WARRANT AGREEMENT
Dated as of May 20, 1997
Of
XCL LTD.
Warrants to Purchase Shares of Common Stock,
Par Value $0.01 Per Share
TABLE OF CONTENTS
Page
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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 Note 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 12
SECTION 2.03. Cancellation of Warrant Certificates 13
ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANTS 14
SECTION 3.01. Enforcement of Rights 14
ARTICLE IV CERTAIN COVENANTS OF THE COMPANY 14
SECTION 4.01. Payment of Taxes 14
SECTION 4.02 Notice of Expiration Date 14
ARTICLE V ADJUSTMENTS 15
SECTION 5.01. Adjustment of Exercise Price and
Number of Shares Issuable 15
SECTION 5.02. Fractional Interest 22
SECTION 5.03. When Adjustment Not Required 22
SECTION 5.04. Challenge to Good Faith
Determination 22
SECTION 5.05. Treasury Stock 23
SECTION 5.06. Notices to Warrant Holders 23
ARTICLE VI CONCERNING THE WARRANT AGENT 24
SECTION 6.01. Warrant Agent 24
SECTION 6.02. Conditions of Warrant Agent's
Obligations 24
SECTION 6.03. Resignation and Appointment of
Successor 27
ARTICLE VII
MISCELLANEOUS 29
SECTION 7.01. Amendment 29
SECTION 7.02. Notices and Demands to the Company
and Warrant Agent 29
SECTION 7.03. Address for Notices to the Company
and for Transmission of Documents 29
SECTION 7.04. Notices to Holders 30
SECTION 7.05. APPLICABLE LAW 30
SECTION 7.06. Obtaining of Governmental Approvals 30
SECTION 7.07. Persons Having Rights Under
Agreement 30
SECTION 7.08. Headings 30
SECTION 7.09. Counterparts 30
SECTION 7.10. Inspection of Agreement 31
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
<PAGE.
INDEX OF DEFINED TERMS
Defined Term Section
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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
Warrant Agent Office 1.10
Warrant Certificates Recitals
Warrant Register 1.07
Warrants Recitals
WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement"), dated as of May 20,
1997 is executed and delivered by XCL Ltd., a Delaware
corporation (together with any successor thereto, the "Company"),
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 May 13, 1997 (the "Purchase Agreement") with Jefferies &
Company, Inc. (the "Initial Purchaser") in which the Company has
agreed, among other things, to sell to the Initial Purchaser (A)
75,000 units (the "Units") consisting in the aggregate of (i)
$75,000,000 aggregate principal amount of 13.50% Senior Secured
Notes due May 1, 2004 (the "Notes") of the Company to be issued
under an indenture dated as of May 20, 1997 (the "Indenture"),
between the Company and Fleet National Bank, as trustee (the
"Trustee"), and (ii) 75,000 warrants to purchase an aggregate of
96,000,000 shares of common stock, $0.01 par value per share (the
"Common Stock"), of the Company (the "Note Warrants") and (B)
15,006 warrants to purchase an additional 19,207,680 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 on the Separability
Date (as hereinafter defined); and
WHEREAS, the Company initially shall act as its own warrant
agent (together with any successor warrant agent, the "Warrant
Agent") in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, and 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) 1,280 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 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 countersigned 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).
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 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 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 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 Note Warrants and Notes.
The Notes and Note Warrants will not be separately transferable
until the date (the "Separability Date") which is the earlier of
(i) 90 days from the Issue Date (as defined in Section
1.08(a)(ii)(y) hereof) and (ii) such date as the Initial
Purchaser may, in its discretion, deem appropriate.
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 Company 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 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 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 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
(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 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
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 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), (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
(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 XCL LTD. (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 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 MAY 20, 1997 BETWEEN THE COMPANY AND JEFFERIES &
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
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).
(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 cancelled, 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 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
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 its principal
executive offices in Lafayette, Louisiana (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 May 20, 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 Lafayette, Louisiana, (ii) the
principal national securities exchange or market 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.
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 later of May 20, 1998, or such date on
which the Company has reserved or has available a sufficient
number of shares of its Common Stock to permit exercise of all
outstanding Warrants (the "Exercisability Date") and on or prior
to the Expiration Date 1,280 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 $0.2063 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 immediately 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(o) 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.
(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.
