Document:

ex4-1.htm

Exhibit 4.1

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: October 29, 2012

$[__]

16% CONVERTIBLE NOTE

DUE October 29, 2013

THIS 16% CONVERTIBLE NOTE of Gulf United Energy, Inc., a Nevada corporation (“Maker”), is designated as its 16% Convertible Note, due October 29, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Note”).

Each of Gulf United Energy de Colombia Ltd., a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of Maker (“BVI Colombia”), and Gulf United Energy de Cuenca Trujillo Ltd., a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of Maker (“BVI Peru”, together with BVI Colombia, the “BVI Subs”, and together with Maker, each a “Company” and collectively, the “Companies”), shall guarantee the obligations under this Note pursuant to a Guaranty.

FOR VALUE RECEIVED, Maker promises to pay to the order of [__], or its registered assigns, (the “Holder”), the principal sum of [__] DOLLARS ($[__]) on October 29, 2013 (or such earlier date pursuant to Section 3(b) hereof, such date being the “Maturity Date”), and to pay accrued interest to the Holder upon the Maturity Date on the outstanding principal amount of this Note at the rate of 16% per annum, payable in cash.

This Note is subject to the terms and conditions set forth in the Purchase Agreement, as well as to the following additional provisions:

 

 

  

  

  

 

 

Section 1.   This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration of transfer or exchange.

Section 2.   This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.  Prior to due presentment to Maker for transfer of this Note, Maker and any agent of Maker may treat the Person in whose name this Note is duly registered on the Note register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither Maker nor any such agent shall be affected by notice to the contrary.

Section 3.     Events of Default.

(a)           “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i)          any default in the payment of the principal amount or the accrued interest of this Note or any other amount under any Transaction Document when the same shall become due and payable, either at the Maturity Date or by acceleration or otherwise; or

(ii)         any representation or warranty made by any Company herein, in the Purchase Agreement or in any other Transaction Document was incorrect in any material respect on or as of the date made; or

(iii)        any Company fails to observe or perform any other covenant or agreement contained in this Note or any covenant or agreement contained in any other Transaction Documents, and such failure remains unremedied for a period of ten (10) days after (A) written notice specifying such default has been given to the Companies by the Holder (such grace period to be applicable only in the event such default can be remedied by corrective action of such Company) or (B) any other officer of such Company obtains knowledge of such failure; or

(iv)        any Company commences, or there shall be commenced against any Company a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or any Company  commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to such Company or there is commenced against any Company any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or any Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or any Company  suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or any Company makes a general assignment for the benefit of creditors; or any Company fails to pay, or states that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or any corporate or other action is taken by any Company or any subsidiary thereof for the purpose of effecting any of the foregoing; or

 

  

  

  

 

(v)         a default shall occur with respect to any indebtedness for borrowed money of any Company under any agreement to which such Company is a party (other than the Oil and Gas Contracts) and such default regarding such indebtedness shall exceed $150,000 and such default is not cured on or before the tenth (10th) day prior to the expiration of the period of grace, if any; or

(vi)        a default with respect to any contractual obligation of any Company under or pursuant to any contract, lease, or other agreement (other than any Oil and Gas Contract), to which such Company is a party and such default regarding such contractual obligation shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of such Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $150,000 and such default is not cured on or before the tenth (10th) day prior to the expiration of the period of grace, if any; or

(vii)       a default (other than the defaults described in the Disclosure Documents) with respect to any contractual obligation of any Company under or pursuant to any Oil and Gas Contract and such default is not cured on or before the tenth (10th) day prior to the expiration of the period of grace, if any; or

(viii)      a default by any Company to make payment under any demand letter or other notice from any other Person (including any operator under any Oil and Gas Contract) on or before the tenth (10th) day before the due date taking into account any applicable period of grace, if any; or

(ix)         final judgment for the payment of money in excess of $150,000 shall be rendered against any Company and the same shall remain undischarged for a period of 60 days during which execution shall not be effectively stayed, vacated or bonded; or

(x)          the occurrence of a Trigger Event (as defined in the Purchase Agreement); or

(xi)         any Transaction Document fails to be in full force and effect or any Company contests or repudiates the full force and effect or validity thereof; or

 

 

 

 

  

  

  

 

 

(xii)        failure to comply with the requirements of Section 6.13 (Use of Proceeds) of the Purchase Agreement; or

