00
P.M., Los Angeles time, on April 22, 1997 (the "Expiration Date") at a
purchase price of $10.297 per share (which such price shall not be less
than 125% of the Common Stock Price defined below subject to adjustment in
accordance with Section 9 hereof (the Warrant Price")). The Common Stock
Price is the lower of (i) the average closing price of the Company's Common
Stock, as reported by the American Stock Exchange, for the 30 business days
prior to the business day immediately preceding the Debenture offering
termination date; or (ii) the average closing price of the Company's Common
Stock, as reported by the American Stock Exchange, for the five business
days prior to the business day immediately preceding such date.
(b) The Warrant Price and the number of shares issuable upon exercise of
Warrants are subject to adjustment upon the occurrence of certain events,
pursuant to the provisions of Section 9 of this Agreement. Subject to the
provisions of
3
<PAGE> 5
this Agreement, each Holder shall have the right, which may be exercised as
expressed in such Warrants, to purchase from the Company (and the Company
shall issue and sell to such Holder) the number of fully paid and
nonassessable shares of Common Stock specified in such Warrants, upon
surrender to the Company, or its duly authorized agent, of such Warrants,
with the purchase form on the reverse thereof duly filled in and signed,
and upon payment to the Company of the Warrant Price, as adjusted in
accordance with the provisions of Section 9 of this Agreement, for the
number of shares in respect of which such Warrants are then exercised.
Payment of such Warrant Price may be made only in cash, by certified or
official bank check.
Upon such surrender of Warrants, and payment of the Warrant Price as aforesaid,
the Company shall issue and cause to be delivered with all reasonable dispatch
to or upon the written order of the Holder and (subject to receipt of evidence
of compliance with the Act in accordance with the provisions of Section 11 of
this Agreement) in such name or names as the Holder may designate, a certificate
or certificates for the number of full shares of Common Stock so purchased upon
the exercise of such Warrants, together with cash, as provided in Section 10 of
this Agreement, in respect of any fraction of a share of such stock otherwise
issuable upon such surrender. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares as of the date of the
surrender of such Warrants and payment of the Warrant price as aforesaid;
PROVIDED, HOWEVER, that if, at the time of surrender of the Warrant and payment
of such Warrant Price, the transfer books for the Common Stock or other class of
stock purchasable upon the exercise of the Warrants shall be closed, the
certificates for the shares in respect of which the warrants are then exercised
shall be issuable as of the date on which such books shall next be opened
whether before, on or after the Expiration Date and until such date the Company
shall be under no duty to deliver any certificate for such shares; PROVIDED,
FURTHER, however, that the transfer books shall not be closed at any one time
for a period longer than five days unless otherwise required by law. The rights
of purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that any Warrant is exercised in respect of less than all of the shares
purchasable on such exercise at any time prior to the Expiration Date, a new
certificate evidencing the remaining Warrant or Warrants will be issued.
4
<PAGE> 6
5.1. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that if
any shares of Common Stock required to be reserved for purposes of exercise or
conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange, before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case may be, PROVIDED, HOWEVER, that in no event
shall such shares of Common Stock be issued, and the Company is hereby
authorized to suspend the exercise of all Warrants, for the period during which
such registration, approval or listing is required but not in effect.
6. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes, if
any, attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants and any securities issued pursuant to Section 9 hereof; 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 issue or delivery of
any Warrants or certificates for Warrant Shares and any securities issued
pursuant to Section 9 hereof in a name other than that of the Holder of such
Warrants.
7. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and in substitution for the Warrant lost,
stolen or destroyed, a new Warrant of like tenor and representing an equivalent
right or interest; but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and indemnity or
bond, if requested, also reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF WARRANTS.
There have been reserved out of the authorized and unissued shares of Common
Stock, a number of shares sufficient to provide for the exercise of the rights
of purchase represented by the Warrants, and the transfer agent for the Common
Stock ("Transfer Agent") and every subsequent transfer agent for any
5
<PAGE> 7
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply the Transfer Agent and any such subsequent transfer agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be issuable as provided in Section
10 of this Agreement. The Company will furnish to the Transfer Agent and any
such subsequent transfer agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section 9.3
hereof. All Warrants surrendered in the exercise of the rights thereby evidenced
shall be cancelled, and such cancelled Warrants shall constitute sufficient
evidence of the number of shares of stock which have been issued upon the
exercise of such Warrants (subject to adjustment as herein provided). No shares
of stock shall be subject to reservation in respect of the Warrants subsequent
to the Expiration Date except to the extent necessary to comply with the terms
of this Agreement.
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as hereafter defined.
