EXHIBIT 4.6
[FORM OF SERIES A WARRANT]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THEY HAVE
BEEN ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF IN VIOLATION OF ANY
APPLICABLE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL,
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
SERIES A WARRANT
No. 1 January ___, 1999
TO PURCHASE [10,500,000] SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF EEX CORPORATION
1. Definitions. Unless the context otherwise required, when used herein the
following terms shall have the meaning indicated.
"Affiliate" means with respect to any Person, any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person. For purposes of this definition,
the term "control" (and correlative terms "controlling," "controlled by"
and "under common control with") means possession of the power, whether by
contract, equity ownership or otherwise, to direct the policies or
management of a Person.
"Beneficially Own" or "Beneficial Ownership" is defined in Rules 13d-3 and
13d-5 of the Exchange Act, but without taking into account any contractual
restrictions or limitations on voting or other rights.
"Board" means the Board of Directors of the Company.
"Business Combination" means (i) any consolidation, merger, share exchange
or similar business combination transaction involving the Company with any
Person or (ii) the sale, assignment conveyance, transfer, lease or other
disposition by the Company of all or substantially all of its assets.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in Houston,
Texas or New York City, New York generally are authorized or required by
law or other governmental actions to close.
"Capital Stock" means (i) with respect to any Person that is a corporation
or company, any and all shares, interests, participations or other
equivalents (however designated) of capital or capital stock of such Person
and (ii) with respect to any Person that is not a corporation or company,
any and all partnership or other equity interests of such Person.
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"Change of Control" shall mean any event constituting (a) the consummation
of any Business Combination except where (i) the shareholders of the
Company immediately prior to such Business Combination own (in
substantially the same proportion relative to each other as such
shareholders owned the Common Stock immediately prior to such consummation)
(x) forty percent (40%) or more of the Voting Stock of the surviving entity
on both a Modified Non Diluted Basis and a Modified Fully Diluted Basis
immediately after such Business Combination, and (y) forty percent (40%) or
more of the outstanding common stock of the surviving entity on both a
Modified Non Diluted Basis and a Modified Fully Diluted Basis immediately
after such Business Combination, (ii) the members of the Board immediately
prior to the entering into the agreement relating to such Business
Combination constitute at least a majority of the Board or the board of
directors of the surviving entity immediately after such Business
Combination, with no agreements or arrangements in place immediately after
such consummation that would result in the members of the Board immediately
prior to the entering into the agreement relating to such Business
Combination ceasing to constitute at least a majority of the Board or the
board of directors of the surviving entity and (iii) no Non-Financial
Person or Group of Non-Financial Persons is the Beneficial Owner of 20% or
more of the total outstanding Voting Stock or common stock of the surviving
entity and no Financial Person or Group of Financial Persons is the
Beneficial Owner of 35% or more of the total outstanding Voting Stock or
common stock of the surviving entity or (b) any Non-Financial Person or
Group of Non-Financial persons acquiring Beneficial Ownership of 20% or
more of the total outstanding Voting Stock or Common Stock of the Company
or any Financial Person or Group of Financial Persons acquiring Beneficial
Ownership of 35% or more of the total outstanding Voting Stock or Common
Stock of the Company.
"Common Stock" means the Company's common stock, par value $.01 per share,
and any Capital Stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or
pursuant to an agreement or Business Combination to which the Company is a
party.
"Common Stock Equivalents" means (without duplication with any other Common
Stock or common stock, as the case may be, or Common Stock Equivalents)
rights, warrants, options, convertible securities or exchangeable
securities, exercisable for or convertible or exchangeable into, directly
or indirectly, Common Stock, or common stock, as the case may be, whether
at the time of issuance or upon the passage of time or the occurrence of
some future event, including the Warrants.
"Company" means EEX Corporation, a Texas corporation.
"Early Exercise Event" means the occurrence of any of the following: (i) an
agreement providing for a Business Combination is approved by the Board if
such Business Combination, if consummated, would result in a Change of
Control, (ii) a Tender Offer for the Company's securities is approved or
recommended by the Board, (iii) Warburg, Pincus Equity Partners, L.P. and
its Affiliates Beneficially Own less than 10% of the outstanding Voting
Stock of the Company, (iv) there is a redemption, repurchase or
reacquisition by the Company of Rights issued pursuant to the Rights
Agreement or any waiver of the application of the Rights Agreement to any
Beneficial Owner or (v) any Non-Financial Person or Group of Non-Financial
Persons Beneficially Own more than 20% of the outstanding Voting Stock of
the Company or any Financial Person or Group of Financial Persons
Beneficially Own more than 35% of the outstanding Voting Stock of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations promulgated
thereunder.
