EXHIBIT 10.4
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WARRANT AGREEMENT
Dated as of June 3, 1997
Of
▇▇▇▇▇▇ PETROLEUM CORPORATION
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Warrants to Purchase Shares of Common Stock,
No Par Value
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TABLE OF CONTENTS
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES................... 1
SECTION 1.01. Issuance of Warrants........................................ 1
SECTION 1.02. Form of Warrant Certificates................................ 2
SECTION 1.03. Execution of Warrant Certificates........................... 2
SECTION 1.04. Authentication and Delivery................................. 2
SECTION 1.05. Temporary Warrant Certificates.............................. 3
SECTION 1.06. Separation of Warrants and Notes............................ 3
SECTION 1.07. Registration................................................ 3
SECTION 1.08. Registration of Transfers and Exchanges..................... 4
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates........................................ 10
SECTION 1.10. Offices for Exercise, etc................................... 11
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE............ 11
SECTION 2.01. Duration of Warrants........................................ 11
SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery........... 11
SECTION 2.03. Cancellation of Warrant Certificates........................ 13
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS...................... 13
SECTION 3.01. Enforcement of Rights....................................... 13
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY..................... 13
SECTION 4.01. Payment of Taxes............................................ 13
ARTICLE V
ADJUSTMENTS............................... 14
SECTION 5.01. Adjustment of Exercise Price and Number of
Shares Issuable............................................. 14
SECTION 5.02. Fractional Interest......................................... 17
SECTION 5.03. When Adjustment Not Required................................ 18
SECTION 5.04. Challenge to Good Faith Determination....................... 18
SECTION 5.05. Treasury Stock.............................................. 18
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SECTION 5.06. Notices to Warrant Holders.................................. 18
ARTICLE VI
CONCERNING THE WARRANT AGENT....................... 19
SECTION 6.01. Warrant Agent............................................... 19
SECTION 6.02. Conditions of Warrant Agent's Obligations................... 19
SECTION 6.03. Resignation and Appointment of Successor.................... 23
ARTICLE VII
MISCELLANEOUS.............................. 24
SECTION 7.01. Amendment................................................... 24
SECTION 7.02. Notices and Demands to the Company and
Warrant Agent............................................... 25
SECTION 7.03. Address for Notices to Parties and for
Transmission of Documents................................... 25
SECTION 7.04. Notices to Holders.......................................... 25
SECTION 7.05. APPLICABLE LAW.............................................. 26
SECTION 7.06. Obtaining of Governmental Approvals......................... 26
SECTION 7.07. Persons Having Rights Under Agreement....................... 26
SECTION 7.08. Headings.................................................... 26
SECTION 7.09. Counterparts................................................ 26
SECTION 7.10. Inspection of Agreement..................................... 26
SECTION 7.11. Successors.................................................. 26
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate to be Delivered Upon
Exchange or Registration of
Transfer of Warrants
EXHIBIT C - Transferee Letter of Representation
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INDEX OF DEFINED TERMS
Defined Term Section
Additional Warrants............................................ Recitals
Agreement...................................................... Recitals
Amended Series A Preferred Stock............................... 5.01(g)
Business Day................................................... 2.01
Common Stock................................................... Recitals
Company........................................................ Recitals
Conversions.................................................... 5.01 (g)
Convertible Securities......................................... 5.01(c)
Definitive Warrants............................................ 1.02
Depository..................................................... 1.02
Distribution................................................... 5.01(c)
Election to Exercise........................................... 2.02(b)
Exercisability Date............................................ 2.02(a)
Exercise Date.................................................. 2.02(d)
Exercise Price................................................. 2.02(a)
Expiration Date................................................ 2.01
Expiration Time................................................ 5.01(e)
Global Warrants................................................ 1.02
Indenture...................................................... Recitals
Initial Purchasers............................................. Recital
Issue Date..................................................... 2.02(g)
Majority Holders............................................... 5.04
Notes.......................................................... Recitals
Note Warrants.................................................. Recitals
Officers' Certificate.......................................... 1.08(f)
Options........................................................ 5.01(c)
Purchased Shares............................................... 5.01(e)
Registrar...................................................... 1.07
Registration Rights Agreement.................................. 7.06
Redemption Warrants............................................ Recitals
Related Parties................................................ 6.02(e)
Resale Restriction Termination Date............................ 1.08(a)
Securities Act................................................. 1.08(a)
Separability Date.............................................. 1.06
Shares......................................................... 1.01
Time of Determination.......................................... 5.01(g)
Trustee........................................................ Recitals
Units.......................................................... Recitals
Warrant Agent.................................................. Recitals
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Warrant Agent Office........................................... 1.10
Warrant Certificates........................................... Recitals
Warrant Register............................................... 1.07
Warrants....................................................... Recitals
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement"), dated as of June 3, 1997, by and
between ▇▇▇▇▇▇ Petroleum Corporation, a Louisiana corporation (together with any
successor thereto, the "Company"), and U.S. Trust Company of Texas, N.A. (the
"Warrant Agent") for the benefit of the holders from time to time of the Warrant
Certificates (as hereinafter defined).
WHEREAS, the Company has entered into a purchase agreement dated June 3,
1997 (the "Purchase Agreement") with ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the "Initial
Purchaser") in which the Company has agreed, among other things, to sell to the
Initial Purchaser 70,000 units (the "Units") consisting in the aggregate of (i)
$70,000,000 aggregate principal amount of 13.5% Senior Secured Notes due June
1, 2004 (the "Notes") of the Company to be issued under an indenture dated as of
June 3, 1997 (the "Indenture"), between the Company and U.S. Trust Company of
Texas, N.A., as trustee (the "Trustee"), and (ii) 70,000 warrants to purchase an
aggregate of 29,067 shares of common stock, no par value (the "Common Stock"),
of the Company (the "Note Warrants"). In addition, the Company has agreed to
issue to the Initial Purchaser 11,666 warrants to purchase an additional 4,844
shares of Common Stock (the "Additional Warrants" and, together with the Note
Warrants, the "Warrants", and the certificates evidencing the Warrants being
hereinafter referred to as "Warrant Certificates"), in each case subject to
adjustment in accordance with the terms hereof; and
WHEREAS, the Note Warrants and the Notes comprising part of the Units shall
be separately transferable immediately upon issuance; and
WHEREAS, in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, the Company wishes to set forth in
this Agreement, among other things, the terms and conditions on which the
Warrants may be issued, exchanged, canceled, replaced and exercised;
NOW, THEREFORE, in consideration of the purchase of the Units by the
Initial Purchaser, the Company executes and delivers this Agreement for the
benefit of the holders from time to time of the Warrant Certificates.
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Each Warrant Certificate shall
evidence the number of Warrants specified therein, and each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase from the Company (and the Company shall issue and sell
to such holder of the Warrant) 0.41524 fully paid and non-assessable shares of
the Company's Common Stock (the shares of Common Stock purchasable upon exercise
of a Warrant being hereinafter referred to as the "Shares" and, where
appropriate, such term shall also mean the other securities or
property purchasable and deliverable upon exercise of a Warrant as provided in
Article V) at the price specified herein and therein, in each case subject to
adjustment as provided herein and therein.
SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates
will initially be issued either in global form (the "Global Warrants"),
substantially in the form of Exhibit A hereto (including footnote 1 thereto), or
in registered form as definitive Warrant certificates (the "Definitive
Warrants"). The Warrant Certificates evidencing the Global Warrants or the
Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto. Such Global
Warrants shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and Depositary
(as defined below) in accordance with written instructions given by the holder
thereof. The Depository Trust Company shall act as the depositary with respect
to the Global Warrants (the "Depositary") until a successor shall be appointed
by the Company. Upon written request, a Warrant holder may receive from the
Warrant Agent Definitive Warrants as set forth in Section 1.08 hereof.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary, under its corporate seal. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a facsimile hereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificate so
signed shall be countersigned and delivered by the Warrant Agent or disposed of
by the Company, such Warrant Certificate nevertheless may be coun tersigned and
delivered or disposed of as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution and delivery of
this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the immediately
following paragraph, Warrant Certificates shall be authenticated by manual
signature and dated the date of authentication by the Warrant Agent and shall
not be valid for any purpose unless so authenticated and dated. The Warrant
Certificates shall be numbered and shall be registered in the Warrant Register
(as defined in Section 1.07 hereof).
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Upon the receipt by the Warrant Agent of a written order of the Company,
which order shall be signed by the chairman of its Board of Directors, its
president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated, whether
the Warrants are to be Global Warrants or Definitive Warrants, the date of such
Warrants and such other information as the Warrant Agent may reasonably request,
without any further action by the Company, the Warrant Agent is authorized, upon
receipt from the Company at any time and from time to time of the Warrant
Certificates, duly executed as provided in Section 1.03 hereof, to authenticate
the Warrant Certificates and deliver them. Such authentication shall be by a
duly authorized signatory of the Warrant Agent (although it shall not be
necessary for the same signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who authenticated such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
authenticated on behalf of the Warrant Agent by such persons as, at the actual
time of authentication of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall be in
substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and the Warrant Agent
shall, upon written request of the Company, authenticate and deliver, temporary
Warrant Certificates, which are printed, lithographed, typewritten or otherwise
produced, substantially of the tenor of the definitive Warrant Certificates in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers of the Company executing such
Warrant Certificates may determine, as evidenced by their execution of such
Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall, upon written request of the Company, authenticate and deliver in exchange
therefor, one or more definitive Warrant Certificates representing in the
aggregate a like number of Warrants. Until so exchanged, the holder of a
temporary Warrant Certificate shall in all respects be entitled to the same
benefits under this Agreement as a holder of a definitive Warrant Certificate.
SECTION 1.06. Separation of Warrants and Notes. The Notes and Warrants
will be separately transferable immediately upon issuance of the Units.
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SECTION 1.07. Registration. The Company will keep, at the office or
agency maintained by the Company for such purpose, a register or registers in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of, and registration of transfer and exchange
of, Warrants as provided in this Article. Each person designated by the Company
from time to time as a person authorized to register the transfer and exchange
of the Warrants is hereinafter called, individually and collectively, the
"Registrar". Initially, the Warrant Agent shall act as Registrar. Upon written
notice to the Warrant Agent and any acting Registrar, the Company may appoint a
successor Registrar for such purposes.
The Company will at all times designate one person (who may be the Company
and who need not be a Registrar) to act as repository of a master list of names
and addresses of the holders of Warrants (the "Warrant Register"). The Company
will act as such repository unless and until some other person is, by written
notice from the Company to the Warrant Agent and the Registrar, designated by
the Company to act as such. The Company shall cause each Registrar to furnish
to such repository, on a current basis, such information as to all registrations
of transfer and exchanges effected by such Registrar, as may be necessary to
enable such repository to maintain the Warrant Register on as current a basis as
is practicable.
SECTION 1.08. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When Definitive
Warrants are presented to the Warrant Agent with a written request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants, the Warrant Agent shall register the
transfer or make the exchange as requested if the
requirements under this Warrant Agreement as set forth in
this Section 1.08 for such transactions are met; provided,
however, that the Definitive Warrants presented or
surrendered for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Company and the Warrant Agent, duly executed by the
holder thereof or by its attorney, duly authorized in
writing; and
(y) in the case of Warrants the offer and sale of which has
not been registered under the Securities Act of 1933, as
amended, (the "Securities Act"), and are presented for
transfer or exchange prior to (x) the date which is two
years after the later of the date of original issue (the
"Issue Date") and the last date on which the Company or
any affiliate of the Company was the owner of such
Warrant, or any predecessor thereto and (y) such later
date, if any, as may be required by any subsequent
change in applicable
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law (the "Resale Restriction Termination Date"), such
Warrants shall be accompanied, in the sole discretion of
the Company, by the following additional information and
documents, as applicable:
(A) if such Warrant is being delivered to the Warrant
Agent by a holder for registration in the name of
such holder, without transfer, a certification from
such holder to that effect (in substantially the
form of Exhibit B hereto); or
(B) if such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 or
Regulation S under the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto); or
(C) if such Warrant is being transferred to an
institutional "accredited investor" within the
meaning of subparagraph (a)(l), (a)(2), (a)(3) or
(a)(7) of Rule 501 under the Securities Act,
delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and a
letter of representation from the transferee in
substantially the form of Exhibit C hereto; or
(D) if such Warrant is being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification to that
effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably
acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant. A Definitive Warrant may not be transferred for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate written instruments of
transfer, in form satisfactory to the Warrant Agent, together with:
(A) certification, substantially in the form of Exhibit B hereto,
that such Definitive Warrant is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act; and
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(B) written instructions directing the Warrant Agent to make, or
to direct the Depositary to make, an endorsement on the
Global Warrant to reflect an increase in the aggregate amount
of the Warrants represented by the Global Warrant
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be increased accordingly. If no
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall, upon written request of the Company, authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Section 1.08 and the procedures
of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant for a
Definitive Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may upon request transfer such beneficial interest for a
Definitive Warrant. Upon receipt by the Warrant Agent of
written instructions or such other form of written
instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a
beneficial interest in a Global Warrant and upon receipt by
the Warrant Agent of a written order or such other form of
written instructions as is customary for the Depositary or the
person designated by the Depositary as having such a
beneficial interest containing registration instructions and,
in the case of any such transfer or exchange prior to the
Resale Restriction Termination Date, the following additional
information and documents:
(A) if such beneficial interest is being transferred to the
person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a
qualified institutional buyer (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S
under the Securities Act, a certification to that effect
from the transferee or transferor (in substantially the
form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of
subparagraph (a)(l),
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(a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities
Act, delivery of a certification to that effect (in
substantially the form of Exhibit B hereto), a letter of
representation from the transferee in substantially the
form of Exhibit C hereto and an opinion of counsel
reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably acceptable to
the Company to the effect that such transfer is in
compliance with the Securities Act
then the aggregate amount of the Global Warrant will be reduced
by the Depositary or its custodian and, following such reduction,
the Company will execute and, upon receipt of an authentication
order in the form of an Officers' Certificate (as defined), the
Warrant Agent will authenticate and deliver to the transferee a
Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section
1.08(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent in writing. The
Warrant Agent shall deliver such Definitive Warrants to the
persons in whose names such Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of Depositary.