(xiii)       failure to promptly, and in any event within two (2) Business Days after the Closing Date, pay in full the amounts owed regarding CPO-4 JOA as described on the Disclosure Document; or

(xiv)      the occurrence of a Material Adverse Effect, other than with respect to BVI Colombia’s current defaults, regarding Blocks SSJN-5 and VIM-2, as described on the Disclosure Document; or

(xv)       failure of BVI Colombia to settle its current defaults, regarding Blocks SSJN-5 and VIM-2, as described on the Disclosure Document, on or before the tenth (10th) day prior to the expiration of the cure periods, as described in the Disclosure Document, for an aggregate amount of liability solely to BVI Colombia of less than $2,000,000.

(b)           If any Event of Default occurs, the Administrative Agent, on behalf of the Holder, shall be entitled to exercise all rights and remedies set forth in the Transaction Documents.  In addition, commencing upon an Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at the rate of 18% per annum, or such lower maximum amount of interest permitted to be charged under applicable law.  The Holder need not provide and Maker hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of the rights and remedies hereunder, under any other Transaction Document and as available to Holder under applicable law.  Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

           Section 4.   This Note is a direct obligation of Maker, and the obligation of Maker to repay this Note is absolute and unconditional.

 

           Section 5.    Interest on the amount advanced will accrue on this Note until the Maturity Date at the rate of sixteen percent (16%) per annum, and be payable on the Maturity Date. If any portion of this Note is outstanding on the Maturity Date, interest at the rate of eighteen percent (18%) per annum or the highest rate allowed by law, whichever is lower, shall accrue on the outstanding principal of this Note from the Maturity Date to and including the date of payment by Maker.  All past due interest shall accrue on a daily basis and shall be payable in cash. The Holder may demand payment of all or any part of this Note, together with accrued interest, if any, and any other amounts due hereunder, as of the Maturity Date or any date thereafter.

 

 

  

  

  

        

           Section 6.      This Note shall be secured by the collateral described in the Pledge Agreements and is subject to the terms and conditions of the other Transaction Documents.

 

           Section 7.      Any payment made by Maker to the Holder, on account of this Note shall be applied in the following order of priority: (i) first, to any amounts for fees and expenses payable under any Transaction Document, (ii) second, to accrued interest, if any, through and including the date of payment, and (iv) then, to principal of the Note.

 

           Section 8.      The outstanding principal, together with all accrued and unpaid interest thereon, of the loan evidenced by this Note may be prepaid at any time at the sole discretion of Maker. 

 

           Section 9.      Conversion Matters.

 

                        (a)       Holder shall have the right, but not the obligation (the “Conversion Right”), exercisable at any time prior to the payment in full of this Note, to convert all or part of the outstanding principal amount of this Note and accrued and unpaid interest thereon into shares of common stock of Maker (“Common Stock”), at the Conversion Price.  In lieu of issuing any fractional shares pursuant to this Section 9, Maker may elect to pay cash to Holder for such fractional share at the Conversion Price.       

 

                         (b)      Notwithstanding the Conversion Right of the Holder set forth in subsection (a) above, Maker, at its option, at the request of the Administrative Agent (as defined in the Purchase Agreement), may cause the Holder to convert all of the outstanding principal amount of this Note and accrued and unpaid interest thereon into Common Stock, at the Conversion Price, upon the occurrence of a Forced Conversion Date.  Upon the occurrence of a Forced Conversion Date, Maker shall deliver written notice to the Holder at the address for notice as set forth in Section 9.5 of the Purchase Agreement (the “Notice Address”), confirming the existence of a Forced Conversion Date along with such other items as required pursuant to subsection (d) below.

 

                         (c)      In the event of a New Financing, at the sole option of the Holder, the principal amount of this Note and accrued and unpaid interest outstanding at the time of the New Financing (the “Pay Off Amount”), shall be paid in full, in cash, by the Maker to the Holder.  Notwithstanding the foregoing, in the event of a New Financing consisting of an equity offering, whereby the offering price for each share of Common Stock (the “Offering Price”) is greater than the Conversion Price, then at the sole option of the Holder, the Maker shall (i) pay in cash an amount equal to the Pay Off Amount to the Holder; and (ii) issue to the Holder a number of shares of Common Stock equal to (a) the number of shares of Common Stock that would be issued to the Holder upon the conversion of the Pay Off Amount at the Conversion Price; minus (b) the number of shares of Common Stock that would be issued to the Holder upon the conversion of the Pay Off Amount at the Offering Price.  The Maker shall notify the Holder by written notice at the Notice Address of the Holder of the existence of a New Financing no less than five (5) days prior to the consummation of such New Financing by the Maker.