"Excluded Stock" means (i) shares of Common Stock issued by the Company as
a stock dividend payable in shares of Common Stock, or upon any subdivision
or split-up of the
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outstanding shares of Capital Stock in each case with is subject to Section
13(B), or upon conversion of shares of Capital Stock (but not the issuance
of such Capital Stock which will be subject to the provisions of Section
13(A)(iii)), (ii) shares of Common Stock to be issued to employees,
consultants and advisors of the Company pursuant to options granted prior
to the date of issuance of this Warrant and pursuant to options granted
after the date of issuance of this Warrant if the exercise price per share
of Common Stock on the date of such grant equals or exceeds the Market
Price of a share of Common Stock on the date of such grant.
"Exercise Price" has the meaning given to it in Section 2.
"Expiration Time" has the meaning given to it in Section 3.
"Financial Person" means any Person that (i) is, or holds itself out as
being, engaged primarily in the business of investing, reinvesting, owning,
holding or trading in securities, and (ii) together with its Affiliates is
not engaged in (x) any significant activities other than financial
services, insurance or investment activities or (y) directly or indirectly
through Affiliates, in any industrial activities, including the oil and gas
and energy industry.
"Group" means a group as contemplated by Section 13(d)(3) of the Exchange
Act.
"Market Price" means, with respect to a particular security, on any given
day, the last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the last closing bid and asked
prices regular way, in either case on the principal national securities
exchange on which the applicable securities is listed or admitted to
trading, or if not listed or admitted to trading on any national securities
exchange, (i) the closing sale price for such day reported by the NASDAQ
Stock Market if such security is traded over-the-counter and quoted in the
NASDAQ Stock Market, or (ii) if such security is so traded, but not so
quoted, the average of the closing reported bid and asked prices of such
security as reported by the NASDAQ Stock Market or any comparable system,
or (iii) if such security is not listed on the NASDAQ Stock Market or any
comparable system, the average of the closing bid and asked prices as
furnished by two members of the National Association of Securities Dealers,
Inc. selected from time to time by the Company for that purpose. If such
security is not listed and traded in a manner that the quotations referred
to above are available for the period required hereunder, the Market Price
per share of Common Stock shall be deemed to be the fair value per share of
such security as determined in good faith by the Board of Directors of the
Company.
"Modified Fully-Diluted Basis" shall mean a calculation based on the then
outstanding shares of Voting Stock or common stock, as the case may be,
plus all shares of Voting Stock or common stock acquirable pursuant to, or
constituting, Common Stock Equivalents, but excluding 50% of the Voting
Stock or common stock acquirable pursuant to the then outstanding Warrants.
"Modified Non-Diluted Basis" shall mean a calculation based on the then
outstanding shares of Voting Stock or common stock, as the case may be, and
without giving effect to outstanding Common Stock Equivalents, but
including (i) 50% of the shares of common stock then acquirable upon
exercise of the then outstanding Warrants and (ii) the number of shares of
common stock equal to (a) the aggregate Market Price as of the date of such
Business Combination of all shares of common stock acquirable upon exercise
of all outstanding employee stock options of the relevant entity that have
an exercise price of less than the Market Price of common stock as of the
date of such Business Combination less the aggregate exercises price of all
such options divided by (b) the Market Price of common stock as of the date
of such Business Combination.
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"Non-Financial Person" means any Person that is not a Financial Person.
"Ordinary Cash Dividends" means any cash dividend or distribution which,
when combined on a per share of Common Stock basis with the per share
amounts of all other cash dividends and cash distributions paid on the
Common Stock during the 365-day period ending on the date of declaration of
such dividend or distribution (as adjusted to appropriately reflect any of
the events referred to in Section 13 and excluding cash dividends or
distributions that resulted in an adjustment to the Exercise Price), does
not exceed 5% of the Market Price of a share of Common Stock on the trading
day immediately preceding the date of declaration of such dividend or
distribution.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company,
joint venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Preferred Stock" means the Series B 8% Cumulative Perpetual Preferred
Stock of the Company or successor preferred stock as contemplated by
Section 5(C)(ii)(A) of the Statement of Resolution.