If at any time:
(i) the Depositary for the Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Warrant and a successor Depositary for the
Global Warrant is not appointed by the Company within 90 days
after delivery of such notice or
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(ii) the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must be
the principal executive officer, principal financial officer or principal
accounting officer) (an "Officers' Certificate") requesting the authentication
and delivery of Definitive Warrants, will authenticate and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.
(g) Legends.
(i) Except to the extent permitted by the following paragraph
(ii), each Warrant Certificate evidencing the Global Warrants
and the Definitive Warrants (and all Warrants issued in
exchange therefor or substitution thereof) shall bear a
legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT" ) AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904 UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
▇▇▇▇▇▇ PETROLEUM CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE COMPANY AND
THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
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EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE WARRANT AGENT AND THE COMPANY
SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION, "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
THIS SECURITY IS SUBJECT TO A REGISTRATION RIGHTS AGREEMENT DATED AS OF
JUNE 3, 1997 BETWEEN THE COMPANY AND ▇▇▇▇▇▇▇▇▇ & COMPANY, INC., A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
To the extent a Warrant Certificate evidences a Global Warrant, such
Warrant Certificate shall also bear the legend with respect thereto
substantially in the form set forth on Exhibit A hereto.
(ii) Upon any sale or transfer of a Warrant pursuant to Rule 144
under the Securities Act in accordance with this Section
1.08 or an effective registration statement under the
Securities Act:
(A) in the case of any Warrant that is a Definitive Warrant, the
Warrant Agent shall, upon written instructions from the
Company, permit the holder thereof to exchange such Warrant
for a Definitive Warrant that does not bear the first
paragraph of the legend set forth above and rescind any
related restriction on the transfer of such Warrant; and
(B) any such Warrant represented by a Global Warrant shall not
be subject to the provisions set forth in (i) above (such
sales or transfers being subject only to the provisions of
Section 1.08(c) hereof); provided, however, that with
respect to any request for an exchange of a Warrant that is
represented by a Global Warrant for a Definitive Warrant
that does not bear the first paragraph of the legend set
forth above, which request is made in reliance upon Rule 144
under the Securities Act, the holder thereof shall certify
in writing to the Warrant Agent that such request is being
made pursuant to Rule 144 under the Securities Act (such
certification to be substantially in the form of Exhibit B
hereto).
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(h) Cancellation and/or Adjustment of a Global Warrant. At such time
as all beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to or retained and canceled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, redeemed, repurchased or canceled, the number
of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant by the Warrant Agent or the
Depositary to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Definitive
Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Warrant Agent's request, and
the Warrant Agent shall authenticate Definitive Warrants and
Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration of transfer or exchange of Definitive Warrants
or Global Warrants shall be the valid obligations of the
Company, entitled to the same benefits under this Warrant
Agreement as the Definitive Warrants or Global Warrants
surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and
treat the person in whose name any Warrant is registered as
the absolute owner of such Warrant, and neither the Warrant
Agent nor the Company shall be affected by notice to the
contrary.
(j) Payment of Taxes. The Company or the Warrant Agent may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any exchange or transfer pursuant to this
Section 1.08.
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity reasonably satisfactory to them and,
in the case of mutilation or defacement, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of written notice to the Company or
the Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course, the Company shall execute, and an authorized
signatory of the Warrant Agent shall manually authenticate and deliver, in
exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute
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Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall constitute an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of (but shall be subject to all the
limitations of rights set forth in) this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Section 1.09 are exclusive with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates and shall preclude (to the extent lawful) any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement of lost, stolen, destroyed, defaced
or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to authenticate and deliver the new
Warrant Certificates required pursuant to the provisions of this Section.
SECTION 1.10. Offices for Exercise, etc. So long as any of the Warrants
remain outstanding, the Company will designate and maintain in the continental
United States: (a) an office or agency where the Warrant Certificates may be
presented for exercise, (b) an office or agency where the Warrant Certificates
may be presented for registration of transfer and for exchange (including the
exchange of temporary Warrant Certificates for definitive Warrant Certificates
pursuant to Section 1.05 hereof), and (c) an office or agency where notices and
demands to or upon the Company in respect of the Warrants or of this Agreement
may be served. The Company may from time to time change or rescind such
designation, as it may deem desirable or expedient. The Company will give to
the Warrant Agent written notice of the location of any such office or agency
and of any change of location thereof. The Company hereby designates the
corporate trust office of the Warrant Agent in New York, New York (the "Warrant
Agent Office"), as the initial agency maintained for each such purpose.
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
SECTION 2.01. Duration of Warrants. Subject to the terms and conditions
established herein, the Warrants shall expire at 5:00 p.m., New York City time,
on June 1, 2004 (the "Expiration Date"). Each Warrant may be exercised on any
Business Day (as defined below) on or after the Exercisability Date (as defined
below) and on or prior to the Expiration Date.
Any Warrant not exercised before the close of business on the Expiration
Date relating to such Warrant shall become void, and all rights of the holder
under the Warrant Certificate evidencing such Warrant and under this Agreement
shall cease.
"Business Day" shall mean any day on which (i) banks in New York City or
the City of Houston, Texas, (ii) the principal national securities exchange or
market, if any, on which the Common Stock is listed or admitted to trading and
(iii) the principal national securities exchange or market, if any, on which the
Warrants are listed or admitted to trading are open for business.
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SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery. (a)
Subject to the provisions of this Agreement, a holder of Warrants shall have the
right to purchase from the Company on or after the date hereof (the
"Exercisability Date") and on or prior to the Expiration Date 0.41524 fully paid
and non-assessable Shares per each Warrant such holder owns, subject to
adjustment in accordance with Article V hereof, at the initial purchase price of
$1.00 for each Share purchased subject to adjustment in accordance with Article
V hereof (the "Exercise Price").
(b) Warrants may be exercised on or after the Exercisability Date by
(i) surrendering at any Warrant Agent Office the Warrant Certificate evidencing
such Warrants with the form of election to purchase Shares set forth on the
reverse side of the Warrant Certificate (the "Election to Exercise") duly
completed and signed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney, and
(ii) paying in full the Exercise Price for each such Share purchased and any
other amounts required to be paid pursuant to Section 4.01 hereof.
(c) Simultaneously with the exercise of each Warrant, payment in full
of the Exercise Price shall be made in cash or by certified or official bank
check payable to the order of the Company, delivered to the office or agency
where the Warrant Certificate is being surrendered. No payment or adjustment
shall be made on account of any dividends on the Shares issued upon exercise of
a Warrant.