 

 

  

  

  

 

                         (d)      Before Holder shall be entitled to exercise the Conversion Right or its conversion rights pursuant to subsection (c) above, as applicable, and convert the outstanding principal amount of this Note and accrued and unpaid interest thereon into shares of Common Stock, it shall (i) surrender this Note, duly endorsed, at Maker’s Notice Address; (ii) give written notice to Maker at Maker’s Notice Address, of the election to convert the same and shall state therein whether the conversion is in whole or in part and shall also state the name or names in which the certificate or certificates for shares of Common Stock are to be issued and, if applicable, the name or names in which the replacement note is to be issued; provided, however, that in the event of a conversion in connection with a Forced Conversion Date pursuant to subsection (b) above, the outstanding principal amount of this Note and accrued and unpaid interest thereon shall be converted automatically without any further action by the Holder and whether or not this Note is surrendered to Maker.  Maker shall, as soon as practicable thereafter, issue and deliver to Holder at Holder’s Notice Address a certificate or certificates for the number of shares of Common Stock to which Holder shall be entitled as aforesaid.  In the event this Note is converted with respect to a number of shares of Common Stock which is less than the full number of shares of Common Stock as to which this Note is convertible, a replacement note, convertible, in aggregate, for the number of shares of Common Stock underlying this Note, less the aggregate number of shares of Common Stock issued upon all conversions of this Note, shall be delivered to Holder at Holder’s Notice Address or, in the alternative at such address as directed by the Holder in Holder’s aforesaid notice to Maker.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of this Note to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.

 

                         (e)      This Note is subject to additional mandatory conversion rights as set forth in Section 7 of the Intercreditor Agreement.

 

Section 10.    This Note shall be governed by and interpreted in accordance with the laws of the State of Texas for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents to the exclusive jurisdiction of the state courts of the State of Texas located in Harris County and and the United States District Court for the Southern District of Texas in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non convenes, to the bringing of any such proceeding in such jurisdictions. To the extent determined by such court, Maker shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or protection of any of its rights under this Note.  Maker and the Holder hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement or the Note.

 

 

  

  

  

 

Section 11.    Any and all notices or other communications or deliveries to be provided by Maker or Holder shall be in writing and delivered as set forth in the Purchase Agreement

 

Section 12.    If this Note shall be mutilated, lost, stolen or destroyed, Maker shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a replacement Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to Maker.

 

Section 13.    If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.

 

Section 14.    Assignment.  Holder may not sell, assign or otherwise transfer this Note or all or any part of the indebtedness hereunder (i) without the prior written consent of the Administrative Agent and the other Holders, such consents not to be unreasonably withheld, and (ii) unless such sale, assignment or transfer is made expressly subject to the terms and conditions of the Intercreditor Agreement.

 

Section 15.    Usury Savings/Recapture.

(a)           If the effective rate of interest contracted for under this Note, including the stated rates of interest and fees contracted for hereunder and any other amounts contracted for under this Note or any other Transaction Documents that are deemed to be interest, at any time exceeds the Maximum Rate, then the outstanding principal amount of the loans made by Holder hereunder shall bear interest at a rate which would make the effective rate of interest for the Holder under this Note equal the Maximum Rate until the difference between the amounts which would have been due at the stated rates and the amounts that were due at the Maximum Rate (the “Lost Interest”) has been recaptured by the Holder.

(b)           If, when the principal and interest outstanding under this Note are repaid in full, the Lost Interest has not been fully recaptured by the Holder pursuant to the preceding clause (a), then, to the extent permitted by law, for the loans made hereunder by the Holder the interest rates charged under this Note hereunder shall be retroactively increased such that the effective rate of interest under this Note was at the Maximum Rate since the effectiveness of this Note to the extent necessary to recapture the Lost Interest not recaptured pursuant to the preceding sentence and, to the extent allowed by law, Maker shall pay to Holder the amount of the Lost Interest remaining to be recaptured by Holder.