(g) If during the first year after issuance of the
Units, the Current Market Price of the Common Stock fails to
exceed the Exercise Price for at least 20 trading days within any
30 consecutive trading days, then the Exercise Price shall be
reduced to 75% of the prevailing Exercise Price, effective as of
the first anniversary of the Issue Date. For purposes of this
adjustment provision, the term "Issue Date" means the date of
original issuance of the Units and the term "Current Market
Price" of the Common Stock for any day means the reported closing
bid price, regular way, on such day, as reported on the AMEX, or,
if the Common Stock is not listed or admitted to trading on the
AMEX on such day, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading, if
the Common Stock is listed on a national securities exchange, or
the National Market Tier of the Nasdaq Stock Market ("Nasdaq
NMS") or, if the Common Stock is not quoted or admitted to
trading on such quotations system, on the principal quotation
system on which the Common Stock may be listed or admitted to
trading or quoted or, if not listed or admitted to trading or
quoted on any national securities exchange or quotation system,
the average of the closing bid and asked prices of the Common
Stock in the over-the-counter market on the day in question as
reported by the National Quotation Bureau Incorporated, or
similar generally accepted reporting service, or, if not so
available in such manner, as furnished by any AMEX member firm
selected from time to time by the Board of Directors of the
Company for that purpose or, if not so available in such manner,
as otherwise determined in good faith by the Board of Directors
of the Company, which determination shall be conclusive.
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 properly surrendered for
exchange, substitution, transfer or exercise. 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 concurrently pay to the Company 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.
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 on the Separability
Date; 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.
SECTION 4.02 Notice of Expiration Date. The Company
will give notice of the Expiration Date to all holders of the
then outstanding Warrants, not less than 90 nor more than 120
days prior to the Expiration Date.
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 each Warrant 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 (A) 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), (B) subdivide its outstanding shares of
Common Stock or (C) combine its outstanding shares of Common
Stock into a smaller number of shares, the (a) 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, and (b) the Exercise
Price shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of Shares purchasable upon
the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number
of Shares purchasable immediately thereafter. 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 paragraph
(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 or other entity (other than
a merger in 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 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 or other entity 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 or other entity, 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 or other entity,
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 or other entity (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 each
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 dispositions
of assets.
(c) Issuance of Options or Convertible Securities.
In the event the Company shall, at any time or from time to
time after the date hereof, issue, sell, distribute or
otherwise grant in any manner (including by assumption) to
all holders of the Common Stock 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, and
the price per share at which 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 Options or any such
Convertible Security, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company
upon 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 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 price per
share of Common Stock (determined pursuant to Section
5.01(g)) on the record date for the issuance, sale,
distribution or granting of such Options (any such event
being herein called a "Distribution") then, effective upon
such Distribution, the Exercise Price shall be reduced to
the price (calculated to the nearest 1/1,000 of one cent)
determined by multiplying the Exercise Price in effect
immediately prior to such Distribution by a fraction, the
numerator of which shall be the sum of (i) the number of
shares of Common Stock outstanding (exclusive of any
treasury shares) immediately prior to such Distribution
multiplied by the current market price per share of Common
Stock (determined pursuant to Section 5.01(g)) on the date
of such Distribution plus (ii) the consideration, if any,
received by the Company upon such Distribution, and the
denominator of which shall be the product of (A) the total
number of shares of Common Stock outstanding (exclusive of
any treasury shares) immediately after such Distribution
multiplied by (B) the current market price per share of
Common Stock (determined pursuant to Section 5.01(g)) on the
record date for such Distribution. For purposes of the
foregoing, the total maximum number of shares of Common
Stock issuable upon exercise of all such Options or upon the
conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of the total maximum amount
of the Convertible Securities issuable upon the exercise of
all such Options shall be deemed to have been issued as of
the date of such Distribution and thereafter shall be deemed
to be outstanding and the Company shall be deemed to have
received as consideration therefor such price per share,
determined as provided above. Except as provided in
paragraphs (j) and (k) below, no additional adjustment of
the Exercise Price shall be made upon the actual exercise of
such Options or upon conversion or exchange of the
Convertible Securities or upon the conversion or exchange of
the Convertible Securities issuable upon the exercise of
such Options. Notwithstanding anything in this Article V to
the contrary, neither the payment of dividends on any shares
of Amended Series A Preferred Stock (as defined in Section
5.01(q)) in additional shares of Amended Series A Preferred
Stock, nor the issuance of shares of Common Stock on
conversion of the Amended Series A Preferred Stock, nor the
issuance of shares of Common Stock in payment of any
dividends due on any shares of Preferred Stock of the
Company outstanding on the Issue Date, nor on redemption of
any such shares, nor in payment of any interest due under
the Company's Secured Subordinated Notes, nor upon exercise
of any options granted to management pursuant to an employee
benefit plan approved by stockholders of the Company, nor
upon the exercise of any outstanding Warrants (including
Warrants issued in the Concurrent Equity Offering (as
defined below)), shall require any adjustment to either the
Exercise Price of the Warrants or the number of shares
issuable upon exercise of the Warrants.