(d) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Agent Office (other than any
Warrant Agent Office that also is an office of the Warrant Agent), such Warrant
Certificate and payment shall be promptly delivered to the Warrant Agent. The
"Exercise Date" for a Warrant shall be the date when all of the items referred
to in the first sentence of paragraphs (b) and (c) of this Section 2.02 are
received by the Warrant Agent at or prior to 2:00 p.m., New York City time, on a
Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs (b)
and (c) are received after 2:00 p.m., New York City time, on a Business Day, the
exercise of the Warrants to which such item relates will be effective on the
next succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date (as defined in Section 2.01), if all
of the items referred to in the first sentence of paragraphs (b) and (c) are
received by the Warrant Agent at or prior to 5:00 p.m., New York City time, on
such Expiration Date, the exercise of the Warrants to which such items relate
will be effective on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price,
the Warrant Agent shall: (i) cause an amount equal to the Exercise Price to be
paid to the Company by crediting the same to the account designated by the
Company in writing to the Warrant Agent for that purpose; (ii) advise the
Company within one Business Day by telephone of the amount so deposited to the
Company's account and promptly confirm such telephonic advice in writing; and
(iii) as soon as practicable, advise the Company in writing of the number of
Warrants (giving effect to Section 5.01(i) below) exercised in accordance with
the terms and conditions of this Agreement and the Warrant Certificates, the
instructions of each exercising holder of the Warrant Certificates with respect
to delivery of the Shares to which such holder is entitled upon such exercise,
and such other information as the Company shall reasonably request.
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(f) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Shares to which such
holder is entitled, in fully registered form, registered in such name or names
as may be directed by such holder pursuant to the Election to Exercise, as set
forth on the reverse of the Warrant Certificate. The Warrant Agent shall have
no obligation to ascertain the number of Shares to be issued with respect to the
exercised Warrant or Warrants. Such certificate or certificates evidencing the
Shares shall be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record of such
Shares as of the close of business on the Exercise Date. After such exercise of
any Warrant or Warrants, the Company shall also issue or cause to be issued to
or upon the written order of the registered holder of such Warrant Certificate,
a new Warrant Certificate, countersigned by the Warrant Agent pursuant to the
Company's written instruction, evidencing the number of Warrants, if any,
remaining unexercised unless such Warrants shall have expired.
SECTION 2.03. Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall be canceled by it and retired. The Warrant Agent shall
cancel all Warrant Certificates surrendered for exchange, substitution, transfer
or exercise in accordance with the terms of this Agreement. The Warrant Agent
shall destroy canceled Warrant Certificates held by it and deliver a certificate
of destruction to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and pay to the Company within one
Business Day all money received by the Warrant Agent for the purchase of Warrant
Shares through the exercise of such Warrants.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any of the
other provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Shares or the holder
of any other Warrant Certificate, may, in and for its own behalf, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, its right to exercise the Warrant or Warrants evidenced by
its Warrant Certificate as provided in such Warrant Certificate and in this
Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall entitle the
holders thereof to any of the rights of a holder of Shares, including, without
limitation, the right to vote or to receive any dividends or other payments or
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or to share in the
assets of the Company in the event of the liquidation, dissolution or winding up
of the Company's affairs or any other matter, or any rights whatsoever as
stockholders of the Company.
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ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the Shares
upon the exercise of Warrants or to the separation of the Note Warrants and
Notes; provided, however, that the Company shall not be required to pay any tax
or other governmental charge which may be payable in respect of any transfer
involved in the issue of any Warrant Certificates or any certificates for Shares
in a name other than the registered holder of a Warrant Certificate surrendered
upon the exercise of a Warrant. In any such case, the Company shall not be
required to issue or deliver such Warrant Certificate or certificate for Shares
unless or until the person or persons requesting issuance thereof shall have
paid to the Company the amount of such tax or other governmental charge or shall
have established to the satisfaction of the Company that such tax or other
governmental charge has been paid or an exemption is available therefrom.
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Price and Number of Shares Issuable.
The number and kind of Shares purchasable upon the exercise of Warrants and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall hereafter
(i) pay a dividend or make a distribution on its Common Stock in shares of its
capital stock (whether shares of Common Stock or of capital stock of any other
class), (ii) subdivide its outstanding shares of Common Stock or (iii) combine
its outstanding shares of Common Stock into a smaller number of shares, the
number of Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the holder of any Warrant thereafter exercised
shall be entitled to receive the number of Shares which such holder would have
owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this paragraph shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this paragraph, the holder of any Warrant thereafter exercised
shall become entitled to receive shares of two or more classes of capital stock
of the Company, the Board of Directors of the Company (whose determination shall
be conclusive) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock (other than as
set forth in Section 5.01(a) above and other than a change in par value, or from
par value to no par value, or from no par value to par value, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger in
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which the Company is the continuing corporation and which does not result in any
reclassification or change of the then outstanding shares of Common Stock or
other 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 in case of any sale or conveyance to another
corporation of all or substantially all of the assets of the Company, then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company or such a successor or purchasing corporation, as the
case may be, shall forthwith make lawful and adequate provision whereby the
holder of such Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and enter
into a supplemental warrant agreement so providing. Such provisions shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article V. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental warrant
agreement is an affiliate of the formed, surviving or transferee corporation,
that issuer shall join in the supplemental warrant agreement. The above
provisions of this paragraph (b) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
In case of any such reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant Agreement to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of shares of the Common Stock for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Article V. The foregoing provisions of this Section 5.01(b) shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
(c) Issuance of Common Stock, Options or Convertible Securities. For the
purposes of this Warrant Agreement, "Additional Shares of Common Stock" shall
mean all shares of Common Stock issued or deemed to be issued by the Company
after the Effective Date, other than Excluded Shares (as defined below).
In the event the Company shall, at any time or from time to time after the
Effective Date, issue, sell, distribute or otherwise grant in any manner
(including by assumption) shares of Common Stock or any rights to subscribe for
or to purchase, or any warrants or options for the purchase of, Common Stock or
any stock or securities convertible into or exchangeable for Common Stock (any
such rights, warrants or options being herein called "Options" and any such
convertible or exchangeable stock or securities being herein called "Convertible
Securities") or any Convertible Securities (other than upon exercise of any
Option), whether or not such Options or the rights to convert or exchange such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock (as set forth in the instrument relating thereto without
regard to any provision contained therein for a subsequent adjustment
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of such number) issuable upon the exercise and/or conversion of such Options or
Convertible Securities, shall be deemed to be Additional Shares of Common Stock.
For purposes of this Warrant Agreement, the term "Issuance Date" shall mean
(i) with respect to Additional Shares of Common Stock deemed to have been issued
in connection with the issuance of an Option or Convertible Security, the date
such Option or Convertible Security is issued and (ii) in all other cases, the
actual date Additional Shares of Common Stock are issued.
For the purposes of this Warrant Agreement, "Excluded Shares" shall mean:
(i) shares for which the consideration per share as determined pursuant to
paragraph (d) below would be equal to or more than the Current Market Value
determined on the day prior to the Issuance Date; (ii) shares of Common Stock
issuable upon the exercise of Options or conversion of Convertible Securities
existing as of the Effective Date; and (iii) shares of Common Stock
(appropriately adjusted to reflect stock splits, stock dividends,
reorganizations, consolidations and similar changes) issued pursuant to any
stock options granted or obtained after the Effective Date pursuant to any stock
option plan adopted by the Company's Board of Directors for the benefit of
employees of the Company. The issuance of Excluded Shares shall not be an
issuance of Additional Shares of Common Stock, and shall not give rise to a
right to purchase the securities pursuant to paragraph (d) below.