 

 

  

  

  

 

(c)           NOTWITHSTANDING THE FOREGOING OR ANY OTHER TERM IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO THE CONTRARY, IT IS THE INTENTION OF HOLDER AND MAKER TO CONFORM STRICTLY TO ANY APPLICABLE USURY LAWS. ACCORDINGLY, IF ANY HOLDER CONTRACTS FOR, CHARGES, OR RECEIVES ANY CONSIDERATION THAT CONSTITUTES INTEREST IN EXCESS OF THE MAXIMUM RATE, THEN ANY SUCH EXCESS SHALL BE CANCELED AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL AT HOLDER’S OPTION BE APPLIED TO THE OUTSTANDING AMOUNT OF THE ADVANCES MADE HEREUNDER BY HOLDER OR BE REFUNDED TO MAKER.

   Section 16.    Controlling Agreement.  With respect solely to the relative rights and obligations of the Administrative Agent and the Holders, and not with respect to any right or obligation of the Companies under any Transaction Document, in the event of any conflict between the provisions of this Note and the provisions of the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall govern and control.

 

   Section 17.    Successors and Assigns.  The provisions of this Note shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Note, except as expressly provided in this Note.

 

           Section 16.    Definitions.  For the purposes hereof, in addition to the terms defined elsewhere in this Note: (a) capitalized terms not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms shall have the following meanings:

 

    “Business Day” means a day, other than a Saturday or Sunday, on which banks in Houston, Texas are open for the general transaction of business.

 

    “Conversion Price” means the average of the daily closing price per share of Common Stock for the five (5) days immediately preceding the Closing Date as such daily closing price is reported on the OTCQB or such other financial reporting marketplace that the Common Stock is then listed; provided that that Conversion Price shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction that occurs after the Closing Date.

 

    “Forced Conversion Date” means the calendar date immediately following thirty (30) consecutive trading days at which the daily closing price of the Common Stock (as reported on the OTCQB or such other financial reporting marketplace that the Common Stock is then listed), is at least fifty percent (50%) greater than the Conversion Price.

 

 

  

  

  

 

    “Maximum Rate” means the maximum nonusurious interest rate under applicable law (determined under such laws after giving effect to any items which are required by such laws to be construed as interest in making such determination, including without limitation if required by such laws, certain fees and other costs).

 

    “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

 

    “Purchase Agreement” means the Purchase Agreement, dated as of the date hereof,  among the Companies, the Administrative Agent, the Holder hereunder, the other holders parties thereto, together with other holders that join such agreement pursuant to a Joinder Agreement, as defined therein, as such agreement may be amended, restated, supplemented or otherwise modified from time to time, in accordance with its terms.

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed by a duly authorized officer as of the date first above written.

	 	
GULF UNITED ENERGY, INC.

 

 

	 	
By:__________________________________________

John B. Connally III

Chief Executive Officerex4-2.htm

Exhibit 4.2

 

 

 

 

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY WITH THIS WARRANT, THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED, UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS, OR UPON DELIVERY TO THE ISSUER OF THE SECURITIES OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR SUCH OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS PURSUANT TO AVAILABLE EXEMPTIONS THEREFROM.

THIS WARRANT IS BEING ISSUED PURSUANT TO THE TERMS OF THAT CERTAIN PURCHASE AGREEMENT DATED AS OF THE DATE HEREOF (the “PURCHASE AGREEMENT”), BY AND AMONG GULF UNITED ENERGY, INC., A NEVADA CORPORATION, GULF UNITED ENERGY DE COLOMBIA LTD., A COMPANY ORGANIZED UNDER THE LAWS OF THE BRITISH VIRGIN ISLANDS, GULF UNITED ENERGY DE CUENCA TRUJILLO LTD., A COMPANY ORGANIZED UNDER THE LAWS OF THE BRITISH VIRGIN ISLANDS AND SYDSON OIL & GAS INVESTMENTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND THE OTHER PERSONS SET FORTH THEREIN.

 

Warrant to Purchase

Shares of

Common Stock

of

Gulf United Energy, Inc.

 

	
Warrant No.:  [__]

	
         Number of Shares: [__]

	
Date of Issuance: October 29, 2012

	  

 

This is to certify that [__] or its successors and assigns (collectively, the “Holder”), is the owner of a Warrant (this “Warrant”), which entitles the Holder to purchase from Gulf United Energy, Inc., a Nevada corporation (the “Company”) up to [__] ([__]) shares of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock, par value $0.001 per share, of the Company (the “Shares”), from the period beginning on October 29, 2012 (the “Issue Date”) and ending at the Expiration Time (such period being the “Exercise Period”), at an exercise price of U.S. $0.001 per share, all on the terms and subject to the conditions hereinafter set forth.