"Pro Rata Repurchases" means any purchase of shares of Common Stock by the
Company or any Affiliate thereof pursuant to any tender offer or exchange
offer subject to Section 13(e) of the Exchange Act, or pursuant to any
other offer available to substantially all holders of Common Stock, whether
for cash, shares of capital stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other person or
any other property (including, without limitation, shares of capital stock,
other securities or evidences of indebtedness of a subsidiary of the
Company), or any combination thereof, effected while this Warrant is
outstanding; provided, however, that "Pro Rata Repurchase" shall not
include any purchase of shares by the Company or any Affiliate thereof made
in accordance with the requirements of Rule 10b-18 as in effect under the
Exchange Act. The "Effective Date" of a Pro Rata Repurchase shall mean the
date of acceptance of shares for purchase or exchange under any tender or
exchange offer which is a Pro Rata Repurchase or the date of purchase with
respect to any Pro Rata Repurchase that is not a tender or exchange offer.
"Purchase Agreement" means the Purchase Agreement, dated as of December 22,
1998, among the Company and the purchasers named therein, including all
schedules and exhibits thereto.
"Rights Agreement" means the Rights Agreement dated as of September 10,
1996 between the Company and Harris Trust Company of New York, a New York
trust company, as amended.
"Rights" is defined in Section 14.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
"Shares" is defined in Section 2.
"Stated Value" is an amount equal to $100.00 per share of Preferred Stock.
"Statement of Resolution" means the Statement of Resolution relating to the
Preferred Stock filed with the Secretary of State of the State of Texas on
January _____, 1999.
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"Subsidiary" of a Person means (i) a corporation, a majority of whose stock
with voting power, under ordinary circumstances, to elect directors is at
the time of determination, directly or indirectly, owned by such Person or
by one or more Subsidiaries of such Person, or (ii) any other entity (other
than a corporation) in which such Person or one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof
has at least a majority ownership interest.
"Shares" has the meaning given to it in Section 2.
"TBCA" means the Texas Business Corporation Act, as amended, or any
successor statute or other legislation.
"Tender Offer" means any transaction to which Regulation 14D of the
Exchange Act applies.
"Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to vote in the election of the board of
directors, managers or trustees of such Person.
"Warrantholder" has the meaning given to it in Section 2.
"Warrants" means collectively this Warrant, the seven year warrants to
purchase an aggregate 2,500,000 shares and the seven-year warrants to
purchase an aggregate 8,000,000 shares, all of which were issued to the
purchasers named in the Purchase Agreement pursuant to the Purchase
Agreement.
2. Number of Shares; Exercise Price. This certifies that, for value received,
[NAME OF WARBURG, PINCUS ENTITY] or its registered assigns (the
"Warrantholder") is entitled, upon the terms and subject to the conditions
hereinafter set forth, to acquire from the Company, in whole or in part, up
to an aggregate of [10,500,000] fully paid and nonassessable shares of
Common Stock, par value $0.01 per share, (the "Shares") of the Company, at
a purchase price of $12.00 per Share (the "Exercise Price"). The number of
Shares and the Exercise Price are subject to adjustment as provided herein,
and all references to "Shares", "Common Stock" and "Exercise Price" herein
shall be deemed to include any such adjustment or series of adjustments.
3. Exercise of Warrant; Term. The right to purchase the Shares represented by
this Warrant are exercisable, in whole or in part by the Warrantholder, at
any time or from time to time after the earlier of August 31, 1999 and the
occurrence of an Early Exercise Event but in no event later than 11:59 p.m.
Central Time, on January ___, 2009 (the "Expiration Time"), by (a) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly
completed and executed on behalf of the Warrantholder, at the office of the
Company in Houston, Texas (or such other office or agency of the Company in
the United States as it may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the books of
the Company), and (b) payment of the Exercise Price for the Shares thereby
purchased at the election of the Warrantholder in one of the following
manners:
(i) by tendering in cash, by certified or cashier's check or by wire
transfer payable to the order of the Company; or
(ii) by having the Company withhold shares of Common Stock issuable
upon exercise of the Warrant equal in value to the aggregate
Exercise Price as to which this Warrant is so exercised based on
the Market Price of the Common Stock on the trading day prior to
the date on which this Warrant and the Notice of Exercise are
delivered to the Company; or
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(iii) by tendering to the Company that number of shares of Preferred
Stock rounded to the nearest whole share equal to the aggregate
Exercise Price as to which this Warrant is so exercised divided
by the sum of (1) the Stated Value of the Preferred Stock plus
(2) any accrued but unpaid dividends thereon.