9.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable upon
the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) issue
by reclassification of its shares of Common Stock other securities of the
Company (including any such reclassification in connection with a
consolidation or merger in which the Company is the surviving corporation),
the number of Warrant Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the Holder of each
Warrant shall be entitled to receive the kind and number of
6
<PAGE> 8
Warrant Shares or other securities of the Company which he would have owned
or have been entitled to receive after the happening of any of the events
described above, had such Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto regardless
of whether the Warrants are exercisable at the time of the happening of
such event or at the time of any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(b) In case the Company shall issue rights, options or warrants to all
holders of its outstanding Common Stock, without any charge to such
holders, entitling them (for a period expiring within 60 days after the
record date mentioned below) to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date mentioned
below than the then current market price per share of Common Stock (as
determined in accordance with paragraph (e) below), the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon exercise of each Warrant by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of
additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total
number of shares of common stock so offered would purchase at the current
market price per share of Common Stock at such record date. Such adjustment
shall be made whenever such rights, options or warrants are issued, and
shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute to all holders of its shares of
Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph (a) above
or in the paragraph immediately following this paragraph) or rights,
options or warrants, or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock (excluding
those referred to in paragraph (b) above), then in each case the number of
Warrant Shares
7
<PAGE> 9
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined in accordance with paragraph (e) below) on the
date of such distribution, and of which the denominator shall be the then
current market price per share of Common Stock, less the then fair value
(as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive) of the portion of the assets or
evidences of indebtedness so distributed or of such subscription rights,
options or warrants, or of such convertible or exchangeable securities
applicable to one share of Common Stock. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution.
In the event of distribution by the Company to all holders of its shares
of Common Stock of stock of a subsidiary or securities convertible into or
exercisable for such stock, then in lieu of an adjustment in the number of
Warrant Shares purchasable upon the exercise of each Warrant, the Holder of
each Warrant, upon the exercise thereof at any time after such
distribution, shall be entitled to receive from the Company, such
subsidiary or both, as the Company shall determine, the stock or other
securities to which such Holder would have been entitled if such Holder had
exercised such Warrant immediately prior thereto regardless of whether the
Warrants are exercisable at such time, all subject to further adjustment as
provided in this subsection 9.1; PROVIDED, HOWEVER, that no adjustment in
respect of dividends or interest on such stock or other securities shall be
made during the term of a Warrant or upon the exercise of a Warrant.
(d) In case the Company shall sell and issue shares of Common Stock
(other than pursuant to rights, options, warrants, or convertible
securities initially issued before the date of this Agreement) or rights,
options, warrants or convertible securities containing the right to
subscribe for or purchase shares of Common Stock (excluding shares, rights,
options, warrants or convertible securities issued in any of the
transactions described in paragraphs (a), (b) or (c) above) at a price per
share of Common Stock (determined, in the case of such rights, options,
warrants or convertible securities, by dividing (w) the total of the amount
received or receivable by the Company (determined as provided below) in
consideration of the sale and issuance of such rights,
8
<PAGE> 10
options, warrants or convertible securities, by (x) the total number of
shares of Common Stock covered by such rights, options, warrants or
convertible securities) lower than the then current market price per share
of Common Stock (as determined in accordance with paragraph (e) below) in
effect immediately prior to such sale and issuance, then the number of
Warrant shares thereafter purchasable upon the exercise of the Warrants
shall be determined by multiplying the number of Warrant shares theretofore
purchasable upon exercise by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding on the date of issuance of
such shares, rights, options, warrants or convertible securities plus the
number of shares of Common Stock sold or subject to issuance pursuant to
such rights, options, warrants or convertible securities, and of which the
denominator shall be the number of shares of Common Stock outstanding on
the date of issuance of such shares, rights, options, warrants or
convertible securities plus the number of shares of Common Stock which the
aggregate consideration received or receivable (determined as provided
below) for such sale or issuance would purchase at such current market
price per share. Such adjustment shall be made successively whenever such
an issuance is made. For the purposes of such adjustments, the
consideration received or receivable by the Company for rights, options,
warrants or convertible securities shall be deemed to be the consideration
received by the Company for such right, options, warrants or convertible
securities, plus the consideration or premiums stated in such rights,
options, warrants or convertible securities to be paid for the shares of
Common Stock covered thereby. In case the Company shall sell and issue
shares of Common Stock, or rights, options, warrants or convertible
securities containing the right to subscribe for or purchase shares of
Common Stock, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the "price
per share of Common stock" and the "consideration received or receivable by
the Company" for purposes of the first sentence of this paragraph (d), the
Board of Directors shall determine, in its discretion the fair value of
said property, and such determination, if made in good faith, shall be
binding upon all Holders.
(e) For the purpose of any computation under paragraphs (b), (c) and (d)
of this Section, the current market price per share of Common Stock at any
date shall be the average of the daily closing prices of the Company's
Common Stock, as reported by the American Stock Exchange, for 30
consecutive trading days commencing 45 trading days before the date of such
computation. The closing price for each day shall be the
9
<PAGE> 11
last such reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the closing bid and asked
prices regular way for such day, in each case on the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if not listed or admitted to trading, the average
of the closing bid and asked prices of the Common Stock in the
over-the-counter market as reported by NASDAQ or any comparable system. In
the absence of one or more such quotations, the Board of Directors of the
Company shall determine the current market price, in good faith, on the
basis of such quotations as it considers appropriate. Notwithstanding the
foregoing, for the purpose of any calculation under paragraph (d) above (A)
with respect to any issuance of options under the Company's employee
compensation stock option plans as in effect or as adopted by the Board of
Directors of the Company on the date hereof, the term "current market
price" in such instances shall mean the fair market price on the date of
the issuance of any such option determined in accordance with the Company's
employee compensation stock option plans as in effect or as adopted by the
Board of Directors of the Company on the date hereof; and (B) with respect
to any issuances of Common Stock (or rights, options, warrants or
convertible securities containing the right to subscribe for or purchase
shares of Common Stock) in connection with bona fide corporate transactions
(other than issuances in such transactions for cash or similar
consideration), the term "fair market price" shall mean the fair market
price per share as determined in arm's length negotiations by the Company
and such other parties (other than affiliates or subsidiaries of the
Company) to such transactions as reflected in the definitive documentation
with respect thereto, unless such determination is not reasonably related
to the closing market price on the date of such determination.
