Document:

exv4w2

 

Exhiibt 4.2

THE WARRANT EVIDENCED HEREBY, AND THE SECURITIES ISSUABLE HEREUNDER, HAVE BEEN AND SHALL BE
ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE STATE
SECURITY LAWS. THE WARRANT AND SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND SHALL NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
THE PROPOSED DISPOSITION IS THE SUBJECT OF A CURRENTLY EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND SUCH STATE SECURITIES LAWS IN CONNECTION WITH SUCH
DISPOSITION.

TETON ENERGY CORPORATION

COMMON STOCK PURCHASE WARRANT

Original Issue Date: MAY     , 2007

Void After: 11:59 P.M., MAY     , 2012

This Warrant is Issued to

 

(hereinafter called the “Holder,” which term shall include the Holder’s legal
representatives, heirs, successors and assigns) by Teton Energy Corporation, a Delaware corporation
(hereinafter referred to as the “Company”). This Warrant may be transferred by the Holder
only in accordance with the provisions of Section 12.

     1. Exercise of Warrant. For value received and subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at any time on or
after May      , 2007 and on or prior to May     , 2012 (the “Exercise Date”) (with the
subscription form annexed hereto (the “Subscription Form”) duly executed) at the office of
the Company at 410 17th Street, Suite 1850, Denver, Colorado 80202, or such other office
in the United States of which the Company shall notify the Holder hereof in writing, to purchase
from the Company, at the purchase price hereinafter specified (as adjusted from time to time, the
“Exercise Price”), ___shares (the “Warrant Shares”) (as adjusted
from time to time) of the Common Stock, $0.001 par value per share, of the Company (the “Common
Stock”). The initial Exercise Price shall be $5.00 per share.

     2. Issuance of Stock Certificates. As promptly as practicable after surrender of this
Warrant and receipt of payment of the Exercise Price, the Company shall issue and deliver to the
Holder a certificate or certificates for the shares purchased hereunder, in certificates of such
denominations and in such names as the Holder may specify.

     3. Payment of Exercise Price. Payment of the Exercise Price shall be made by check
made payable to the order of the Company or wire transfer of immediately available funds to a bank
account designated by the Company.

     4. Cashless Exercise. The Holder may notify the Company in a Subscription Form of its
election to utilize cashless exercise, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

 

	 	 	 	 	 
	 

	 	 	 	X = Y [(A-B)/A]
	 
	 	 	 	 
	 

	 	where:	 	 
	 

	 	 	 	X = the number of Warrant Shares to be issued to the Holder.
	 
	 	 	 	 
	 

	 	 	 	Y = the number of Warrant Shares with respect to which this Warrant
is being exercised.
	 
	 	 	 	 
	 

	 	 	 	A = the volume weighted average of the closing prices for the five
trading days immediately prior to (but not including) the Exercise
Date.
	 
	 	 	 	 
	 

	 	 	 	B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.

     5. Limitation on Exercise. Notwithstanding anything to the contrary contained herein,
the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant
(or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following
such exercise (or other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does
not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.

     6. Adjustment for Dividends, Distributions, Subdivisions, Combinations, Mergers,
Consolidations or Sale of Assets.

          6.1 Manner of Adjustment.

                 (a) Stock Dividends, Distributions or Subdivisions. In the event the Company shall
issue shares of Common Stock in a stock dividend, stock distribution or subdivision, the Exercise
Price in effect immediately before such stock dividend, stock distribution or subdivision shall,
concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased and the number of shares of Common Stock purchasable by exercise of this
Warrant shall be proportionately increased.

                 (b) Combinations or Consolidations. In the event the outstanding shares of Common
Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Exercise Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or consolidation, be
proportionately increased and the number of shares of Common Stock purchasable by exercise of this
Warrant shall be proportionately decreased.