If the Warrantholder does not exercise this warrant in its entirety, the
Warrantholder will be entitled to receive from the Company within a
reasonable time, not exceeding three (3) business days, a new warrant in
substantially identical form for the purchase of that number of Shares
equal to the difference between the number of Shares subject to this
Warrant and the number of Shares as to which this Warrant is so exercised.
Notwithstanding the foregoing, if the Company fails to obtain the approval
of the Company's shareholders of the issuance of Common Stock pursuant to
this Warrant as contemplated by Section 5.9 of the Purchase Agreement, the
Warrantholder may only exercise this Warrant in the manner permitted by
Section 3(b)(ii) and upon any such exercise receive, in lieu of the shares
of Common Stock, cash in an amount equal to the product of (i) the number
of shares of Common Stock that would have been otherwise issuable and (ii)
the Market Price of the Common Stock on the trading day prior to the date
on which this Warrant and the Notice of Exercise are delivered to the
Company, such amount being paid by certified or cashiers check or by wire
transfer in same day funds on the fourth business day following such
exercise.
4. Issuance of Shares; Authorization; Listing. Certificates for Shares issued
upon exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or
Persons within a reasonable time, not to exceed three (3) business days
after the date on which this Warrant has been duly exercised in accordance
with the terms of this Warrant. The Company hereby represents and warrants
that any Shares issued upon the exercise of this Warrant in accordance with
the provisions of Section 3 will, upon such exercise, be duly and validly
authorized and issued, fully paid and nonassessable and free from all
taxes, liens and charges (other than liens or charges created by or imposed
upon the Warrantholder or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued
will be deemed to have been issued to the Warrantholder as of the close of
business on the date on which this Warrant and payment of the Exercise
Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be actually
delivered on such date. The Company will at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of providing for the exercise of this Warrant, the aggregate number
of shares of Common Stock issuable upon exercise of this Warrant. The
Company will (i) procure, at its sole expense, the listing of the Shares
and other securities issuable upon exercise of this Warrant, subject to
issuance or notice of issuance on all stock exchanges on which the Common
Stock or such other securities are then listed or traded and (ii) maintain
the listing of such Shares or such other securities after issuance. The
Company will take all action as may be necessary to ensure that the Shares
may be issued without violation of any applicable law or regulation or of
any requirement of any securities exchange on which the Shares are listed
or traded.
5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In
lieu of any fractional Share to which the Warrantholder would otherwise be
entitled, the Warrantholder shall be entitled to receive a cash payment
equal to the Market Price of the Common Stock less the Exercise Price for
such fractional share.
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6. No Rights as Shareholders; Transfer Books. This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a shareholder of
the Company prior to the date of exercise hereof. The Company will at no
time close its transfer books against transfer of this Warrant in any
manner which interferes with the timely exercise of this Warrant.
7. Charges, Taxes and Expenses. Certificates for shares issued upon exercise
of this Warrant shall be issued in the name of the Warrantholder. Issuance
of certificates for shares upon the exercise of this Warrant shall be made
without charge to the Warrantholder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificates, all of
which taxes and expenses shall be paid by the Company.
8. Transfer/Assignment. This Warrant and any rights hereunder are not
transferable by the Warrantholder, in whole or in part, in the absence of
any effective registration statement related to this Warrant or an opinion
of counsel, satisfactory in form and substance to the Company, that such
registration is not required under the Securities Act and any applicable
state securities laws. Subject to compliance with the preceding sentence,
this Warrant and all rights hereunder are transferable, in whole or in
part, upon the books of the Company by the registered holder hereof in
person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but
registered in the name of the transferee, upon surrender of this Warrant,
duly endorsed, to the office or agency of the Company described in Section
2. All expenses, taxes (other than stock transfer taxes) and other charges
payable in connection with the preparation, execution and delivery of the
new warrants pursuant to this Section 8 shall be paid by the Company. The
restrictions imposed by the first sentence of this Section 8 shall
terminate as to the Warrant (i) when such security has been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering such security, or (ii) when, in the opinion
of counsel for the Company, such restrictions are no longer required in
order to achieve compliance with the Securities Act.