(f) In any case in which this Section 9.1 shall require that any
adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the occurrence of the event the issuing to the Holder
of any Warrant exercised after that record date the shares of Common Stock
and other securities of the Company, if any, issuable upon the exercise of
any Warrant over and above the shares of Common Stock and other securities
of the Company, if any, issuable upon the exercise of any Warrant prior to
such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to the
holder a due bill or other appropriate instrument evidencing the holder's
right to receive such additional
10
<PAGE> 12
shares or securities upon the occurrence of the event requiring such
adjustment.
(g) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Warrant Shares
purchasable upon the exercise of each Warrant; PROVIDED, HOWEVER, that any
adjustments which by reason of this paragraph (g) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-thousandth of
a share.
(h) Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant is adjusted, as herein provided, the Warrant Price payable
upon the exercise of each Warrant shall be adjusted by multiplying such
Warrant Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of Warrant Shares purchasable upon the
exercise of such Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of Warrant Shares purchasable
immediately thereafter.
(i) No adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant need be made under paragraphs (b), (c) and (d) if
the Company issues or distributes to each Holder of Warrants the rights,
options, warrants, or convertible or exchangeable securities, or evidences
of indebtedness or assets referred to in those paragraphs which each Holder
of Warrants would have been entitled to receive had the Warrants been
exercised prior to the happening of such event or the record date with
respect thereto regardless of whether the Warrants are exercisable at the
time of the happening of such event or at the time of any record date with
respect thereto. No adjustment need be made for a change in the par value
of the Warrant Shares.
(j) For the purpose of this Section 9.1, the term "shares of Common
Stock" shall mean (i) the class of stock designated as the Common Stock of
the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to paragraph (a) above, the Holders
shall become entitled to purchase any securities of the Company other than
shares of Common Stock, thereafter the number of such other
11
<PAGE> 13
securities so purchasable upon exercise of each Warrant and the Warrant
Price of such securities shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in paragraphs (a)
through (i), inclusive, above, and the provisions of Section 5 and Sections
9.2 through 9.5, inclusive, with respect to the Warrant Shares, shall apply
on like terms to any such other securities.
(k) Upon the expiration of any rights, options, warrants or conversion
or exchange privileges, if any thereof shall not have been exercised, the
Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as the case may
be) as if (A) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange rights and (B) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the issuance,
sale or grant of all such rights, options, warrants or conversion or
exchange rights whether or not exercised; PROVIDED, FURTHER, that no such
readjustment shall have the effect of increasing the Warrant Price or
decreasing the number of Warrant Shares by an amount in excess of the
amount of the adjustment initially made with respect to the issuance, sale
or grant of such rights, options, warrants or conversion or exchange
rights.
9.2. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount determined appropriate by the Board of Directors of
the Company.
9.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and
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<PAGE> 14
the Warrant Price of such Warrant Shares after such adjustment and setting forth
a brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such certificate, absent manifest
error, shall be conclusive evidence of the correctness of such adjustment.
9.4. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
9.5. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, transfer or
lease had such Warrant been exercised immediately prior to such action
regardless of whether the Warrants are exercisable at the time of such action;
PROVIDED, HOWEVER, that no adjustment in respect of dividends, interest or other
income on or from such shares or other securities and property shall be made
during the term of a Warrant or upon the exercise of a Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The provisions of
this Section 9.5 shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
9.6. STATEMENT ON WARRANTS. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at
13
<PAGE> 15
the same time by the same Holder, the number of full Warrant Shares which shall
be issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share would, except for the provisions
of this Section 10 be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to the closing
price for one share of the Common Stock, as determined in accordance with
paragraph (e) of Subsection 9.1, on the trading day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction.
11. REGISTRATION UNDER THE SECURITIES ACT OF 1933. ________________
represents and warrants to the Company that _________________ will not dispose
of any such Warrants or Warrant Shares except pursuant to (i) an effective
registration statement, or (ii) an applicable exemption from registration under
the Securities Act of 1933 (the "Act"). In connection with any sale by
___________________pursuant to clause (ii) of the preceding sentence,
_________________ shall furnish to the Company an opinion of counsel reasonably
satisfactory to the Company to the effect that such exemption from registration
is available in connection with such sale.
12. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend by which each Holder shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE
AND THE SHARES OF COMMON STOCK OR OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT, OR (ii) AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933. ANY SALE PURSUANT TO CLAUSE (ii) OF
THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH EXEMPTION FROM
REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE."