(d) Dividends and Distributions. In the event the
Company shall, at any time or from time to time after the
date hereof, distribute to all the holders of Common Stock
any dividends or other distribution of cash, evidences of
its indebtedness, other securities or other properties or
assets (in each case other than (i) dividends payable in
Common Stock, Options or Convertible Securities and (ii) any
cash dividend from current or retained earnings), or any
options, warrants or other rights to subscribe for or
purchase any of the foregoing, then (A) the Exercise Price
shall be decreased to a price determined by multiplying the
Exercise Price then in effect by a fraction, the numerator
of which shall be the current market price per share of
Common Stock (determined pursuant to Section 5.01(g)) on the
record date for such distribution less the sum of (X) the
cash portion, if any, of such distribution per share of
Common Stock outstanding (exclusive of any treasury shares)
on the record date for such distribution plus (Y) the then
fair market value (as determined in good faith by the Board
of Directors of the Company) per share of Common Stock
outstanding (exclusive of any treasury shares) on the record
date for such distribution of that portion, if any, of such
distribution consisting of evidences of indebtedness, other
securities, properties, assets (other than cash), options,
warrants or subscription or purchase rights, and the
denominator of which shall be such current market price per
share of Common Stock and (B) the number of Shares
purchasable upon the exercise of each Warrant shall be
increased to a number determined by multiplying the number
of shares of Common Stock so purchasable immediately prior
to the record date for such distribution by a fraction, the
numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (A)
of this sentence and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment.
The adjustments required by this paragraph (d) shall be made
whenever any such distribution occurs retroactive to the
record date for the determination of stockholders entitled
to receive such distribution.
(e) Self-Tenders. In case of the consummation of a
tender or exchange offer (other than an odd-lot tender
offer) made by the Company or any subsidiary of the Company
for all or any portion of the Common Stock to the extent
that the cash and value of any other consideration included
in such payment per share of Common Stock exceeds the first
reported sales price per share of Common Stock on the
trading day next succeeding the last time tenders or
exchanges may be made pursuant to the tender or exchange
offer (the "Expiration Time"), the Exercise Price shall be
reduced so that the same shall equal the price determined by
multiplying the Exercise Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the
Expiration Time multiplied by the first reported sales price
of the Common Stock on the trading day next succeeding the
Expiration Time, and the denominator shall be the sum of (A)
the fair market value (determined by the Board of Directors
of the Company, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (B) the product
of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the first
reported sales price of the Common Stock on the trading day
next succeeding the Expiration Time, such reduction to
become effective immediately prior to the opening of
business on the day following the Expiration Time.
(f) Exercise Price Reset. The Exercise Price, but
not the number of Shares purchasable upon exercise of each
Warrant, shall be reset under the circumstances and in the
manner provided in Section 2.02(g) as a one time adjustment,
and, after any such adjustment, the provisions of this
Article V shall apply in respect of any other subsequent
adjustments to the Exercise Price, as so reset, and to the
number and kind of Shares purchasable upon exercise of the
Warrants.