9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the
surrender hereof by the Warrantholder at the office or agency of the
Company described in Section 2, for a new warrant or warrants of like tenor
and date representing the right to purchase in the aggregate a like number
of shares. The Company shall maintain at the office or agency described in
Section 2 a registry showing the name and address of the Warrantholder as
the registered holder of this Warrant. This Warrant may be surrendered for
exchange or exercise, in accordance with its terms, at the office of the
Company, and the Company shall be entitled to rely in all respects, prior
to written notice to the contrary, upon such registry.
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such
loss, theft or destruction, of an indemnity letter (reasonably satisfactory
to the Company) by an institutional Warrantholder, or in other cases,
indemnity or security reasonably satisfactory to it, and in the case of
such mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver a new warrant or warrants of like tenor and
date, in lieu of this Warrant.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such
right may be exercised on the next succeeding day that is a Business Day.
12. Rule 144 Information. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder (or, if the Company is
not required to file such reports, it will, upon
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the request of any Warrantholder, make publicly available such
information), and it will take such further action as any Warrantholder may
reasonably request, all to the extent required from time to time to enable
such holder to sell the Warrants without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under
the Securities Act, as such Rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Securities and
Exchange Commission. Upon the request of any Warrantholder, the Company
will deliver to such Warrantholder a written statement that it has complied
with such requirements.
13. Adjustments and Other Rights. The Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall be subject to adjustment from
time to time as follows:
(A) Common Stock Issued at Less than Market Value. If the Company
issues or sells any Common Stock other than Excluded Stock without
consideration or for consideration per share less than the Market Price of
the Common Stock, on the last trading day immediately preceding such
issuance, the Exercise Price in effect immediately prior to each such
issuance or sale will immediately (except as provided below) be reduced to
the price determined by multiplying the Exercise Price, in effect
immediately prior to such issuance or sale, by a fraction, (1) the
numerator of which shall be (x) the number of shares of Common Stock
outstanding immediately prior to such issuance or sale plus (y) the number
of shares of Common Stock which the aggregate consideration received by the
Company for the total number of such additional shares of Common Stock so
issued or sold would purchase at the Market Price on the last trading day
immediately preceding such issuance or sale and (2) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such issue or sale. In such event, the number of shares of Common
Stock issuable upon the exercise of this Warrant shall be increased to the
number obtained by dividing (i) the product of (a) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (b)
the Exercise Price in effect immediately prior to the issuance giving rise
to this adjustment by (ii) the new Exercise Price determined in accordance
with the immediately preceding sentence. For the purposes of any adjustment
of the Exercise Price and the number of Shares issuable upon exercise of
this Warrant pursuant to this Section 13(A), the following provisions shall
be applicable:
(i) In the case of the issuance of Common Stock for cash, the
amount of the consideration received by the Company shall be deemed to
be the amount of the cash proceeds received by the Company for such
Common Stock before deducting therefrom any discounts or commissions
allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof.
(ii) In the case of the issuance of Common Stock (otherwise
than upon the conversion of shares of Capital Stock or other
securities of the Company) for a consideration in whole or in part
other than cash, including securities acquired in exchange therefor
(other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the fair value
thereof as determined by the Board, provided, however, that such fair
value as determined by the Board shall not exceed the aggregate Market
Price of the shares of Common Stock being issued as of the date the
Board authorizes the issuance of such shares.