The Warrant Shares or other securities issued upon exercise of the
Warrants shall, unless issued pursuant to an effective registration statement,
be subject to a stop-transfer order and the certificate or certificates
evidencing any such Warrant Shares or
14
<PAGE> 16
securities shall bear the following legend by which the Holder thereof shall be
bound:
"THE SHARES OR OTHER SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT,
OR (ii) AN APPLICABLE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933. ANY SALE PURSUANT
TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE
ACCOMPANIED BY AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE
IN CONNECTION WITH SUCH SALE."
13. Registration Rights.
-------------------
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and agrees with
___________ and any subsequent Holders of the Warrants and/or Warrant Shares
that within thirty (30) days after receipt of a written request from Holders of
twenty-five percent in interest of the Warrants and/or Warrant Shares issued
under the Warrant Agreement dated May 15, 1992 that they desire and intend to
transfer all or a portion of such securities (and any securities received by the
Holders of the Warrants pursuant to Section 9 hereof) under such circumstances
that a public offering within the meaning of Act would be involved, the Company
shall file a registration statement (and use its best efforts to cause such
registration statement to become effective under the Act) with respect to the
offering and sale or other disposition of such securities (including any
securities received by the Holders of the Warrants pursuant to Section 9 hereof)
(all such securities, the "Offered Securities"). The Company shall continuously
maintain the effectiveness of such registration statement for the lesser of (i)
180 days after the effective date of the registration statement or (ii) the
consummation of the distribution by the Holders of the Offered Securities
covered by such registration statement (the "Termination Date"); provided,
however, that if at the Termination Date the Offered Securities are covered by a
registration statement which also covers other securities and which is required
to remain in effect beyond the Termination Date, the Company shall maintain in
effect such registration statement as it relates to the Offered Securities for
so long as such registration statement (or any subsequent registration
statement) remains or is required to remain in effect for any of such other
securities. The Company shall not include any securities other than the Offered
Securities in any such registration statement pursuant
15
<PAGE> 17
to any "piggyback" or similar registration rights granted by the Company after
the date hereof without the consent of a majority in interest of the Holders of
the Offered Securities. The Company shall not be required to comply with more
than one request for registration pursuant to this Section 13(a) or to cause any
such registration statement to become effective prior to November 1, 1993 or to
comply with a request for registration pursuant to this Section 13(a) made after
April 22, 1997, PROVIDED, HOWEVER, that if a request is properly and timely made
on or prior to April 22, 1997 pursuant to this Section 13(a), the Company shall
be required to comply with such request even though the registration statement
does not or cannot become effective until after April 22, 1997 or the
effectiveness of such registration statement is otherwise required under this
Section 13(a) to be maintained beyond April 22, 1997. All expenses of such
registration shall be borne by the Company, except that underwriting commissions
and expenses attributable to the Warrants and/or Warrant Shares will be borne by
such Holders requesting that such securities be offered.
(b) PIGGYBACK REGISTRATION RIGHTS. The Company covenants and agrees
with _________________ and any subsequent holders of the Warrants and/or Warrant
Shares that, in the event the Company proposes to file a registration statement
under the Act prior to April 22, 1999 with respect to the firm commitment
offering of Common Stock (other than in connection with an exchange offer or a
registration statement on Form S-4 or S-8 or other similar registration
statements not available to register securities so requested to be included)
which the Company believes will be or become effective at any time on or after
November 1, 1993, the Company shall in each case give written notice of such
proposed filing to (i) the holders of the Warrant Shares and (ii) if on or
before the Expiration Date, the holders of the Warrants, in each case at least
30 days before the earlier of the anticipated or the actual effective date of
the registration statement and at least ten days before the initial filing of
such registration statement and such notice shall offer to such Holders the
opportunity to include in such registration statement such number of Warrant
Shares and/or Warrants (and any securities received by the Holders of the
Warrants pursuant to Section 9 hereof) (all such securities, the "Piggyback
Securities", and together with the Offered Securities, the "Registrable
Securities") as they may request. Holders desiring inclusion of Piggyback
Securities in such registration statement shall so inform the Company by written
notice, given within 10 days of the giving of such notice by the Company in
accordance with the provisions of Section 15 hereof. The Company shall permit,
or
16
<PAGE> 18
shall cause the managing underwriter of a proposed offering to permit, the
Holders of Piggy-back Securities requested to be included in the registration to
include such securities in the proposed offering on the same terms and
conditions as applicable to securities of the Company, if any, included therein
for the account of any person other than the Company and the Holders of Warrants
and/or Warrant Shares. Notwithstanding the foregoing, if any such managing
underwriter shall advise the Company in writing that, in its opinion, the
distribution of securities by holders thereof, including all or a portion of the
Piggy-back Securities, requested to be included in the registration concurrently
with the securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company for its own account,
then the Holders of such Warrants and/or Warrant Shares shall delay their
offering and sale of Piggy-back Securities (or the portions thereof so
designated by such managing underwriter) for such period, not to exceed 120
days, as the managing underwriter shall request, provided that if any other
securities are included in such registration statement for the account of any
person other than the Company and the Holders of Warrants and/or Warrant Shares,
then such securities, including the Warrants and/or Warrant Shares, so included
shall be apportioned among holders who wish to be included therein pro rata
according to amounts so requested to be included by each such person provided,