In any such case in which the Additional Shares of Common Stock are deemed
to be issued, no right to purchase securities under Section 5.01(d) below will
accrue upon the subsequent issue of shares of Common Stock upon the exercise
and/or conversion or exchange of such Option or Convertible Security unless such
Option or Convertible Security shall have been amended or modified prior to
exercise or conversion or exchange so as to increase the number of Additional
Shares of Common Stock deemed to have been issued thereunder or decrease the
exercise and/or conversion or exchange price payable thereunder to an amount
less than Current Market Value as of the Issuance Date thereof.
(d) If the price per share at which Common Stock is issued or Common Stock
is issuable upon the exercise of such Options or upon the conversion or exchange
of such Convertible Securities (determined by dividing (i) the aggregate amount,
if any, received or receivable by the Company as consideration for the issuance,
sale, distribution or granting of such Common Stock or Options or any such
Convertible Security, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance of Common Stock
or the exercise of all such Options or upon conversion or exchange of all such
Convertible Securities, plus, in the case of Options to acquire Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable upon the conversion or exchange of all such Convertible Securities, by
(ii) the total maximum number of shares of Common Stock to be issued or issuable
upon the exercise of all such Options or upon the conversion or exchange of all
such Convertible Securities or upon the conversion or exchange of all
Convertible Securities issuable upon the exercise of all Options) shall be less
than the Current Market Value per share of Common Stock (determined pursuant to
Section 5.01(e)) on the record date for the issuance, sale, distribution or
granting of such Options (any such event being herein called a "Distribution")
then, the Company shall offer to sell to each holder of Warrants, at the same
price and on the same terms offered to all other prospective buyers (provided
that the holders of Warrants shall not be required to buy any other securities
in order to buy such Common Stock or Convertible Securities), a portion of such
Common Stock or Convertible Securities that
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is equal to such holder's portion of the Common Stock then outstanding if
immediately prior thereto all the Warrants had been exercised. Each such holder
may elect to buy all or any portion of the Common Stock or Convertible
Securities offered or may decline to purchase any such securities.
(e) Current Market Value. As used herein, the term "Current Market Value"
per share of Common Stock or any other security at any date means, on any date
of determination (a) the average of the daily closing sale prices for each of 15
business days immediately preceding such date (or such shorter number of days
during which such security has been listed or traded), if the security has been
listed on the New York Stock Exchange, the American Stock Exchange or other
national securities exchanges or the NASDAQ National Market for at least 10
business days prior to such date, (b) if such security is not so listed or
traded, the average of the daily closing bid prices for each of the 15 business
days immediately preceding such date (or such shorter number of days during
which such security had been quoted), if the security has been quoted on a
national over-the-counter market for at least 10 business days, and (c)
otherwise, the value of the security most recently determined as of a date
within the six months preceding such day by the Company's Board of Directors.
(f) Consideration Received. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for a consideration
other than cash, the amount of the consideration other than cash received by the
Company in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration; provided, however, that if such Options have an exercise price
equal to or greater than the Current Market Value of the Common Stock on the
date of issuance of such Options, then such Options shall be deemed to have been
issued for consideration equal to such exercise price.
(g) Changes in Options and Convertible Securities. If the exercise price
provided for in any Options referred to in Section 5.01(d) above, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in Section 5.01(d) above, or the rate at
which any Convertible Securities referred to in Section 5.01(d) above are
convertible into or exchangeable for Common Stock shall change at any time to a
price which is less than the Current Market Value thereof as of the Issuance
Date, then the Company shall make the offer to holders of the Warrants as
required by Section 5.01(d) above.
(h) Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than any action described in this Article V, then the number of Shares for which
this Warrant is exercisable shall be adjusted in such manner as may be equitable
in the circumstances. If the Company shall at any time and from time to time
issue or sell (i) any shares of any class of common stock other than Common
Stock, (ii) any evidences of its indebtedness, shares of stock or other
securities which are convertible into or exchangeable for such shares of common
stock, with or without the payment of additional consideration in cash or
property or (iii) any warrants or other rights to subscribe for or purchase any
such shares of common stock or any such evidences, shares of stock or other
securities, then in each such case such issuance shall be deemed to be
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of, or in respect of, Common Stock for purposes of this Article V; provided,
however, that, without limiting the generality of the foregoing, if the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend payable in, or other distribution of,
common stock other than Common Stock, including shares of non-voting common
stock, then the number of Shares for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the aggregate number of shares of such common stock and of Common Stock which a
record holder of the same number of Shares for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event.
(i) Statement of Warrants. Irrespective of any adjustment in the number or
kind of Shares issuable upon the exercise of the Warrants, Warrants theretofore
or thereafter issued shall continue to express the same number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
SECTION 5.02. Fractional Interest. The Company shall not be required to
issue fractional shares of Common Stock 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 shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
shares of Common Stock acquirable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the transfer agent for the Common Stock to
pay an amount in cash calculated by the Company to equal the then Current Market
Value per share (determined pursuant to Section 5.01(e)) multiplied by such
fraction computed to the nearest whole cent. Holders of Warrants, by their
acceptances of the Warrant Certificates, expressly waive any and all rights to
receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
SECTION 5.03. When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.
SECTION 5.04. Challenge to Good Faith Determination. Whenever the Board
of Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Article V, such determination may
be challenged in good faith by holders holding a majority of the outstanding
Warrants (the "Majority Holders"), and any dispute shall be resolved by an
investment banking firm of national standing selected by the Company. The fee
of such investment banking firm shall be paid by the Company, unless such fair
market value as determined by the investment banking firm is more than 95% of
the fair market value determined by the Board of Directors of the Company, in
which case the challenging holders shall be jointly and severally liable for
such fee.
SECTION 5.05. Treasury Stock. The sale or other disposition of any
issued shares of Common Stock owned or held by or for the account of the Company
shall be deemed an issuance thereof and a
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repurchase thereof and designation of such shares as treasury stock shall be
deemed to be a redemption thereof for the purposes of this Agreement.
SECTION 5.06. Notices to Warrant Holders. In connection with any
adjustment pursuant to this Article V, the Company shall (i) promptly after such
adjustment or, if earlier, at least five (5) days prior to the date on which
notice of such adjustment is required to be given, if at all, to The Depository
Trust Company cause to be filed with the Warrant Agent a certificate of an
officer of the Company setting forth the number of shares (or portion thereof)
issuable after such adjustment, upon exercise of a Warrant, which certificate
shall be conclusive evidence of the correctness of the matters set forth
therein, and (ii) promptly after such adjustment cause to be given to each of
the registered holders of the Warrant Certificates at his address appearing on
the Warrant Register written notice of such adjustments by first-class mail,
postage prepaid. The Warrant Agent shall be entitled to conclusively rely on
the above-referenced officer's certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same
from time to time to any holder desiring an inspection thereof during normal
business hours upon reasonable notice. The Warrant Agent shall not at any time
be under any duty or responsibility to any holder to determine whether any facts
exist that may require any adjustment of the number of Shares issuable on
exercise of the Warrants or the Exercise Price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment or the validity or value (or the kind or amount) of
any Shares which may be issuable on exercise of the Warrants. The Warrant Agent
shall not be responsible for any failure of the Company to make any cash payment
or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other common stock or property upon the exercise of any Warrant.