(iii) In the case of the issuance of (a) options, warrants or
other rights to purchase or acquire Common Stock (whether or not at
the time exercisable) or (b) securities by their terms convertible
into or exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to
purchase such convertible or exchangeable securities (whether or not
at the time exercisable):
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(1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or
other rights to purchase or acquire Common Stock shall
be deemed to have been issued at the time such
options, warrants or rights are issued and for a
consideration equal to the consideration (determined
in the manner provided in Section 13(A)(i) and (ii),
if any, received by the Company upon the issuance of
such options, warrants or rights plus the minimum
purchase price provided in such options, warrants or
rights for the Common Stock covered thereby;
(2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities, or upon
the exercise of options, warrants or other rights to
purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange
thereof, shall be deemed to have been issued at the
time such securities were issued or such options,
warrants or rights were issued and for a consideration
equal to the consideration, if any, received by the
Company for any such securities and related options,
warrants or rights (excluding any cash received on
account of accrued interest or accrued dividends),
plus the additional consideration (determined in the
manner provided in Section 13(A)(i) and (ii), if any,
to be received by the Company upon the conversion or
exchange of such securities, or upon the exercise of
any related options, warrants or rights to purchase or
acquire such convertible or exchangeable securities
and the subsequent conversion or exchange thereof;
(3) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options,
warrants or rights or conversion or exchange of such
convertible or exchangeable securities or any change
in the consideration to be received by the Company
upon such exercise, conversion or exchange, but
excluding changes resulting from the anti-dilution
provisions thereof (to the extent comparable to the
anti-dilution provisions contained herein), the
Exercise Price and the number of Shares issuable upon
exercise of this Warrant as then in effect shall
forthwith be readjusted to such Exercise Price and
number of Shares as would have been obtained had an
adjustment been made upon the issuance of such
options, warrants or rights not exercised prior to
such change, or of such convertible or exchangeable
securities not converted or exchanged prior to such
change, upon the basis of such change;
(4) on the expiration or cancellation of any such options,
warrants or rights (without exercise), or the
termination of the right to convert or exchange such
convertible or exchangeable securities (without
exercise), if the Exercise Price and the number of
Shares issuable upon exercise of this Warrant shall
have been adjusted upon the issuance thereof, the
Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall forthwith be readjusted
to such
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Exercise Price and number of Shares as would have been
obtained had an adjustment been made upon the issuance
of such options, warrants, rights or such convertible
or exchangeable securities on the basis of the
issuance of only the number of shares of Common Stock
actually issued upon the exercise of such options,
warrants or rights, or upon the conversion or exchange
of such convertible or exchangeable securities; and
(5) if the Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall have been
adjusted upon the issuance of any such options,
warrants, rights or convertible or exchangeable
securities, no further adjustment of the Exercise
Price and the number of Shares issuable upon exercise
of this Warrant shall be made for the actual issuance
of Common Stock upon the exercise, conversion or
exchange thereof; provided, however, that no increase
in the Exercise Price shall be made pursuant to
subclauses (1) or (2) of this Section 13(A) (iii).
(B) Stock Splits, Subdivisions, Reclassifications or Combinations. If
the Company shall (1) declare a dividend or make a distribution on its
Common Stock in shares of Common Stock, (2) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (3)
combine or reclassify the outstanding Common Stock into a smaller number of
shares, the number of Shares issuable upon exercise of this Warrant at the
time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be
proportionately adjusted so that the Warrantholder after such date shall be
entitled to purchase the number of shares of Common Stock which such holder
would have owned or been entitled to receive after such date had this
Warrant been exercised immediately prior to such date. Successive
adjustments in the Exercise Price shall be made whenever any event
specified above shall occur. In such event the Exercise Price in effect at
the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall
be adjusted to the number obtained by dividing (i) the product of (a) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment and (b) the Exercise Price in effect immediately prior to the
issuance giving rise to this adjustment by (ii) the new number of shares
issuable upon exercise of the Warrant determined pursuant to the
immediately preceding sentence.
(C) Other Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of shares of its Common
Stock (i) of shares of any class other than its Common Stock or (ii) of
evidence of indebtedness of the Company or any Subsidiary or (iii) of
assets (excluding Ordinary Cash Dividends, and dividends or distributions
referred to in Section 13(B)), or (iv) of rights or warrants (excluding
those referred to in Section 13(B)), in each such case the Exercise Price
in effect prior thereto shall be reduced immediately thereafter
to the price determined by dividing (x) an amount equal to the difference
resulting from (1) the number of shares of Common Stock outstanding on such
record date multiplied by the Exercise Price per share on such record date,
less (2) the fair market value (as reasonably determined by the Board) of
said shares or evidences of indebtedness or assets or rights or warrants to
be so distributed, by (y) the number of shares of Common Stock outstanding
on such record date; such adjustment shall be made successively whenever
such a record date is fixed. In such event, the number of shares of Common
Stock issuable upon the exercise of this Warrant shall be increased to the
number obtained by dividing (i) the product of (a) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (b)
the Exercise Price in effect immediately prior to
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the issuance giving rise to this adjustment by (ii) the new Exercise Price
determined in accordance with the immediately preceding sentence. In the
event that such distribution is not so made, the Exercise Price and the
number of Shares issuable upon exercise of this Warrant then in effect
shall be readjusted, effective as of the date when the Board determines not
to distribute such shares, evidences of indebtedness, assets, rights or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise
of this Warrant if such record date had not been fixed.
