WARRANT AGREEMENT
Among
FORMAN PETROLEUM CORPORATION
And
EACH OF THE OTHER PERSONS LISTED ON THE SIGNATURE PAGES
ATTACHED HERETO OR OTHERWISE PARTY TO THIS AGREEMENT
January 14, 2000
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of January 14, 2000 (this "Agreement")
is entered into by and among Forman Petroleum Corporation, a Louisiana
corporation (the "Company"), and each of the other Persons listed on the
signature pages attached hereto or otherwise party to this Agreement.
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions of this Agreement, the
Company will issue 50,000 Series A Warrants (the "Series A Warrants"),
150,000 Series B Warrants (the "Series B Warrants"), 150,000 Series C
Warrants (the "Series C Warrants") and 150,000 Series D Warrants (the
"Series D Warrants") to purchase, respectively, 50,000, 150,000, 150,000
and 150,000 shares (subject to adjustment as provided herein) of Common
Stock (as hereinafter defined) of the Company; and
WHEREAS, the Warrants (as hereinafter defined) will be initially
issued to each of the other Persons listed on the signature pages attached
hereto or otherwise party to this Agreement.
NOW, THEREFORE, in consideration of the premises and of the terms and
conditions herein contained, the parties hereto mutually agree as follows:
Section 1. DEFINED TERMS. The following capitalized terms when used
in this Agreement shall have the following meanings:
"Affiliate" means, with respect to any specified Person, (a) any
subsidiary of such Person, (b) any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with such specified Person, (c) any other Person that owns, directly or
indirectly, 10% or more of such specified Person's capital stock, (d) any
officer or director of (i) any such specified Person, (ii) any subsidiary
of such specified Person, or (iii) any Person described in clause (b) or
(c) above; or (e) any heir or legatee or other Person having a relationship
with any natural Person directly or indirectly controlling or controlled by
or under common control with such other Person described in this clause
(e). For purposes of this definition, "control," with respect to any
specified Person, means the possession of the power, whether or not
exercised, to direct or cause the direction of the management or policies
of such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
a "business day" means a day, other than a Saturday, Sunday or legal
holiday on which commercial banks are authorized or obligated by law or
executive order to close in the State of Louisiana.
"Closing Price" for any Security that is regularly traded on any
market on each business day means: (i) if such Security is listed or
admitted to trading on any national stock exchange, the closing price on
such day on the principal exchange on which such Security is traded, or if
no sale takes place on such day, the average of the closing bid and asked
prices on such day or (ii) if such Security is not then listed or admitted
to trading on any national stock exchange, the last reported sale price on
such day, or if there is no such last reported sale price on such day, the
average of the closing bid and the asked prices on such day, as reported by
a reputable national quotation source designated by the Company or the
principal broker making a market in such Security. If there are no such
prices on a business day, then the Closing Price shall not be determinable
for such business day.
"Common Stock" means the common stock, no par value, of the Company.
"Company" shall have the meaning set forth in the first paragraph of
this Agreement.
"Convertible Securities" shall have the meaning set forth in Section
8(e) of this Agreement.
"Current Market Price" means, if the Common Stock is traded on a
national stock exchange, the Nasdaq National Market or the over-the-counter
market, the average of the Closing Price over the ten (10) trading days
immediately preceding the date of valuation at which the Common Stock has
traded.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall mean the Series A Exercise Price, the Series B
Exercise Price, the Series C Exercise Price and/or the Series D Exercise
Price, as appropriate.
"Expiration Date" shall have the meaning set forth in Section 6 of
this Agreement.
"Forman" shall mean McLain J. Forman.
"Holders" shall have the meaning set forth in Section 4 of this
Agreement.
"Independent Financial Expert" shall mean an investment banking firm
selected by the Company (i) that does not (and whose directors, officers,
employees and Affiliates do not) have a direct or indirect financial
interest in the Company or any of its Affiliates, (ii) that has not been,
and, at the time it is called upon to serve as an Independent Financial
Expert under this Agreement is not (and none of whose directors, officers,
employees or Affiliates is) a promoter, director or officer of the Company,
(iii) that has not been retained by the Company or any of its Affiliates
for any purpose, other than to perform an equity valuation, within the
preceding twelve months, and (iv) that, in the reasonable judgment of the
board of directors of the Company, is otherwise qualified to serve as an
independent financial advisor.
"Nasdaq" means the Nasdaq Stock Market.
"Nasdaq National Market" means the Nasdaq National Market of Nasdaq.
"Permitted Forman Transferee" shall mean any friend of Forman or
immediate member of Forman's family who receives Warrants from Forman by
gift, donation or other gratuitous inter vivos transfer.
"Permitted Transfer" means any transfer of a Warrant pursuant to
Section 5 of this Agreement.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or agency or political
subdivision thereof.
"Public Offering" means any underwritten public offering, initiated by
resolution of the board of directors of the Company, of the Common Stock
pursuant to an effective registration statement filed under the Securities
Act.