                 (c) Adjustment for Reclassification, Exchange or Substitution. In the event that the
class of securities issuable upon the exercise of this Warrant shall be changed into the same or a
different number of shares of any class or classes of stock, whether by capital reorganization,

2

 

reclassification or otherwise (other than any event addressed by Sections 6.1(a), 6.1(b) or
6.1(d)), then and in each such event the Holder shall have the right thereafter to exercise this
Warrant for the kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the number of shares of
the class of securities into which such Warrant might have been exercisable for immediately prior
to such reorganization, reclassification, or change, all subject to further adjustment as provided
herein.

                         (d) Adjustment for Merger, Consolidation or Sale of Assets. In the event that the
Company shall merge or consolidate with or into another entity or sell all or substantially all of
its assets, this Warrant shall thereafter be exercisable for the kind and amount of shares of stock
or other securities or property to which a holder of the number of shares of Common Stock of the
Company deliverable upon exercise of this Warrant would have been entitled upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the
Company’s Board of Directors) shall be made in the application of the provisions set forth in this
Section 6 with respect to the rights and interest thereafter of the Holder of this Warrant, to the
end that the provisions set forth in this Section 6 shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon
the exercise of this Warrant.

          6.2 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 6, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to
the Holder a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based.

          6.3 Closing of Books. The Company shall at no time close its transfer books against
the transfer of any shares of Common Stock issued or issuable upon the exercise of this Warrant in
any manner which interferes with the timely and proper issuance of such shares.

     7. Covenants of the Company. During the period within which the rights represented by
this Warrant may be exercised, the Company shall at all times have authorized and reserved for the
purpose of issue upon exercise of the rights evidenced hereby, a sufficient number of shares of the
class of securities issuable upon exercise of this Warrant to provide for the exercise of such
rights. All securities which may be issued upon the exercise of the rights represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and
free from all taxes, liens and charges with respect to the issue thereof. Upon surrender for
exercise, this Warrant shall be canceled and shall not be reissued; provided,
however, that upon the partial exercise hereof a substitute Warrant of like tenor and date
representing the rights to subscribe for and purchase any such unexercised portion hereof shall be
issued.

     8. No Rights as Shareholder Until Exercise. This Warrant shall not entitle the Holder
to any voting rights or any other rights as a stockholder of the Company but upon presentation of
this Warrant with the Subscription Form duly executed and the tender of payment of the Exercise
Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall
forthwith be deemed a stockholder of the Company in respect of the securities for which the Holder
has so subscribed and paid.

     9. No Change Necessary. The form of this Warrant need not be changed because of any
adjustment in the Exercise Price or in the number of shares issuable upon its exercise. A Warrant
issued after any adjustment or any partial exercise or upon replacement may continue to express the
same Exercise Price and the same number of shares (appropriately reduced in the case of partial
exercise) as are stated on this Warrant as initially issued, and that Exercise Price and that
number of shares shall be considered to have been so changed as of the close of business on the
date of adjustment.

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     10. Addresses for Notices. All notices, requests, consents and other communications
hereunder shall be in writing, either delivered in hand or mailed by registered or certified mail,
return receipt requested, or sent by facsimile, and shall be deemed to have been duly made when
delivered:

                         If to the Holder, to the Holder’s address as shown on the books of the Company; or

                         If to the Company, to the address set forth on the first page of this Warrant.

     11. Substitution. In the case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new Warrant of like tenor and denomination and deliver the
same (a) in exchange and substitution for and upon surrender and cancellation of any mutilated
Warrant, or (b) in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft, or destruction of such Warrant (including, without
limitation, a reasonably detailed affidavit with respect to the circumstances of any loss, theft or
destruction), and of indemnity (or, in the case of the initial Holder or any other institutional
holder, an indemnity agreement) satisfactory to the Company.

     12. Transfer Restrictions. This Warrant shall be freely transferable by the Holder,
and may be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise).

     13. Taxes. The Company makes no representation about tax treatment to the Holder with
respect to receipt or exercise of the Warrant or acquiring, holding or disposing of the Common
Stock, and the Holder represents that the Holder has had the opportunity to discuss such treatment
with the Holder’s tax advisers.