(D) Certain Repurchases of Common Stock. In case the Company effects
a Pro Rata Repurchase of Common Stock, then the Exercise Price shall be
reduced to the price determined by multiplying the Exercise Price in effect
immediately prior to the effective date of such Pro Rata Repurchase by a
fraction of which the numerator shall be (i) the product of (x) the number
of shares of Common Stock outstanding immediately before such Pro Rata
Repurchase and (y) the Market Price of a share of Common Stock on the
trading day immediately preceding the first public announcement by the
Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata
Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro
Rata Repurchase minus the number of shares of Common Stock so repurchased
and (ii) the Market Price per share of Common Stock on the trading day
immediately preceding the first public announcement of such Pro Rata
Repurchase. In such event, the number of shares of Common Stock issuable
upon the exercise of this Warrant shall be increased to the number obtained
by dividing (i) the product of (a) the number of Shares issuable upon the
exercise of this Warrant before such adjustment, and (b) the Exercise Price
in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (ii) the new Exercise Price determined in accordance with the
immediately preceding sentence.
(E) Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common
Stock referred to in Section 13(B)), any Shares issued or issuable upon
exercise of this Warrant after the date of such Business Combination or
reclassification be exchangeable for the number of shares of stock or other
securities or property (including cash) to which the Common Stock issuable
(at the time of such consolidation, merger, sale, lease or conveyance) upon
exercise of this Warrant immediately prior to such Business Combination or
reclassification would have been entitled upon such Business Combination or
reclassification; and in any such case, if necessary, the provisions set
forth herein with respect to the rights and interests thereafter of the
Warrantholder shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant. In
determining the kind and amount of stock, securities or the property
receivable upon consummation of such Business Combination, if the holders
of Common Stock have the right to elect the kind or amount of consideration
receivable upon consummation of such Business Combination, then the
Warrantholder shall have the right to make a similar election upon exercise
of this Warrant with respect to the number of shares of stock or other
securities or property which the Warrantholder will receive upon exercise
of this Warrant.
(F) Rounding of Calculations; Minimum Adjustments. All calculations
under this Section 13 shall be made to the nearest one-tenth (1/10th) of a
cent or to the nearest one-hundreth (1/100th) of a share, as the case may
be. Any provision of this Section 13 to the contrary notwithstanding, no
adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable shall be made if the amount of such adjustment would
be less than $0.01 or one-tenth (1/10th) of a share of Common Stock,
respectively, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together
with any subsequent adjustment which, together with such
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amount and any other amount or amounts so carried forward, shall aggregate
$0.01 or 1/10th of a share of Common Stock, respectively, or more.
(G) Timing of Issuance of Additional Common Stock Upon Certain
Adjustments. In any case in which the provisions of this Section 13 shall
require that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the occurrence of
such event (i) issuing to the Warrantholder of this Warrant exercised after
such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such exercise by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such exercise before giving effect to such adjustment and
(ii) paying to such Warrantholder any amount of cash in lieu of a
fractional share of Common Stock; provided, however, that the Company upon
request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholder's right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment.
(H) Statement Regarding Adjustments. Whenever the Exercise Price or
the number of Shares into which this Warrant is exercisable shall be
adjusted as provided in Section 13, the Company shall forthwith file, at
the principal office of the Company a statement showing in reasonable
detail the facts requiring such adjustment and the Exercise Price that
shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment and the Company shall also cause a
copy of such statement to be sent by mail, first class postage prepaid, to
each Warrantholder at the address appearing in the Company's records.