(g) Current Market Price. Except as provided in
Section 2.02(g), for the purpose of any computation of
current market price, the current market price per share of
Common Stock at any date shall be (x) for purposes of
Section 5.02, the closing price on the trading day
immediately prior to the exercise of the applicable Warrant
and (y) in all other cases, the average of the daily closing
prices for the shorter of (i) the 20 consecutive trading
days ending on the last full trading day on the exchange or
market specified in the second succeeding sentence prior to
the Time of Determination (as defined below) and (ii) the
period commencing on the date next succeeding the first
public announcement of the issuance, sale, distribution or
granting in question through such last full trading day
prior to the Time of Determination. The term "Time of
Determination" as used herein shall be the time and date of
the earlier to occur of (A) the date as of which the current
market price is to be computed and (B) the last full trading
day on such exchange or market before the commencement of
"ex-dividend" trading in the Common Stock relating to the
event giving rise to the adjustment required by paragraph
(a), (b), (c) or (d). The closing price for any day shall
be the last reported sale price regular way or, in case no
such reported sale takes place on such day, the average of
the closing bid and asked prices regular way for such day,
in each case (1) on the principal national securities
exchange on which the shares of Common Stock are listed or
to which such shares are admitted to trading or (2) if the
Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market
as reported by the Nasdaq NMS or any comparable system or
(3) if the Common Stock is not listed on the Nasdaq NMS or a
comparable system, as furnished by two members of the
American Stock Exchange, Inc. selected from time to time in
good faith by the Board of Directors of the Company for that
purpose. In the absence of all of the foregoing, or if for
any other reason the current market price per share cannot
be determined pursuant to the foregoing provisions of this
paragraph (g), the current market price per share shall be
the fair market value thereof as determined in good faith by
the Board of Directors of the Company.
(h) Certain Distributions. If the Company shall
pay a dividend or make any other distribution payable in
Options or Convertible Securities, then, for purposes of
paragraph (c) above, such Options or Convertible Securities
shall be deemed to have been issued or sold without
consideration.
(i) 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 price 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.
(j) Deferral of Certain Adjustments. No adjustment
to the Exercise Price (including the related adjustment to
the number of Shares purchasable upon the exercise of each
Warrant) shall be required hereunder unless such adjustment,
together with other adjustments carried forward as provided
below, would result in an increase or decrease of at least
one percent (1%) of the Exercise Price; provided, however,
that any adjustments which by reason of this paragraph (j)
are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. No
adjustment need be made for a change in the par value of the
Common Stock. All calculations under this Section and
Section 2.02(g) shall be made to the nearest 1/1,000 of one
cent or to the nearest l/1,000th of a Share, as the case may
be.
(k) Changes in Options and Convertible Securities.
If the exercise price provided for in any Options referred
to in paragraph (c) above, the additional consideration, if
any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph (c) above,
or the rate at which any Convertible Securities referred to
in paragraph (c) above are convertible into or exchangeable
for Common Stock shall change at any time (other than under
or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment
pursuant to this Article V), the Exercise Price then in
effect and the number of Shares purchasable upon the
exercise of each Warrant shall forthwith be readjusted
(effective only with respect to any exercise of any Warrant
after such readjustment) to the Exercise Price and number of
Shares so purchasable that would then be in effect had the
adjustment made upon the issuance, sale, distribution or
granting of such Options or Convertible Securities been made
based upon such changed purchase price, additional
consideration or conversion rate, as the case may be, but
only with respect to such Options and Convertible Securities
as then remain outstanding.
(l) Expiration of Options and Convertible
Securities. If, at any time after any adjustment to the
number of Shares purchasable upon the exercise of each
Warrant shall have been made pursuant to paragraph (c) or
(k) above or this paragraph (1), any Options or Convertible
Securities shall have expired unexercised, the number of
such Shares so purchasable shall, upon such Expiration, be
readjusted and shall thereafter be such as they would have
been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (i)
the only shares of Common Stock deemed to have been issued
in connection with such Options or Convertible Securities
were the shares of Common Stock, if any, actually issued or
sold upon the exercise of such Options or Convertible
Securities and (ii) such shares of Common Stock, if any,
were issued or sold for the consideration actually received
by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for
the issuance, sale, distribution or granting of all such
Options or Convertible Securities, whether or not exercised;
provided, however, that no such readjustment shall have the
effect of decreasing the number of such shares so
purchasable by an amount (calculated by adjusting such
decrease to account for all other adjustments made pursuant
to this Article V following the date of the original
adjustment referred to above) in excess of the amount of the
adjustment initially made in respect of the issuance, sale,
distribution or granting of such Options or Convertible
Securities.
(m) Other Adjustments. In the event that at any
time, as a result of an adjustment made pursuant to this
Article V, holders of Warrants shall become entitled to
receive any securities of the Company other than shares of
Common Stock, including shares of Amended Series A Preferred
Stock as provided in paragraph (q) below, thereafter the
number of such other securities so receivable upon exercise
of each Warrant and the Exercise Price applicable to such
exercise shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Shares of Common Stock
contained in this Article V.