further, that if the holder of the Company's securities that have been granted
registration rights by the Company pursuant to a Registration Rights Agreement
dated as of May 31, 1991 (the "Partners Agreement") among the Company, Shallow
Waters Limited Partnership, West Cote Partners Limited Partnership, Palace
Exploration Company and Pelham, Inc. (together, the "Partners") enforce, in the
circumstances described in Section 2(b) thereof, the right granted thereunder in
Section 2(b) thereof to cause all securities of the Company owned by other
persons to be reduced before securities of the Partners are reduced, then the
Company shall (unless objected to by the Partners and prohibited by the Partners
Agreement) reduce the number of securities it is seeking registration of in such
amount equal to the number the Holders of the Piggy-back Securities would have
been required to reduce but for the provisions of this proviso and register such
amount of Piggy-back Securities. No such delay shall in any event impair any
right granted hereunder to make subsequent requests for inclusion pursuant to
the terms of this Section 13(b). The Company shall continuously maintain in
effect any registration statement on Form S3 with respect to which the
Piggy-back Securities have been requested to be included (and so
17
<PAGE> 19
included) for a period of not less than (i) 180 days after the effectiveness of
such registration statement or (ii) the consummation of the distribution by the
Holders of the Piggy-back Securities ("Piggy-back Termination Date"); PROVIDED,
HOWEVER, that if at the Piggy-back Termination Date the Piggy-back Securities
are covered by a registration statement which is, or is required to remain, in
effect beyond the Piggy-back Termination Date, the Company shall maintain in
effect the registration statement as it relates to the Piggy-back Securities for
so long as such registration statement remains or is required to remain in
effect for any of such other securities. All expenses of such registration shall
be borne by the Company, except that underwriting commissions and expenses
attributable to the Warrants and/or Warrant Shares and fees and disbursements of
counsel (if any) to the Holders requesting that such Warrants and/or Warrant
Shares be offered will be borne by such Holders.
(c) OTHER MATTERS. In connection with the registration of Registerable
Securities in accordance with Paragraph (a) or (b) above, the Company agrees to:
i) Use its best efforts to register or qualify the Registrable
Securities for offer or sale under state securities or Blue Sky laws of
such jurisdictions in which the Holders of such Warrants and/or Warrant
Shares shall designate; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so
subject, and use its best efforts to do any and all other acts and
things which may be necessary or advisable to enable the holders to
consummate the sale, transfer or other disposition of such securities
in any jurisdiction;
ii) Enter into indemnity and contribution agreements, each in
customary form, with each underwriter, if any, and each Holder of
Registrable Securities included in such registration statement; and, if
requested, enter into an underwriting agreement containing customary
representations, warranties, covenants, allocation of expenses, and
customary closing conditions including, but not limited to, opinions of
counsel and accountants cold comfort letters, with any underwriter who
participates in the offering of Registrable Securities;
18
<PAGE> 20
iii) Pay all expenses in connection with the registration of the
Warrants and/or Warrant Shares under the Act and compliance with the
provisions of clause (i) above, except to the extent otherwise provided
in Sections 13(a) and 13(b); and
iv) List the Warrant Shares on each securities exchange in which
the Common Stock is listed.
In connection with the registration of Registrable Securities in
accordance with Paragraph (b) above, the Holders agree to enter into an
underwriting agreement containing customary representations, warranties,
covenants, allocation of expenses (not otherwise inconsistent with this
Agreement), and customary closing conditions, with any underwriter who
participates in the offering of Registrable Securities.
(d) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY AND HOLDERS. The Company
agrees (i) not to effect any public sale or distribution of any securities
similar to the Registrable Securities or any securities convertible into or
exchangeable or exercisable for such securities (or any option or other right
for such securities), except for any securities that may be issued to the
Holders of the Warrants pursuant to Section 9 hereof, during the 15-day period
prior to, and during the 60-day period beginning on the effective date of any
registration statement under which the Registrable Securities are registered in
accordance with Section 13(a) (other than as part of such registration). As
required under Warrant Agreements dated January 23, 1992 ("Agreement") the
Holders agree not to effect any public sale or distribution of any securities
similar to the Registrable Securities as defined under the Agreement (or any
securities convertible into or exchangeable or exercisable for any such similar
securities) during the periods described in clause (i) of Section 13(d) of the
Agreement, in each case including a sale pursuant to Rule 144 under the Act (or
any similar provision then in effect). Upon notice given pursuant to Section
13(a) of the Agreement, any demand registration rights hereunder with respect to
any securities of the Company lapse until the expiration of 180 days after the
date of completion of any distribution contemplated by Section 13(a) thereof.
The Holders of Warrants and Warrant Shares have no "piggy-back" registration
rights with respect to any registration effected pursuant to Section 13(a) of
the Agreement.
(e) RULE 144. With a view to making available to Holders the benefits
of certain rules of the Securities and Exchange Commission (the "Commission")
that may permit the
19
<PAGE> 21
sale of Registrable Securities to the public without registration, the
Company hereby covenants and agrees to use its best efforts to file in
a timely manner all reports and other documents required to be filed by
it under the Act and the Securities Exchange Act of 1934 and the rules
and regulations adopted by the Commission thereunder necessary to
permit sales under Rule 144 under the Act, and the Company will take
such further action to the extent required from time to time to enable
Holders to sell Registrable Securities (whether or not any such
securities have been the subject of a demand or piggy-back request
under Section 13 hereof) without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144 under the Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of a
Holder, the Company will deliver to such Holder a written statement as
to whether it has complied with such requirements.
14. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as stockholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any of
the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Common
Stock; or
(b) the Company shall offer to the holders of its shares of Common
Stock any additional shares of Common Stock or securities convertible
into or exchangeable for shares of Common Stock or any right to
subscribe to or purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, sale, transfer or
lease or all or substantially all of its property, assets, and business
as an entirety) shall be proposed,
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Holders as provided in
20
<PAGE> 22
Section 15 hereof and (b) if there are more than 100 Holders, cause notice of
such event to be published once in The Wall Street Journal (national edition),
such giving of notice and publication to be completed at least 15 days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
or subscription rights, or for the determination of stockholders entitled to
vote on such proposed dissolution, liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. Failure to publish, mail or receive such notice or any defect therein or
in the publication or mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or subscription
rights, or such proposed dissolution, liquidation or winding up.
15. NOTICES. Any notice pursuant to this Agreement to be given or made
by the Holder of any Warrant or Warrant Shares to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Benton Oil and Gas Company
300 Esplanade Drive
Suite 2000
Oxnard, California 93030
Attention: David H. Pratt
Notices or demands authorized by this Agreement to be given or made to or on the
Holder of any Warrant or Warrant Shares shall be sufficiently given or made
(except as otherwise provided in this Agreement) if sent by registered mail,
return receipt requested, postage prepaid, addressed to such Holder at the
address of such Holder as shown on the Warrant Register or the Common Stock
Register, as the case may be.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
17. SUPPLEMENTS AND AMENDMENTS. The Company and the Holders may from
time to time supplement or amend this Agreement in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Holder may deem necessary or desirable and which shall not
21
<PAGE> 23
be inconsistent with the provisions of the Warrants and which shall not
adversely affect the interests of the Holders. Any amendment to this Agreement
may be effected with the consent of Holders of at least 66 2/3% of the Warrants
(for this purpose Warrant Shares shall be deemed to be Warrants in the
proportion that Warrant Shares are then issuable upon the exercise of Warrants);
provided that, any amendment which shall have the effect of materially adversely
affecting the interests of any Holder shall not be effective with respect to
such Holder if such Holder shall not have consented thereto.
18. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
19. MERGER OR CONSOLIDATION OF THE COMPANY. So long as this Agreement
remains in effect, the Company will not merge or consolidate with or into, or
sell, transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing corporation, as the case may be
(if not the Company), shall expressly assume, by supplemental agreement executed
and delivered to the Holders, the due and punctual performance and observance of
each and every covenant and condition of this Agreement to be performed and
observed by the Company.
20. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders of the Warrants and Warrant Shares.
21. CAPTIONS. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
22
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
BENTON OIL AND GAS COMPANY
By:
---------------------------------
David H. Pratt,
Vice President - Finance
(CORPORATE SEAL)
Attest:
- -----------------------------
Toni L. Jackson
23
<PAGE> 25
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933. ANY
SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS AND COMMON STOCK UNDERLYING SUCH
WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
No. UD-1 Warrants
VOID AFTER 5:00 P.M. LOS ANGELES
TIME ON APRIL 22, 1997
BENTON OIL AND GAS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received ______________, the registered
holder hereof or registered assigns (the "Holder"), is the owner of the number
of Warrants set forth above, each of which entitles the owner thereof to
purchase at any time from 9:00 A.M., Los Angeles time, on November 1, 1993,
until 5:00 P.M., Los Angeles time, on April 22, 1997, one fully paid and
nonassessable share of the Common Stock (subject to adjustment), par value $0.01
per share (the "Common Stock"), of Benton Oil and Gas Company, a Delaware
corporation (the "Company"), at the purchase price of $10.297 per share, subject
to adjustment (the "Warrant Price"). Payment of the Warrant Price may be made in
cash, by certified or official bank check.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated May 15,
1992 (the "Warrant Agreement") between the Company and
___________________________ which Warrant Agreement is hereby incorporated
herein by reference and made a part hereof and to which Warrant Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations,
A-1
<PAGE> 26
duties and immunities hereunder of the Company and the holders of the Warrant
Certificates. The Warrants shall not be sold, transferred, assigned,
hypothecated or otherwise disposed of prior to the close of business on April
22, 1993 except to the extent set forth in the Warrant Agreement. Copies of the
Warrant Agreement are on file at the principal office of the Company.
The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the company may treat
the Holder hereof as the owner for all purposes.
The Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Warrants evidenced by the Warrant Certificate or
Warrant Certificates surrendered entitled such holder to purchase. If this
Warrant Certificate shall be exercised in part, the Holder shall be entitled to
receive upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
Neither the Warrants nor the Warrant Certificate entitles any Holder
hereof to any of the rights of a stockholder of the Company.
A-2
<PAGE> 27
IN WITNESS WHEREOF, Benton Oil and Gas Company has caused the signature
(or facsimile signature) of its Vice President and Secretary to be printed
hereon and its corporate seal (or facsimile) to be printed hereon.