     14. Remedies. Each party stipulates that the remedies at law in the event of any
default or threatened default by the other party in the performance or compliance with any of the
terms of this Warrant are and shall not be adequate, and that such terms may be specifically
enforced by a decree for that specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

     15. Governing Law. This Warrant shall be construed and enforced in accordance with,
and governed by, the laws of the State of New York without regard to its principles of conflicts of
laws.

     16. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the Holder and the Company.

[remainder of page intentionally left blank]

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* * *

     IN WITNESS WHEREOF, the parties have caused this Warrant to be executed this ___day of May,
2007.

	 	 	 	 	 	 	 
	 	 	TETON ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

5exv4w3

 

Exhibit 4.3

TETON ENERGY CORPORATION

COMMON STOCK PURCHASE WARRANT

Original Issue Date: JULY 25, 2007

Void After: 11:59 P.M., JULY 25, 2012

This Warrant is Issued to

 

(hereinafter called the “Holder,” which term shall include the Holder’s legal
representatives, heirs, successors and assigns) by Teton Energy Corporation, a Delaware corporation
(hereinafter referred to as the “Company”). This Warrant may be transferred by the Holder
only in accordance with the provisions of Section 11.

     1. Exercise of Warrant. For value received and subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at any time on or
after July 25, 2007 and on or prior to July 25, 2012 (the “Exercise Date”) (with the
subscription form annexed hereto (the “Subscription Form”) duly executed) at the office of
the Company at 410 17th Street, Suite 1850, Denver, Colorado 80202, or such other office
in the United States of which the Company shall notify the Holder hereof in writing, to purchase
from the Company, at the purchase price hereinafter specified (as adjusted from time to time, the
“Exercise Price”),                     shares (the “Warrant Shares”) (as adjusted from time
to time) of the Common Stock, $0.001 par value per share, of the Company (the “Common
Stock”). The initial Exercise Price shall be $6.06 per share.

     2. Issuance of Stock Certificates. As promptly as practicable after surrender of this
Warrant and receipt of payment of the Exercise Price, the Company shall issue and deliver to the
Holder a certificate or certificates for the shares purchased hereunder, in certificates of such
denominations and in such names as the Holder may specify.

     3. Payment of Exercise Price. Payment of the Exercise Price shall be made by check
made payable to the order of the Company or wire transfer of immediately available funds to a bank
account designated by the Company.

     4. Limitation on Exercise. Notwithstanding anything to the contrary contained herein,
the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant
(or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following
such exercise (or other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does
not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.

     5. Adjustment for Dividends, Distributions, Subdivisions, Combinations, Mergers,
Consolidations or Sale of Assets.

          5.1 Manner of Adjustment.

 

 

               (a) Stock Dividends, Distributions or Subdivisions. In the event the Company shall
issue shares of Common Stock in a stock dividend, stock distribution or subdivision, the Exercise
Price in effect immediately before such stock dividend, stock distribution or subdivision shall,
concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased and the number of shares of Common Stock purchasable by exercise of this
Warrant shall be proportionately increased.

               (b) Combinations or Consolidations. In the event the outstanding shares of Common
Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Exercise Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or consolidation, be
proportionately increased and the number of shares of Common Stock purchasable by exercise of this
Warrant shall be proportionately decreased.

               (c) Adjustment for Reclassification, Exchange or Substitution. In the event that the
class of securities issuable upon the exercise of this Warrant shall be changed into the same or a
different number of shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than any event addressed by Sections 5.1(a), 5.1(b) or
5.1(d)), then and in each such event the Holder shall have the right thereafter to exercise this
Warrant for the kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the number of shares of
the class of securities into which such Warrant might have been exercisable for immediately prior
to such reorganization, reclassification, or change, all subject to further adjustment as provided
herein.

               (d) Adjustment for Merger, Consolidation or Sale of Assets. In the event that the
Company shall merge or consolidate with or into another entity or sell all or substantially all of
its assets, this Warrant shall thereafter be exercisable for the kind and amount of shares of stock
or other securities or property to which a holder of the number of shares of Common Stock of the
Company deliverable upon exercise of this Warrant would have been entitled upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the
Company’s Board of Directors) shall be made in the application of the provisions set forth in this
Section 5 with respect to the rights and interest thereafter of the Holder of this Warrant, to the
end that the provisions set forth in this Section 5 shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon
the exercise of this Warrant.