(n) 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 outstanding shares of Common Stock,
other than any action described in Section 2.02 (g), this
Article V or the Concurrent Equity Offering (as such term is
defined in the Offering Memorandum relating to the Units),
then the number of Shares for which each 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 referred to in (ii) above, then in
each such case such issuance shall be deemed to be 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 each 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 each Warrant is exercisable immediately
prior to the occurrence of such event would own or be
entitled to receive after the happening of such event.
(o) Statement of Warrant Certificates.
Irrespective of any adjustment in the number or kind of
Shares issuable upon the exercise of each Warrant or the
Exercise Price, Warrant Certificates theretofore or
thereafter issued shall continue to express the same number
and kind of Shares and Exercise Price as are stated in the
Warrant Certificates initially issuable pursuant to this
Agreement.
(p) Increased Shares or Reduced Exercise Price.
From time to time, the Company may, for a period of not less
than 20 days, in its discretion, increase the number of
Shares purchasable upon the exercise of each Warrant,
without making any adjustment to the Exercise Price, or
reduce the Exercise Price, without making any adjustment to
the number of Shares purchasable upon the exercise of each
Warrant.
(q) Exercise for Preferred Stock. In the event
that the Exercisability Date does not occur by May 20, 1998,
then each outstanding Warrant shall automatically, with no
further action by either the Company or the holder, be
converted (the "Conversion") into a Warrant solely to
purchase one share of Amended Series A, Cumulative
Convertible Preferred Stock, par value $1.00 per share, of
the Company (the "Amended Series A Preferred Stock") at an
Exercise Price of $34.00 per share, subject to adjustment as
provided in this Article V. The Conversion shall become
effective as of 5:00 p.m. New York City time on May 20,
1998, unless by such time on such date all of the
outstanding Warrants may be exercisable into shares of
Common Stock as provided herein. Prior to such time and
date and the Conversion, the Warrant holder shall not be
entitled to, or have any right to acquire, any shares of
Amended Series A Preferred Stock upon exercise of the
Warrant, or be entitled to exercise any rights, privileges
or preferences accorded the holders of Amended Series A
Preferred Stock. In the event all the Outstanding Warrants
are fully exercisable for shares of Common Stock by
5:00 p.m. New York City time on May 20, 1998, the Warrants
shall not be subject to Conversion as provided herein.
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, the Company shall either
(i) pay an amount in cash calculated by the Company to equal the
then current market price per share (determined pursuant to
Section 5.01(g)) multiplied by such fraction computed to the
nearest whole cent or (ii) aggregate all such fractional shares
into a whole number of shares and sell such aggregated fractional
shares on behalf of the holders entitled thereto in a public or
private sale and distribute the net cash proceeds from the sale
thereof to such holders pro rata. While the Company will
endeavor to use its best efforts to secure the best available
sales price for such aggregated fractional shares, such price
shall not necessarily be the highest price obtainable for such
shares. 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 or
scrip 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, except for a voluntary tender or exchange offer made
by the Company or any subsidiary of the Company subject to
Section 13(e) of the Exchange Act, a repurchase thereof and
designation of such shares as treasury stock shall not 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 of the Exercise Price or in connection with
the Conversion of the Warrants pursuant to this Article V, the
Company shall (i) promptly after such adjustment or Conversion
or, if earlier, at least five (5) days prior to the date on which
notice of such adjustment or Conversion is required to be given,
if at all, to The Depository Trust Company cause to be filed with
the Warrant Agent a certificate (A) in the case of any such
adjustment, of a firm of independent public accountants of
national standing selected by the Board of Directors of the
Company (who may be the regular auditors of the Company) setting
forth the Exercise Price after such adjustment and setting forth
in reasonable detail the method of calculation and the facts upon
which such calculations are based and setting forth the number of
Shares (or portion thereof) issuable after such adjustment in the
Exercise Price, upon exercise of a Warrant and payment of the
adjusted Exercise Price, or (B) in the case of the Conversion of
the Warrants, an Officers' Certificate stating that the
Conversion has become effective, which certificates shall be
conclusive evidence of the correctness of the matters set forth
therein, and (ii) promptly after such adjustment or Conversion
cause to be given to each of the holders of the Warrant
Certificates notice of such adjustment or Conversion. The
Warrant Agent shall be entitled to conclusively rely on the above-
referenced certificates 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 any Warrant 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 any Warrant or
whether or not the Conversion has taken place. 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 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 Warrant Certificates of any determination of its Board of
Directors pursuant to Section 5.01(n) that any actions affecting
its Common Stock generally will not require an adjustment to the
Exercise Price or 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 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. The Company shall keep at the Warrant Agent Office
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. Initially, the Company
shall act as its own Warrant Agent upon the terms and subject to
the conditions herein and in the Warrant Certificates set forth,
it being understood that Sections 6.02(a) and (n) and 7.01 hereof
and the provisions hereof regarding delivery of Officers'
Certificates or notices of the Company to the Warrant Agent or
vice versa shall not apply to the Company when acting as its own
Warrant Agent. At no time when the Company may be acting as its
own Warrant Agent shall any of its obligations to the holders of
the Warrant Certificates be in any respect reduced as a result
thereof. 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 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;
(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
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 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.