The Company shall, in addition, promptly notify the holders of the Warrants
of any determination of its Board of Directors pursuant to Section 5.01(i) that
any actions affecting its Common Stock will not require an adjustment to the
number of Shares for which a Warrant is exercisable, and shall specify in such
notice the reasons for such determination. In the event that the Majority
holders shall challenge any of the calculations set forth in such notice within
20 days after the Company's delivery thereof, the Company shall retain a firm of
independent certified public accountants or law firm of national standing
selected by the Company to prepare and execute a certificate verifying that no
adjustment is required. The Company shall promptly cause a signed copy of any
certificate prepared pursuant to this Section 5.06 to be delivered to each
holder at his address appearing in the Warrant Register. The Company shall keep
at its office or agency designated pursuant to Section 1.10 copies of all such
certificates and cause the same to be available for inspection at said office
during normal business hours upon reasonable notice by any holder or any
prospective purchaser of a Warrant designated by a holder thereof.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints U.S. Trust
Company of Texas, N.A. as warrant agent (and in all capacities in this
Agreement, the "Warrant Agent") of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
-19-
and in the Warrant Certificates set forth; and U.S. Trust Company of Texas, N.A.
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority specifically granted to and conferred upon it in the Warrant
Certificates and this Agreement and such further powers and authority to act on
behalf of the Company as the Company may hereafter grant to or confer upon it
and it shall accept in writing. All of the terms and provisions with respect to
such powers and authority contained in the Warrant Certificates are subject to
and governed by the terms and provisions hereof.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of which
the Company agrees and to all of which the rights hereunder of the holders from
time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be agreed
upon with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent, each predecessor Warrant Agent, and their
respective directors, officers, affiliates, agents and employees for, and to
hold it and its directors, officers, affiliates, agents and employees harmless
against, any loss, liability or expense of any nature whatsoever (including,
without limitation, fees and expenses of counsel) incurred without gross
negligence or willful misconduct on the part of the Warrant Agent or predecessor
Warrant Agent, arising out of or in connection with its acting as such Warrant
Agent hereunder and its exercise or failure to exercise of its rights and
performance of its obligations hereunder. The obligations of the Company under
this Section 6.02 shall survive the exercise and the expiration of the Warrant
Certificates and the resignation and removal of the Warrant Agent.
(b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.
(c) The Warrant Agent may consult with counsel and any advice or
written opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any interest
in, Warrant Certificates, shares or other obligations of the Company with the
same rights that it or they would have it if were not the Warrant Agent
hereunder and, to the extent permitted by applicable law, it or they may engage
or be interested in any
-20-
financial or other transaction with the Company and may act on, or as
depositary, trustee or agent for, any committee or body of holders of shares or
other obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Agreement shall be deemed to prevent the Warrant
Agent or such Related Parties from acting in any other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for interest
on, and shall not be required to invest, any money at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement (or any term or provision hereof) or the
execution and delivery hereof or in respect of the validity or execution of any
Warrant Certificate (except its authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication thereon)
shall be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Warrant Certificates; provided, however, that the Warrant Agent shall not be
relieved of its duty to authenticate the Warrant Certificates as authorized by
this Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with respect
to any matter contemplated by this Warrant Agreement, it may require:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Warrant
Agreement relating to the proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of the Warrant
Agent, an opinion of counsel for the Company stating that, in the opinion
of such counsel, all such conditions precedent have been complied with.
Each Officers' Certificate or, if requested, an opinion of counsel
with respect to compliance with a condition or covenant provided for in this
Warrant Agreement shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
-21-
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Warrant Certificates specifically set forth and no
implied duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in the Warrant Certificates
or in the case of the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law or otherwise or, except as provided in
Section 7.02 hereof, to make any demand upon the Company. The Warrant Agent
shall not be obligated to perform any duty to the extent prohibited by law.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if in
writing and signed by its chairman of the Board of Directors, its president, its
treasurer, its controller or any vice president or its secretary or any
assistant secretary.
(1) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties hereunder
from any one of the chairman of the Board of Directors, the president, the
treasurer, the controller, any vice president or the secretary of the Company or
any other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or officials
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions with respect to any matter arising in connection
with the Warrant Agent's duties and obligations arising under this Agreement.
Such application by the Warrant Agent for written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such action
shall be taken and the Warrant Agent shall not be liable for any
-22-
action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall be not less
than ten Business Days after the Company receives such application unless the
Company consents to a shorter period), provided that (i) such application
includes a statement to the effect that it is being made pursuant to this
paragraph (n) and that unless objected to prior to such date specified in the
application, the Warrant Agent will not be liable for any such action or
omission to the extent set forth in such application and (ii) prior to taking or
omitting any such action, the Warrant Agent has not received written
instructions objecting to such proposed action or omission.
(o) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice president or
the secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and delivered to
the Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.
SECTION 6.03. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective, provided that
such date shall be at least 30 days after the date on which such notice is given
unless the Company agrees to accept less notice. Upon receiving such notice of
resignation, or in the event the Company shall determine not to continue to act
as its own Warrant Agent, the Company shall promptly appoint a successor Warrant
Agent, qualified as provided in Section 6.03(d) hereof, by written instrument in
duplicate signed on behalf of the Company, one copy of which shall be delivered
to the resigning Warrant Agent and one copy to the successor Warrant Agent. As
provided in Section 6.03(d) hereof, such resignation shall become effective upon
the earlier of (x) the acceptance of the appointment by the successor Warrant
Agent or (y) 30 days after receipt by the Company of notice of such resignation.
The Company may, at any time and for any reason, and shall, upon any event set
forth in the next succeeding sentence, remove the Warrant Agent and appoint a
successor Warrant Agent by written instrument in duplicate, specifying such
removal and the date on which it is intended to become effective, signed on
behalf of the Company, one copy of which shall be delivered to the Warrant Agent
being removed and one copy to the successor Warrant Agent. The Warrant Agent
shall be removed as aforesaid if it shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Warrant Agent or of
its property shall be appointed, or any public officer shall take charge or
control of it or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation. Any removal of the Warrant Agent and any
appointment of a successor Warrant Agent shall become effective upon
-23-
acceptance of appointment by the successor Warrant Agent as provided in Section
6.03(d). Upon effectiveness of the resignation or removal of the Warrant Agent
in accordance with this Section 6.03(b), the Warrant Agent shall have no further
obligation or duties under this Agreement. As soon as practicable after
appointment of the successor Warrant Agent, the Company shall cause written
notice of the change in the Warrant Agent to be given to each of the registered
holders of the Warrants in the manner provided for in Section 7.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the Company
shall fail to appoint a successor Warrant Agent within a period of 30 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the Warrant Agent may apply to a court of competent jurisdiction
for the appointment of a successor to the Warrant Agent. Pending appointment of
a successor to the Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company.