BENTON OIL AND GAS COMPANY
By:
-----------------------------------
David H. Pratt, Vice
President-Finance
Attest:
- ----------------------------------
Toni L. Jackson, Secretary
A-3
<PAGE> 28
PURCHASE FORM
(To be executed upon exercise of Warrant). To Benton Oil and Gas
Company.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $___________.
Please issue a certificate or certificates for such shares of Common
Stock in the name of, and pay any cash for any fractional share to:
Name
------------------------------
(Please Print Name, Address
and Social Security No.)
Signature
-------------------------
NOTE: The above signature should
correspond exactly with the name on
the face of this Warrant
Certificate or with the name of
assignee appearing in the
assignment form below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
Dated: , 19 Signature
---------------- --- ---------------------------
-------------------------------------
Please Print Name
A-4
<PAGE> 29
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate.)
For value received, ___________________________ hereby sells, assigns
and transfers unto _________________________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ________________, attorney, to
transfer said Warrant Certificate on the books of the withinnamed Company, with
full power of substitution in the premises.
Dated: , 19
--------------- ---
--------------------------------
NOTE: The above signature should
correspond exactly with the name on
the face of this Warrant
Certificate.
A-5
<PAGE> 1
Exhibit 4.9
BENTON OIL AND GAS COMPANY
STOCK OPTION AGREEMENT
AMENDED ___________________
This Amended Stock Option Agreement amended as of _________________ by
and between BENTON OIL AND GAS COMPANY (the "Company") and __________________
(the "Optionee").
It is hereby agreed as follows:
1. GRANT OF OPTION; CONSIDERATION. The Company hereby confirms
the grant to the Optionee on __________________ of a stock option to purchase up
to ___________ shares of the Company's Common Stock, par value $0.01 per share
(the "Shares"), at an exercise price of $7.75 per share (the "Option"). The
Option granted hereunder is not intended to constitute an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. The terms of the Option are subject to adjustment in certain
circumstances, as herein.
The Optionee shall be required to pay no consideration for
the grant of the option.
2. OPTION TERMS. Subject to all of the terms and conditions of
this Agreement, including acceleration of exercisability in the event of a
Change of Control (as provided under Section 3), the Optionee may purchase up to
________ Shares upon exercise of this Option on or after August 10, 1993, an
additional ________ Shares upon exercise of this Option on or after August 10,
1994, an additional ________ Shares upon exercise of this Option on or after
August 10, 1995. This Option, to the extent it has not been previously
exercised, shall expire at 5:00 p.m. (Pacific Time) on August 10, 2003.
The Option may be exercised in whole or in part (to the
extent then exercisable) by delivery to and receipt by the Secretary of the
Company at 1145 Eugenia Place, Suite 200, Carpinteria, California 93013, of a
written notice, signed by the Optionee, specifying that this Option is being
exercised for the number of Shares which the Optionee wishes to purchase,
accompanied by payment in full of the exercise price in cash (including by
check) or in such manner as may then be permitted under Rules and Regulations
adopted by the Board. As soon as practicable after the valid exercise of the
Option, the Company shall deliver to the Optionee one or more stock certificates
representing the Shares so purchased, with any requisite legend affixed.
3. OPTION VESTING UPON CHANGE OF CONTROL OF THE COMPANY. In the
event of a Change of Control of the Company, the vesting of Optionee's Options
shall be automatically accelerated, so that all Options outstanding at the time
of such Change of Control will be exercisable immediately.
"Change of Control" shall mean any of the following events:
<PAGE> 2
(A) any "Person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than Company, any trustee or
other fiduciary holding securities under an employee benefit plan
of Company, or any company owned, directly or indirectly, by the
stockholders of Company in substantially the same proportions as
their ownership of stock of Company) is or becomes the "Beneficial
Owner" as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of 25% or more of the combined voting power of
Company's outstanding securities;
(B) individuals who constitute the Board on the effective date of
the Plan (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to such effective date whose
election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the
directors comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of Company in which
such person is named as a nominee for director, without objection
to such nomination) shall be, for purposes of this clause (B),
considered as though such person were a member of the Incumbent
Board;
(C) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company,
a reverse stock split of outstanding voting securities, or
consummation of any such transaction if stockholder approval is
not obtained, other than (1) any such transaction which would
result in at least 50% of the total voting power represented by
the voting securities of the surviving entity outstanding
immediately after such transaction being "Beneficially Owned" (as
defined above) by 75% or more of the holders of outstanding voting
securities of the Company immediately prior to the transaction,
with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the
transaction, or (2) a merger or consolidation effected to
implement a recapitalization of Company (or similar transaction)
in which no "Person" (as defined above) acquires more than 25% of
the combined voting power of the Company's then outstanding
securities; or
(D) the stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition
by Company of all or substantially all of Company's assets.
Notwithstanding anything in the foregoing to the contrary, no Change of
Control shall be deemed to have occurred with respect to any particular Optionee
by virtue of any transaction which results in such Optionee, or a group of
Persons which includes such Optionee, acquiring, directly or indirectly, 25% or
more of the combined voting power of the Company's outstanding securities.