 

  

  

  

 

The number of Shares issuable upon the full exercise of this Warrant (the “Number Issuable”), is subject to adjustment from time to time pursuant to the provisions of Section 2 of this Warrant, provided that in no event shall the Exercise Price (as defined below) be less than the par value of the Common Stock.  All references to the Number Issuable shall be deemed to mean the Number Issuable as so adjusted as of the time of determination.  The exercise price per Share to be paid in connection with an exercise of the Warrant (the “Exercise Price”), which is initially U.S.$0.001, is subject to adjustment from time to time pursuant to the provisions of Section 2 of this Warrant.  All references to the Exercise Price shall be deemed to mean the Exercise Price as so adjusted as of the time of determination.

Capitalized terms used herein but not otherwise defined shall have the respective meanings ascribed to them in the Purchase Agreement.

 

1.           Manner of Exercise of Warrant.

(a)           This Warrant may be exercised by the Holder, in whole or in part, during the Exercise Period upon delivery to the Company at the principal executive office of the Company, of (i) this Warrant, (ii) a completed Notice of Cash Exercise, in the form attached hereto as Exhibit A-1, (iii) payment of the aggregate Exercise Price for the Shares issuable upon such exercise, which shall be payable either in cash or by a certified or official bank check payable to the order of the Company, at the Holder’s option, and (iv) such other documents and instruments, duly and properly executed, as the Company shall reasonably require from the Holder or the Holder’s transferees (collectively, the “Warrant Cash Exercise Documentation”).  Any request to issue Shares in a name other than the name of the Holder shall be deemed a transfer of this Warrant and shall be subject to compliance with Section 7.

(b)           To the extent this Warrant is not previously exercised, and if the fair market value of one Share is greater than the Exercise Price, the Holder may elect to receive Shares equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant at the principal office of the Company together with the form of Notice of Cashless Exercise attached hereto as Exhibit A-2 (the “Warrant Non-Cash Exercise Documentation” and, collectively with the Warrant Cash Exercise Documentation, the “Warrant Exercise Documentation”), in which event the Company shall issue to Holder a number of Shares computed using the following formula:

X = Y (A-B)

      A

	
   WhereX =

	
the number of Shares to be issued to Holder.

	
Y = 

	
the number of Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).

	
A =

	

the Fair Market Value (at the date of such calculation).

 

	
B =

	

Exercise Price (as adjusted to the date of such calculation).

 

  

  

  

(c)           As promptly as practicable, the Company shall deliver or cause to be delivered (i) a certificate or certificates representing the number of Shares specified in the Warrant Exercise Documentation, (ii) if applicable, cash in lieu of any fractional share, as hereinafter provided, and (iii) if the Warrant evidenced hereby is being exercised with respect to a number of Shares which is less than the full number of Shares as to which the Warrant evidenced hereby is exercisable, a new warrant certificate or certificates, of like tenor, exercisable, in aggregate, for the number of Shares underlying this Warrant, less the aggregate number of Shares issued upon all exercises of this Warrant.  Such exercise shall be deemed to have been made at the close of business on the date of delivery of all Warrant Exercise Documentation so that the Person entitled to receive Shares upon such exercise shall be treated for all purposes as having become the record holder of such Shares at such time.  No such surrender shall be effective to constitute the Person entitled to receive such shares as the record holder thereof while the transfer books of the Company for Shares are closed for any purpose; but any such surrender of this Warrant for exercise during any period while such transfer books are so closed shall become effective for exercise immediately upon the reopening of such transfer books, as if the exercise had been made on the date the Warrant Exercise Documentation was received.

 

(d)           The issuance of certificates for Shares issuable upon exercise of this Warrant shall be made without charge to the Holder for any issuance tax in respect thereof, if any, other than taxes in connection with the issuance of certificates for Shares in the name of any Person other than the Holder.

(e)           In connection with the exercise of this Warrant, no fractions of Shares shall be issued, but, in lieu thereof, the Company shall, in its sole discretion, either (i)  pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Fair Market Value of such share on the Business Day which next precedes the date of exercise or (ii) round-up to the next whole number.