(l) 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 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 10 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 acceptance of appointment by the successor Warrant
Agent as provided in Section 6.03(d). 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.
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 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 (except pursuant to Section 5.01
(q)), 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 the Company and for
Transmission of Documents. All notices hereunder to the Company
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 the Company as
follows:
XCL Ltd.
110 Rue Jean Lafitte
Lafayette, Louisiana 70508
(Telecopy no. 318/237-3316)
Attention: General Counsel
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.
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 contractual registration
rights of the holders of the Warrant Certificates are those set
forth in the Registration Rights Agreement dated as of May 20,
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.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the Company as of the day and year first above written.
XCL LTD.
By:______________________________
David A. Melman,
Executive Vice President,
General Counsel and Secretary
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.] [FN] 1
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<F1> This paragraph is to be included only if the Warrant
Certificate is in global form.
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)(l), (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
XCL LTD. (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
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 MAY 20, 1997 BETWEEN THE COMPANY AND JEFFERIES &
COMPANY, INC., A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
XCL LTD.
This Warrant Certificate certifies that [ ], or
registered assigns, is the registered holder of [ ] Warrants
(the "Warrants") to purchase shares of Common Stock, par value
$0.01 per share (the "Common Stock"), of XCL Ltd., a Delaware
corporation (the "Company"). Each Warrant entitles the holder to
purchase from the Company at any time on or after the later of
May 20, 1998 or such date on which the Company has reserved or
has available a sufficient number of shares of its Common Stock
to permit exercise of all outstanding Warrants and until 5:00
p.m., New York City time, on May 20, 2004 (the "Expiration
Date"), 1,280 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 $0.2063 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 its principal executive offices in
Lafayette, Louisiana, 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 May 20, 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. Initially, the Company shall act as its own
Warrant Agent.
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__
XCL LTD.
By:_____________________
Name:_____________________
Title:_____________________
Attest:
By:_______________________________
Name:______________________
Title:_______________________
Certificate of Authentication:
This is one of the Warrants
referred to in the within-
mentioned Warrant Agreement:
XCL LTD.,
as Warrant Agent
By:_____________________________
Authorized Signatory
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
XCL LTD.
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 the later of May
20, 1998, or such date on which the Company has reserved or has
available a sufficient number of shares of its Common Stock to
permit exercise of all outstanding Warrants and until 5:00 p.m.,
New York City time, on May 20, 2004, 1,280 Shares, subject to
adjustment as set forth in the Warrant Agreement. The Warrants
are issued pursuant to a Warrant Agreement dated as of May 20,
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 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 Orleans, (ii) the principal national securities
exchange or market 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.
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 ______________ , ___
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.
SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS <FN 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
- -------- ---------------- ---------------- ------------- -------------
__________________
<F2> This is to be included only if the Warrant Certificate is
in global form.
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of XCL
Ltd.
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
XCL Ltd.
110 Rue Jean Lafitte
Lafayette, Louisiana 70508
Ladies and Gentlemen:
In connection with our proposed purchase of warrants
("Warrants") to purchase Common Stock, par value $0.01 per share
(the "Common Stock"; together with the Warrants, the
"Securities"), of XCL Ltd. (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: ________________