(I) Notices. In the event that the Company shall propose to take any
action of the type described in this Section 13 (but only if the action of
the type described in this Section 13 would result in an adjustment in the
Exercise Price or the number of Shares into which this Warrant is
exercisable or a change in the type of securities or property to be
delivered upon exercise of this Warrant), the Company shall give notice to
the Warrantholder, in the manner set forth in Section 13(H), which notice
shall specify the record date, if any, with respect to any such action and
the approximate date on which such action is to take place. Such notice
shall also set forth the facts with respect thereto as shall be reasonably
necessary to indicate the effect on the Exercise Price and the number, kind
or class of shares or other securities or property which shall be
deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at
least 10 days prior to the date so fixed, and in case of all other action,
such notice shall be given at least 15 days prior to the taking of such
proposed action. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of any such action.
(J) No Impairment. The Company will not, by amendment of its Articles
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to
be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant
and in taking of all such action as may be necessary or appropriate in
order to protect the rights of the Warrantholder.
14. Rights. Whenever the Company shall issue shares of Common Stock upon
exercise of this Warrant, the Company shall issue, together with each such
share of Common Stock, one right to purchase Series A Junior Participating
Preferred Stock of the Company (or other securities in lieu thereof)
pursuant to the Rights Agreement, or any similar rights issued to holders
of Common Stock in addition thereto or in the replacement therefor (such
rights, together with any additional or replacement rights, being
collectively referred to as the "Rights"), whether or not such Rights shall
be exercisable at such time, but only if such Rights are issued and
outstanding and held by the other holders of Common Stock (or
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evidenced by outstanding share certificates representing Common Stock) at
such time and have not expired or been redeemed.
15. Governing Law. This Warrant shall be binding upon any successors or assigns
of the Company. This Warrant shall constitute a contract under the laws of
Texas and for all purposes shall be construed in accordance with and
governed by the laws of Texas, without giving effect to the conflict of
laws principles.
16. Attorneys' Fees. In any litigation, arbitration or court proceeding between
the Company and the Warrantholder as the holder of this Warrant relating
hereto, the prevailing party shall be entitled to reasonable attorneys'
fees and expenses incurred in enforcing this Warrant.
17. Amendments. This Warrant may be amended and the observance of any term of
this Warrant may be waived only with the written consent of the Company and
the Warrantholder.
18. Notice. All notices hereunder shall be in writing and shall be effective
(a) on the day on which delivered if delivered personally or transmitted by
telex or telegram or telecopier with evidence of receipt, (b) one Business
Day after the date on which the same is delivered to a nationally
recognized overnight courier service with evidence of receipt, or (c) five
Business Days after the date on which the same is deposited, postage
prepaid, in the U.S. mail, sent by certified or registered mail, return
receipt requested, and addressed to the party to be notified at the address
indicated below for the Company, or at the address for the Warrantholder
set forth in the registry maintained by the Company pursuant to Section 9,
or at such other address and/or telecopy or telex number and/or to the
attention of such other person as the Company or the Warrantholder may
designate by ten-day advance written notice.
19. Prohibited Actions. The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise
Price if the total number of shares of Common Stock issuable after such
action upon exercise of this Warrant, together with all shares of Common
Stock then outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding options, warrants, conversion and other
rights, would exceed the total number of shares of Common Stock then
authorized by its Restated Articles of Incorporation.
20. Entire Agreement. This Warrant and the forms attached hereto contain the
entire agreement between the parties with respect to the subject matter
hereof and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by a
duly authorized officer.
Dated: January ____, 1999
EEX CORPORATION
--------------------------------------
J.T. Leary
Vice President - Finance and Treasurer
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[FORM OF NOTICE OF EXERCISE]
Date: ______________
TO: EEX Corporation
RE: Election to Subscribe for and Purchase Common Stock
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to subscribe for and purchase the number of shares of the
Common Stock set forth below covered by such Warrant. The undersigned, in
accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate
Exercise Price for such shares of Common Stock in the manner set forth below. A
new warrant evidencing the remaining shares of Common Stock covered by such
Warrant, but not yet subscribed for and purchased, should be issued in the name
set forth below. If the new warrant is being transferred, an opinion of counsel
is attached hereto with respect to the transfer of such warrant.
Number of Shares of Common Stock: _______________
Method of Payment of Exercise Price: ____________
Name and Address of Person to be
Issued New Warrant: _____________________________
_____________________________
_____________________________
_____________________________
Holder: __________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
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