          5.2 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 5, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to
the Holder a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based.

          5.3 Closing of Books. The Company shall at no time close its transfer books against
the transfer of any shares of Common Stock issued or issuable upon the exercise of this Warrant in
any manner which interferes with the timely and proper issuance of such shares.

     6. Covenants of the Company. During the period within which the rights represented by
this Warrant may be exercised, the Company shall at all times have authorized and reserved for the
purpose of issue upon exercise of the rights evidenced hereby, a sufficient number of shares of the
class of securities issuable upon exercise of this Warrant to provide for the exercise of such
rights. All
securities which may be issued upon the exercise of the rights represented by this Warrant
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens

2

 

and charges with respect to the issue thereof. Upon surrender for exercise,
this Warrant shall be canceled and shall not be reissued; provided, however, that
upon the partial exercise hereof a substitute Warrant of like tenor and date representing the
rights to subscribe for and purchase any such unexercised portion hereof shall be issued.

     7. No Rights as Shareholder Until Exercise. This Warrant shall not entitle the Holder
to any voting rights or any other rights as a stockholder of the Company but upon presentation of
this Warrant with the Subscription Form duly executed and the tender of payment of the Exercise
Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall
forthwith be deemed a stockholder of the Company in respect of the securities for which the Holder
has so subscribed and paid.

     8. No Change Necessary. The form of this Warrant need not be changed because of any
adjustment in the Exercise Price or in the number of shares issuable upon its exercise. A Warrant
issued after any adjustment or any partial exercise or upon replacement may continue to express the
same Exercise Price and the same number of shares (appropriately reduced in the case of partial
exercise) as are stated on this Warrant as initially issued, and that Exercise Price and that
number of shares shall be considered to have been so changed as of the close of business on the
date of adjustment.

     9. Addresses for Notices. All notices, requests, consents and other communications
hereunder shall be in writing, either delivered in hand or mailed by registered or certified mail,
return receipt requested, or sent by facsimile, and shall be deemed to have been duly made when
delivered:

          If to the Holder, to the Holder’s address as shown on the books of the Company; or

          If to the Company, to the address set forth on the first page of this Warrant.

     10. Substitution. In the case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new Warrant of like tenor and denomination and deliver the
same (a) in exchange and substitution for and upon surrender and cancellation of any mutilated
Warrant, or (b) in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft, or destruction of such Warrant (including, without
limitation, a reasonably detailed affidavit with respect to the circumstances of any loss, theft or
destruction), and of indemnity (or, in the case of the initial Holder or any other institutional
holder, an indemnity agreement) satisfactory to the Company.

     11. Transfer Restrictions. This Warrant shall be freely transferable by the Holder,
and may be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise).

     12. Taxes. The Company makes no representation about tax treatment to the Holder with
respect to receipt or exercise of the Warrant or acquiring, holding or disposing of the Common
Stock, and the Holder represents that the Holder has had the opportunity to discuss such treatment
with the Holder’s tax advisers.

     13. Remedies. Each party stipulates that the remedies at law in the event of any
default or threatened default by the other party in the performance or compliance with any of the
terms of this Warrant are and shall not be adequate, and that such terms may be specifically
enforced by a decree for that specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

     14. Governing Law. This Warrant shall be construed and enforced in accordance with,
and governed by, the laws of the State of New York without regard to its principles of conflicts of
laws.

3

 

     15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the Holder and the Company.

[remainder of page intentionally left blank]

4

 

* * *

     IN WITNESS WHEREOF, the parties have caused this Warrant to be executed this 25th
day of July, 2007.

	 	 	 	 	 	 	 
	 	 	TETON ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Bill I. Pennington
	 	 
	 

	 	 	 	Chief Financial Officer and Executive	 	 
	 

	 	 	 	Vice President	 	 

5

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