(d) Any successor Warrant Agent, whether appointed by the Company or
by a court, shall be a bank or trust company in good standing, incorporated
under the laws of the United States of America or any State thereof and having,
at the time of its appointment, a combined capital surplus of at least $50
million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Warrant Agent hereunder,
and such predecessor shall thereupon become obligated to (i) transfer and
deliver, and such successor Warrant Agent shall be entitled to receive, all
securities, records or other property on deposit with or held by such
predecessor as Warrant Agent hereunder and (ii) upon payment of the amounts then
due it pursuant to Section 6.02(a) hereof, pay over, and such successor Warrant
Agent shall be entitled to receive, all money deposited with or held by any
predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder may
be merged or converted, or any corporation or bank with which the Warrant Agent
may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.
(f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent or of the
Company.
-24-
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms of the Warrants
may be amended by the Company and the Warrant Agent, without the consent of the
holder of any Warrant Certificate, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained herein or therein or in any other manner which the Company may deem
necessary or desirable and which shall not adversely affect in any material
respect the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may modify this Agreement and the terms
of the Warrants with the consent of holders of not less than a majority in
number of the then outstanding Warrants for the purpose of adding any provision
to or changing in any manner or eliminating any of the provisions of this
Agreement or modifying in any manner the rights of the holders of the
outstanding Warrants; provided, however, that no such modification that
increases the Exercise Price, reduces the period of time during which the
Warrants are exercisable hereunder, otherwise materially and adversely affects
the exercise rights of the holders of the Warrants, reduces the percentage
required for modification, or effects any change to this Section 7.01 may be
made with respect to an outstanding Warrant without the consent of the holder of
such Warrant.
Any modification or amendment made in accordance with this Agreement will
be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions hereof or of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 7.03. Address for Notices to Parties and for Transmission of
Documents. All notices hereunder to the parties hereto shall be deemed to have
been given when sent by certified or registered mail, postage prepaid, or by
telecopy, confirmed by first class mail, postage prepaid, addressed to a party
hereto as follows:
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To the Company:
▇▇▇▇▇▇ Petroleum Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(Telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇)
Attention: President
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Warrant Agent:
U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
SECTION 7.04. Notices to Holders. Notices to holders of Warrants shall
be mailed to such holders at the addresses of such holders as they appear in the
Warrant Register. Any such notice shall be sufficiently given if sent by first-
class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT ISSUED HEREUNDER AND OF THE
RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 7.06. Obtaining of Governmental Approvals. The Company will
from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and Securities Acts filings
under United States Federal and State laws, and the rules and regulations of all
stock exchanges on which the Warrants may be listed, which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Certificates, the exercise of the Warrants or the issuance, sale,
transfer and delivery of the shares issued upon exercise of the Warrants, it
being understood, however, that the only
-26-
contractual registration rights of the holders of the Warrant Certificates are
those set forth in the Registration Rights Agreement dated as of June 3, 1997
(the "Registration Rights Agreement") between the Company and the Initial
Purchaser.
SECTION 7.07. Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person other than the Company, the Warrant Agent and the holders from
time to time of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders from time to time of the Warrant Certificates.
SECTION 7.08. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 7.09. 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 shall together constitute but one and the same instrument.
SECTION 7.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the Warrant Agent Office, for inspection by
the holder of any Warrant Certificate. The Warrant Agent may require such
holder to submit his Warrant Certificate for inspection by it.
SECTION 7.11. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, this Agreement has been duly executed by the Company as
of the day and year first above written.
▇▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board, Chief
Executive Officer and President
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U.S. TRUST COMPANY OF TEXAS, N.A.,
as Warrant Agent
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
-28-
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR WARRANTS IN
CERTIFICATED FORM, THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]/1/
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT ASSET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
(1)REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" ( AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT)(AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO ▇▇▇▇▇▇ PETROLEUM CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR FURNISHES ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE COMPANY AND THE
WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
---------------------------
/1/ This paragraph is to be included only if the Warrant Certificate is in
global form.
-1-
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE WARRANT AGENT AND THE COMPANY SUCH CERTIFICATIONS,
WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
THIS SECURITY IS SUBJECT TO A REGISTRATION RIGHTS AGREEMENT DATED AS OF
JUNE 3, 1997 BETWEEN THE COMPANY AND ▇▇▇▇▇▇▇▇▇ & COMPANY, INC., A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
▇▇▇▇▇▇ PETROLEUM CORPORATION
This Warrant Certificate certifies that [ ], or registered assigns, is
the registered holder of [ ] Warrants (the "Warrants") to purchase shares of
Common Stock, no par value (the "Common Stock"), of ▇▇▇▇▇▇ Petroleum
Corporation, a Louisiana corporation (the "Company"). Each Warrant entitles the
holder to purchase from the Company at any time on or after June 3, 1997 and
until 5:00 p.m., New York City time, on June 1, 2004 (the "Expiration Date"),
0.41524 fully paid and non-assessable shares of Common Stock (as such number may
be adjusted from time to time, the "Shares", which may also include any other
securities or property purchasable upon exercise of a Warrant, such adjustment
and inclusion each as provided in the Warrant Agreement) at the exercise price
(the "Exercise Price") of $1.00 per Share upon surrender of this Warrant
Certificate and payment of the Exercise Price at any office or agency maintained
for that purpose by the Company (the "Warrant Agent Office"), subject to the
conditions set forth herein and in the Warrant Agreement.
The Exercise Price shall be payable in cash or by certified or official
bank check in the lawful currency of the United States of America which as of
the time of payment is legal tender for payment of public or private debts. The
Company has initially designated the office of United States Trust Company, an
affiliate of the Warrant Agent, at its agent's office in the Borough of
Manhattan, the City of New York,
-2-
as the initial Warrant Agent Office. The number of Shares issuable upon exercise
of the Warrants ("Exercise Rate") is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.
Any Warrants not exercised on or prior to 5:00 p.m., New York City time, on
June 1, 2004 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse hereof,
which provisions shall for all purposes have the same effect as though fully set
forth at this place. Capitalized terms used in this Warrant Certificate but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement.
This Warrant Certificate shall not be valid unless authenticated by the
Warrant Agent, as such term is used in the Warrant Agreement.
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
WITNESS the corporate seal of the Company and the signatures of its duly
authorized officers.