 

2.           Adjustment of Number Issuable and Exercise Price.  If the Common Stock as presently constituted shall be changed into or exchanged for a different number or kind of shares or other securities of the Company or of another entity (whether by reason of merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise) or if the number of shares of Common Stock shall be increased through the payment of a share dividend, the Holder shall receive upon exercise of this Warrant, the number and kind of shares or other securities into which each outstanding share of Common Stock shall be so changed, or for which each such share of Common Stock shall be exchanged, or to which each such share of Common Stock shall be entitled, as the case may be.  The Exercise Price and other terms of this Warrant shall be appropriately amended to reflect the foregoing events.  If there shall be any other change in the number or kind of the outstanding shares of Common Stock, or of any shares or other securities into which the Common Stock shall have been changed, or for which the shares of Common Stock shall have been exchanged, then, if the Board shall, in its sole discretion, determine that such change equitably requires an adjustment in the Exercise Price, such adjustment shall be made in accordance with that determination.  Notice of any adjustment shall be given by the Company to the Holder as provided in Section 4 herein.

 

 

  

  

  

 

3.         Redemption.  The Company shall not have any right to redeem this Warrant.

4.         Notice of Certain Events.  In case of any adjustments to the Number Issuable or Exercise Price, the Company shall provide the Holder prior written notice of the adjustments. Such notice shall provide (a) the date on which a record is to be taken for the purpose of such dividend, distribution, subdivision or combination of Common Stock, or similar event or transaction, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to or affected by such dividend, distribution, subdivision or combination, or similar event or transaction, are to be determined, or (b) the date on which such consolidation, merger, dissolution, liquidation, winding-up, sale of all or substantially all of the assets or capital stock of the Company or similar event or transaction is expected to become effective.

5.         Registered Holder.  The Person in whose name this Warrant is registered shall be deemed the owner hereof for all purposes.

6.         Transfer of Warrants.  The Holder may assign this Warrant and its rights and obligations hereunder in whole or in part, without the prior written consent of the Company, after notice duly given by the Holder to the Company.  Any transfer of this Warrant or the rights represented hereby, shall be effected by the surrender of this Warrant, along with a completed form of assignment, in the form attached hereto as Exhibit B, duly and properly completed and executed by the Holder hereof, and delivered to the principal executive office of the Company.

7.         Registration Rights.  The Holder (and its assignees), shall have the rights as set forth in the Registration Rights Agreement in respect to the Shares as set forth in the Registration Rights Agreement.

8.         No Rights as Shareholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 1 herein.  Upon surrender of this Warrant and the payment of the aggregate Exercise Price, the Shares so purchased shall be and be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment.

 

9.         Replacement of Warrants.  Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity in customary form, and (if mutilated) upon surrender and cancellation of this Warrant, the Company shall make and deliver to the Holder a new warrant certificate of like tenor in lieu of this Warrant.  Any replacement warrant certificate made and delivered in accordance with this Section 9 shall be dated as of the date hereof.

10.       GOVERNING LAW.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).

11.         Benefits of Warrant.  This Warrant will inure to the benefit of and be

binding upon the Holder, the Company and their respective successors and assigns.  Nothing in this Warrant shall be construed to give the Holder any rights as a holder of Shares until such time, if any, as this Warrant is exercised in accordance with the provisions hereof.

 

 

  

  

  

12.         Definitions.  For the purposes of this Warrant, the following terms shall have the meanings indicated below:

“Board” means the Board of Directors of the Company.

“Business Day” means any day that is not a Saturday, Sunday or a legal holiday in the State of Texas.

“Common Stock” means (a) the Company’s Common Stock, par value $0.001 per share, and (b) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such.

“Expiration Time” means 5:00 p.m., Houston, Texas time, on October 29, 2013.

“Fair Market Value” means the average of the daily closing price per share of Common Stock for the three (3) days immediately preceding the date of determination as such daily closing price is reported on the OTCQB or such other financial reporting marketplace that the Common Stock is then listed.

“Person” means any individual, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

“Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of October 29, 2012, by and among the Company and the other Persons referred to therein, as such agreement may be amended, restated or modified and in effect from time to time.

“Securities Act” means the Securities Act of 1933, as amended.

13.         Notices.  All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be sufficient if delivered personally or sent by telecopy (with confirmation of receipt) or by registered or certified mail, postage prepaid, return receipt requested, to the addresses as set forth in Section 9.4 of the Purchase Agreement.  Each such notice, request or communication shall be effective when received or, if given by mail, when delivered at the address specified by such Person or on the fifth (5th) Business Day following the date on which such communication is posted, whichever occurs first.