4. CAPITAL CHANGES. In the event any changes are made to the shares
of Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of one percent (1%) at any single
time, stock split, combination of shares, exchange of shares, extraordinary cash
dividend, change in corporate structure or otherwise), the Board or
2
<PAGE> 3
Committee shall, in order to prevent dilution or enlargement of Participants'
rights, make appropriate adjustments in: (i) the number and kind of shares of
Common Stock theretofore made subject to Optionee's Options, and/or in the
exercise price of said shares. If any of the foregoing adjustments shall result
in a fractional share, the fraction shall be disregarded, and the Company shall
have no obligation to make any cash or other payment with respect to such a
fractional share.
5. TRANSFERABILITY. All rights or interests of Optionee in the
Option may be pledged, encumbered, or hypothecated to or in favor of any third
party and may be subject to any lien, obligation, or liability of the Optionee
to any third party. The Option or any portion thereof may be transferable to any
third party by the Optionee with the prior consent of the Company.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The obligation of the
Company to deliver Shares upon the exercise of this Option is conditioned upon
compliance by the Optionee and by the Company with all applicable laws and
regulations, including regulations of federal and state agencies.
7. NO RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights
as a stockholder with respect to any shares of Common Stock subject to
Optionee's Option, until such Optionee's Option is exercised. Except as provided
in Section 4, no adjustment shall be made in the number of shares of Common
Stock issued to a Optionee, or in any other rights of the Optionee upon exercise
of an Optionee's Option, by reason of any dividend, distribution, or other right
granted to stockholders for which the record date is prior to the date of
exercise of the Optionee's Option.
8. BINDING EFFECT; INTEGRATION; NO OTHER RIGHTS CREATED. This
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties. This Agreement constitutes the entire agreement
between the parties with respect to the Option, and supersedes any prior
agreements or documents with respect to the Option. No amendment, alteration,
suspension, discontinuation or termination of this Agreement which may impose
any additional obligation upon the Company or impair the rights of the Optionee
with respect to the Option shall be valid unless in each instance such
amendment, alteration, suspension, discontinuation or termination is expressed
in a written instrument duly executed in the name and on behalf of the Company
and by the Optionee. Neither this Agreement nor the grant of the Option shall
constitute an employment agreement.
BENTON OIL AND GAS COMPANY
BY:
-----------------------------------------
TITLE: Chief Executive Officer
OPTIONEE:
-----------------------------------------
3
<PAGE> 1
Exhibit 5.1
EMENS, KEGLER, BROWN, HILL & RITTER
A Legal Professional Association
ATTORNEYS AND COUNSELORS AT LAW
CAPITOL SQUARE TELEPHONE (614) 462-5400
SUITE 1800 FACSIMILE (614) 464-2634
65 EAST STATE STREET
COLUMBUS, OHIO 43215-4294
December 2, 1996
Benton Oil and Gas Company
1145 Eugenia Place
Suite 200
Carpinteria, California 93013
Gentlemen:
We have acted as counsel for Benton Oil and Gas Company (the "Company")
in connection with the registration under the Securities Act of 1933, as
amended, of up to 424,608 shares of common stock, $0.01 par value per share (the
"Shares"), 9,748 of which have been issued and may be sold from time to time by
Selling Stockholders and an aggregate of 414,860 Shares to be issued upon the
exercise of outstanding stock options ("Options") and common stock purchase
warrants ("Warrants"). In this connection, we have examined the Certificate of
Incorporation, the Bylaws and the respective amendments thereto, the directors'
and stockholders' minutes, and the Registration Statement filed with the
Securities and Exchange Commission, and exhibits thereto, and such other
documents that we have deemed necessary to the opinion hereinafter expressed.
We are of the opinion that the outstanding Shares are validly
authorized, legally issued, fully paid, and non-assessable.
We are of the opinion that the Shares issued upon exercise of the
Options and Warrants as contemplated by the Stock Option Agreements and Warrant
Agreements will be validly authorized, legally issued, fully paid, and
non-assessable.
We hereby consent to the reference to Emens, Kegler, Brown, Hill &
Ritter Co., L.P.A. appearing under the heading "Legal Matters" in the
Registration Statement and any amendments thereto and the Prospectus of the
Company relating to the sale of the Shares.
Very truly yours,
EMENS, KEGLER, BROWN, HILL & RITTER CO., L.P.A.
By: /s/ Jack A. Bjerke
--------------------------------------
Jack A. Bjerke, Vice President
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Benton Oil and Gas Company on Form S-3 of our report dated March 20, 1996,
appearing in the Annual Report on Form 10-K of Benton Oil and Gas Company for
the year ended December 31, 1995, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of such Registration Statement.
/S/ Deloitte & Touche LLP
Los Angeles, California
December 2, 1996
<PAGE> 1
Exhibit 23.3
[HUDDLESTON & CO. INC. LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEER
Gentlemen:
Huddleston & Co., Inc., hereby consents to the use of its name, use of its
audit report, and reference to it regarding its audit of the Benton Oil and Gas
Company Reserve Reports, prepared by Benton Oil and Gas Company, dated February
9, 1996, in the Form S-3 Registration Statement of Benton Oil and Gas Company
registering the issuance of shares of its common stock.
HUDDLESTON & CO., INC.
/S/ Peter D. Huddleston
---------------------------
Petter D. Huddleston, P.E.
President
December 3, 1996