Dated: _________________, 19__
▇▇▇▇▇▇ PETROLEUM CORPORATION
By:____________________________________
Name:____________________________
Title:___________________________
Attest:
By:_______________________________
Name:________________________
Title:_______________________
Certificate of Authentication:
This is one of the Warrants
referred to in the within-
mentioned Warrant Agreement:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Warrant Agent
By:_____________________________
Authorized Signatory
-3-
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
▇▇▇▇▇▇ PETROLEUM CORPORATION
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after June 3, 1997, and until 5:00 p.m., New York City time, on
June 1, 2004, 0.41524 Shares, subject to adjustment as set forth in the Warrant
Agreement. The Warrants are issued pursuant to a Warrant Agreement dated as of
June 3, 1997 (the "Warrant Agreement"), duly executed and delivered by the
Company for the benefit of the holders from time to time of the Warrant
Certificates, which Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities thereunder
of the Warrant Agent, the Company and the holders (the words "holders" or
holder" meaning the registered holders or registered holder) of the Warrant
Certificates. Warrants may be exercised by (i) surrendering at any Warrant
Agent Office this Warrant Certificate with the form of Election to Exercise set
forth hereon duly completed and executed and (ii) paying in full the Warrant
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 2:00 p.m., New York
City time, on a Business Day, the exercise of the Warrant to which such items
relate will be effective on such Business Day. If any items referred to in the
last sentence of the preceding paragraph are received after 2:00 p.m., New York
City time, on a Business Day, the exercise of the Warrants to which such item
relates will be deemed to be effective on the next succeeding Business Day.
Notwithstanding the foregoing, in the case of an exercise of Warrants on the
Expiration Date, if all of the items referred to in the last sentence of the
preceding paragraph are received by the Warrant Agent at or prior to 5:00 p.m.,
New York City time, on such Expiration Date, the exercise of the Warrants to
which such items relate will be effective on the Expiration Date.
Subject to the terms of the Warrant Agreement, as soon as practicable after
the exercise of any Warrant or Warrants, the Company shall issue or cause to be
issued to or upon the written order of the registered holder of this Warrant
Certificate, a certificate or certificates evidencing the Share or Shares to
which such holder is entitled, in fully registered form, registered in such name
or names as may be directed by such holder pursuant to the Election to Exercise,
as set forth on the reverse of this Warrant Certificate. Such certificate or
certificates evidencing the Share or Shares shall be deemed to have been issued
and any persons who are designated to be named therein shall be deemed to have
become the holder of record of such Share or Shares as of the close of business
on the date upon which the exercise of this Warrant was deemed to be effective
as provided in the preceding paragraph.
The Company will not be required to issue fractional shares of Common Stock
upon exercise of the Warrants or distribute Share certificates that evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, there shall be paid to the registered Holder of this Warrant Certificate
-4-
at the time such Warrant Certificate is exercised an amount in cash equal to the
same fraction of the current market price per share of Common Stock as
determined in accordance with the Warrant Agreement.
Warrant Certificates, when surrendered at any Warrant Agent Office by the
holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged for a new Warrant Certificate or new Warrant
Certificates evidencing in the aggregate a like number of Warrants, in the
manner and subject to the limitations provided in the Warrant Agreement, without
charge except for any tax or other governmental charge imposed in connection
therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the purpose of
any exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
The term "Business Day" shall mean any day on which (i) banks in New York
City or the City of Houston, Texas, (ii) the principal national securities
exchange or market, if any, on which the Common Stock is listed or admitted to
trading and (iii) the principal national securities exchange or market, if any,
on which the Warrants are listed or admitted to trading are open for business.
-5-
ELECTION TO EXERCISE
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise _______________ of
the Warrants represented by this Warrant Certificate and purchase the whole
number of Shares issuable upon the exercise of such Warrants and herewith
tenders payment for such Shares in the amount of $_____in cash or by certified
or official bank check, in accordance with the terms hereof. The undersigned
requests that a certificate representing such Shares be registered in the name
of _________________, whose address is _____________, and that such certificate
be delivered to ____________, whose address is ____________________. Any cash
payments to be paid in lieu of a fractional Share should be made to __________,
whose address is _____________________, and the check representing payment
thereof should be delivered to _______________, whose address is
_______________________.
Name of holder of
Warrant Certificate: _________________________________
(Please Print)
Tax Identification or
Social Security Number: ______________________________
Signature: ___________________________________________
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement
or any change whatever.
Dated ______________ , ___
-6-
ASSIGNMENT
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 _________________ , ____
Signature:_________________________________
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement
or any change whatever.
-7-
SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS/2/
The following exchanges of a part of this Global Warrant for Definitive Warrants
have been made:
Number of
Warrants of
Amount of Amount of this Global Signature of
decrease in increase in Warrant authorized
Number of Number of following signatory of
Date of Warrants of this Warrants of this such decrease Warrant Agent
Exchange Global Warrant Global Warrant (or increase) or Depositary
--------------------------------------------------------------------------------
---------------
/2/ This is to be included only if the Warrant Certificate is in global form.
-8-
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of ▇▇▇▇▇▇ Petroleum
Corporation
This Certificate relates to _____ Warrants held in* _____ book-entry or
*_____ certificated form by _________________ (the "Transferor").
The Transferor:*
[ ] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above) or
[ ] has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because[*]:
[ ] Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 1.08(a)(ii)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement).
[ ] Such Warrant is being transferred to a qualified institutional buyer
(as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
[ ] Such Warrant is being transferred in accordance with Rule 144 under
the Act.
[ ] Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
[INSERT NAME OF TRANSFEROR]
By: _______________________________________________
Date: _________________
*Check applicable box.
EXHIBIT C
Transferee Letter of Representation
▇▇▇▇▇▇ Petroleum Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of warrants ("Warrants") to
purchase Common Stock, no par value (the "Common Stock"; together with the
Warrants, the "Securities"), of ▇▇▇▇▇▇ Petroleum Corporation (the "Company") we
confirm that:
1. We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities
prior to the date which is two years after the later of the date of original
issue and the last date on which the Company or any affiliate of the Company
was the owner of such Securities, or any predecessor thereto (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) so long as the Securities are eligible for resale pursuant to Rule
144A, under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of subparagraph (a)(l), (2), (3) or (7) of Rule 501 under the
Securities Act that is purchasing for his own account or for the account of
such an institutional "accredited investor," or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or
accounts be at all times within our or their control and to compliance with
any applicable state securities laws. The foregoing restrictions on resale
will not apply subsequent to the Resale Restriction Termination Date. If any
resale or other transfer of the Securities is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the
form of this letter to the warrant agent under the Warrant Agreement pursuant
to which the Securities were issued (the "Warrant Agent") which shall provide,
among other things, that the transferee is an institutional "accredited
investor" within the meaning of subparagraph (a)(l), (2), (3) or (7) of Rule
501 under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities
Act. The Warrant Agent and the Company reserve the right prior to any offer,
sale or other transfer prior to the Resale Restriction Termination Date of the
Securities pursuant to
clause (e) or (f) above to require the delivery of a written opinion of
counsel, certifications, and or other information satisfactory to the Company
and the Warrant Agent.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of our investment in the Securities, and we and any
accounts for which we are acting are each able to bear the economic risk of
our or its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. You, the Warrant Agent and your respective counsel are entitled to
rely upon this letter and you are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
________________________________
(Name of Purchaser)
By: ____________________________
Date:___________________________
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name: _____________________________
Address: __________________________
Taxpayer ID Number: _______________
C-2