14.         Securities Laws; Legend.  The Holder (and its transferees and assigns), by acceptance of this Warrant, covenants and agrees that such Holder is acquiring this Warrant evidenced hereby, and, upon exercise hereof, the Shares, for its own account as an investment and not with a view to distribution thereof.  Neither this Warrant nor the Shares issuable hereunder have been registered under the Securities Act or any state securities laws and no transfer of this Warrant or any Shares shall be permitted unless the Company has received notice of such transfer in the form of the assignment attached hereto as Exhibit B, accompanied, if requested by the Company, by an opinion of counsel reasonably satisfactory to the Company that an exemption from registration of such Warrant or Shares under the Securities Act is available for such transfer, except that no such opinion shall be required after the registration for resale of the Shares has become effective.  Each certificate representing Shares shall bear a legend substantially to the following effect unless such Shares have been registered under the Securities Act and any other applicable federal and state securities laws:

 

 

 

  

  

  

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED, UNLESS REGISTERED UNDER THE ACT AND OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS, OR UPON DELIVERY TO THE ISSUER OF THE SECURITIES REPRESENTED HEREBY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES REPRESENTED HEREBY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS PURSUANT TO AVAILABLE EXEMPTIONS THEREFROM.”

 

Any purported transfer of the Warrant or Shares not in compliance with the provisions of this Section 14 shall be null and void.  Stop transfer instructions have been or will be imposed with respect to the Shares so as to restrict resale or other transfer thereof, subject to this Section 14.

 

15.         Amendments and Waivers.  No modification, amendment or waiver of any term of, or consent required by, this Warrant, nor any consent to any departure herefrom, shall be effective unless it is in writing and signed by the Company and the Holder.  Such modification, amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

16.         Assignment.  Any assignment of this Warrant and the rights of the Holder hereunder, shall be carried out in accordance with Section 6 herein.  Any instrument purporting to make a transfer or assignment in violation of this Section 16 shall be void and of no effect.

 

17.         Consent to Exclusive Jurisdiction and Service of Process.  The Company and the Holder each hereby irrevocably and unconditionally submits to the jurisdiction of the courts of the State of Texas and of the Federal courts sitting in the State of Texas in any action or proceeding directly or indirectly arising out of or relating to this Warrant or the transactions contemplated hereby (whether based in contract, tort, equity or any other theory).  The Company and the Holder each agrees that all actions or proceedings arising out of or relating to this Warrant must be litigated exclusively in the State of Texas or, to the extent permitted by law, the United States Court – Southern District of Texas, in Harris County, Texas and accordingly, each party irrevocably waives any objection which he or it may now or hereafter have to the laying of the venue of any such action or proceeding in any such court.  The Company and the Holder each further irrevocably consents to service of process in the manner provided for notices in Section 13.  Nothing in this Warrant will affect the right of the Company or the Holder to serve process in any other manner permitted by law.

 

 

  

  

  

 

18.         Tax Reporting.  The Company and the initial Holder agree that the separate cash consideration paid by the initial Holder for this Warrant is separately bargained for consideration equal to the Warrant’s fair market value, and each of the Company and the initial Holder agree to consistently utilize such value for federal and applicable state income tax reporting purposes.

 

19.         Termination.  Notwithstanding any other provision of this Warrant, the right to exercise this Warrant shall terminate at the Expiration Time.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

In Witness Whereof, the Company has caused this Warrant to be duly executed as of the Issue Date.

 

	 	
GULF UNITED ENERGY, INC.

	 	  
	 	  
	 	
By:_____________________________________

	 	
John B. Connally III

	 	
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

Exhibit A-1

NOTICE OF EXERCISE OF WARRANT

BY CASH PAYMENT OF EXERCISE PRICE

________________, 20__

	
 

Holder Name and Address:

 

[__]

	
 

Aggregate Exercise Price of Warrant Before Exercise:

 

Aggregate Exercise Price Being Exercised:

 

	
 

 

$

 

 

$

 

	  	
 

Exercise Price Per Share:

	
 

$

 

	  	
Number of Shares of Common Stock to be Issued Under this Notice:

 

Remaining Number of Shares of Common Stock After Exercise (if any):

 

	  

CASH EXERCISE

Gentlemen:

The undersigned registered Holder of the Warrant delivered herewith (the “Warrant”), hereby irrevocably exercises such Warrant for, and purchases thereunder, shares of the Common Stock of Gulf United Energy, Inc., a Nevada corporation, as provided below.  Capitalized terms used herein, unless otherwise defined herein, shall have the meanings given in the Warrant.  The aggregate Exercise Price to be applied toward the purchase of Common Stock pursuant to this Notice of Exercise is $__________, thereby leaving a remainder aggregate Exercise Price (if any) of $____________.  Such exercise shall be pursuant to the cash exercise provisions of Section 1(a) of the Warrant.  Therefore, Holder makes payment with this Notice of Exercise by way of check payable to the Company in the amount of $___________________.  Such check is payment in full under the Warrant for ___________ shares of Common Stock based upon the Exercise Price of $___________ per share, as currently in effect under the Warrant.  Holder requests that the certificates for the purchased shares of Common Stock be issued in the name of and delivered to ____________________.  To the extent the foregoing exercise is for less than the full Number Issuable, a replacement Warrant representing the remainder of the Number Issuable and otherwise of like form, tenor and effect should be delivered to Holder along with

the share certificates evidencing the Common Stock issued in response to this Notice of Exercise.

	  	
 

HOLDER: 

 

 

[__] 

 

 

By: 

 

 

 

 

 

 

 

 

  

  

  

 

Exhibit A-2

NOTICE OF EXERCISE OF WARRANT

PURSUANT TO CASHLESS EXERCISE PROVISIONS

_______________, 20__

	
 

Holder Name and Address:

 

[__]

	
 

Aggregate Exercise Price of Warrant Before Exercise:

 

Aggregate Exercise Price Being Exercised:

 

	
 

 

$

 

 

$

 

	  	
 

Exercise Price Per Share:

	
 

$

 

	  	
Number of Shares of Common Stock to be Issued Under this Notice:

 

Remaining Number of Shares of Common Stock After Exercise (if any):

 

	  

CASHLESS EXERCISE

Gentlemen:

The undersigned, registered Holder of the Warrant delivered herewith (the “Warrant”), hereby irrevocably exercises such Warrant for, and purchases thereunder, shares of the Common Stock of Gulf United Energy, Inc., a Nevada corporation, as provided below.  Capitalized terms used herein, unless otherwise defined herein, shall have the meanings given in the Warrant.  The portion of the aggregate Exercise Price to be applied toward the purchase of Common Stock pursuant to this Notice of Exercise is $___________, thereby leaving a remainder aggregate Exercise Price (if any) equal to $___________.  Such exercise shall be pursuant to the net issue exercise provisions of Section 1(b) of the Warrant; therefore, Holder makes no payment with this Notice of Exercise.  The number of shares to be issued pursuant to this exercise shall be determined by reference to the formula in Section 1(b) of the Warrant which requires the use of the current per share fair market value of the Company’s Common Stock.  The current fair market value of one share of the Company’s Common Stock shall be determined in the manner provided in Section 1(b), which amount has been determined to be $_________, which figure is acceptable to Holder for calculations of the number of shares of Common Stock issuable pursuant to this Notice of Exercise.  Holder requests that the certificates for the purchased shares

of Common Stock be issued in the name of and delivered to ______________.  To the extent the foregoing exercise is for less than the full Number Issuable, a replacement Warrant representing the remainder of the Number Issuable (and otherwise of like form, tenor and effect) shall be delivered to Holder along with the share certificate evidencing the Common Stock issued in response to this Notice of Exercise.

HOLDER:

[__]

By:                                                                

  

  

  

 

Exhibit B

Form of Assignment of Warrant

The undersigned hereby assigns and transfers this Warrant to [__________], whose Social Security Number or Tax ID Number is [__________] and whose address of record shall be [__________], and irrevocably appoints the Secretary of Gulf United Energy, Inc., a Nevada corporation (the “Company”) as agent to transfer this security to such assignee on the books of the Company.   Such agent may substitute another to act for such agent.

       [__]

	
Dated:_____________________

 

	
By: ________________________________

 

 

 

[__]

	  	  
	  	
 

 

__________________________________

Signature of Authorized Signatory

 

 

__________________________________

Name of Authorized Signatory

 

 

__________________________________

Title of Authorized Signatory

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