"Registration Rights Agreement" shall have the meaning set forth in
Section 22 of this Agreement.
"Reorganizations" shall have the meaning set forth in Section 8(i) of
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Exercise Price" shall have the meaning set forth in Section
6(b) of this Agreement.
"Series A Warrants" shall have the meaning set forth in the recitals
to this Agreement.
"Series B Exercise Price" shall have the meaning set forth in Section
6(b) of this Agreement.
"Series B Warrants" shall have the meaning set forth in the recitals
to this Agreement.
"Series C Exercise Price" shall have the meaning set forth in Section
6(b) of this Agreement.
"Series C Warrants" shall have the meaning set forth in the recitals
to this Agreement.
"Series D Exercise Price" shall have the meaning set forth in Section
6(b) of this Agreement.
"Series D Warrants" shall have the meaning set forth in the recitals
to this Agreement.
"Specified Value" per share of Common Stock or of any other security
(herein collectively referred to as a "Security") at any date shall be: (i)
if the Security is not regularly traded in any market, the value of the
Security determined in good faith by the board of directors of the Company
and certified in a board resolution, which determination shall be final and
binding upon the Holders; provided that if any of the Holders of 20% or
more of the warrants disagree with such valuation by the board of directors
and provide notice of such disagreement to the Company requesting an
independent valuation, then the Company shall select an Independent
Financial Expert who shall determine the value of such Security and whose
customary compensation shall be provided by the Holders requesting such
independent valuation; (ii) if the Security is regularly traded in any
market, the average of the Closing Prices for each business day during the
period commencing 10 business days before such date and ending on the date
one day prior to such date or, if the Security has been regularly traded
for less than 30 consecutive business days before such date, then the
average of the Closing Prices for all of the business days before such date
for which Closing Prices are available; provided that, if the Closing Price
is not determinable for at least 15 business days in such period, the
Specified Value of the Security shall be determined as if the Security was
not regularly traded; or (iii) if the Security is registered under the
Exchange Act and is being sold in a firm commitment underwritten public
offering registered under the Securities Act, the public offering price of
such Security set forth on the cover page of the prospectus relating to
such offering.
"Stockholders' Agreement" means that certain Stockholders' Agreement
dated the date hereof by and among the Company and the parties listed on
the signature pages thereto or otherwise party to such agreement.
"Transfer Agent" shall have the meaning set forth in Section 11 of
this Agreement.
"Warrant Certificates" shall have the meaning set forth in Section 2
of this Agreement.
"Warrant Number" shall mean the number of shares of Common Stock
issuable upon the exercise of each Warrant, subject to adjustment as
provided in Section 8 of this Agreement, which number shall initially be
one.
"Warrant Register" shall mean the register maintained at the office
of the Company pursuant to Section 4 hereof in which the names of the
Holders of Warrants shall be registered.
"Warrant Shares" means the shares of Common Stock and other securities
issuable upon exercise of the Warrants.
"Warrants" shall mean, collectively, the Series A Warrants, the Series
B Warrants, the Series C Warrants and the Series D Warrants.
Section 2. WARRANT CERTIFICATES. The Company will issue and deliver a
certificate or certificates evidencing the Warrants (the "Warrant
Certificates") pursuant to this Agreement. Such Warrant Certificates shall
indicate which series of Warrants are represented thereby and shall be
substantially in the form set forth as Exhibit "A" attached hereto. The
Warrant Certificates shall be dated the date of issuance by the Company.
Section 3. EXECUTION OF WARRANT CERTIFICATES. The Warrant
Certificates shall be signed on behalf of the Company by its Chief
Executive Officer or a Vice President. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or
any future Chief Executive Officer or Vice President, and may be imprinted
or otherwise reproduced on the Warrant Certificates and, for such purpose,
the Company may adopt and use the facsimile signature of any person who
shall have been Chief Executive Officer or Vice President, notwithstanding
the fact that at the time the Warrant Certificates shall be delivered or
disposed of he shall have ceased to hold such office. Each Warrant
Certificate shall also be signed on behalf of the Company by a manual or
facsimile signature of its Secretary or an Assistant Secretary.
Section 4. REGISTRATION. The Company shall number and register the
Warrant Certificates in the Warrant Register maintained for such purpose as
they are issued. The Company may deem and treat the registered holder(s)
from time to time of the Warrant Certificates, including any transferee
pursuant to a Permitted Transfer, (the "Holders") as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone) for all purposes and shall not be affected by any
notice to the contrary.
Section 5. RESTRICTIONS ON TRANSFER; REGISTRATION OF TRANSFERS.
(a) Prior to any sale, assignment or other transfer (a "transfer") or
proposed transfer of the Warrants, unless such transfer is made pursuant to
an effective registration statement under the Securities Act, the
transferring Holder will, if requested by the Company, deliver to the
Company an opinion of counsel, reasonably satisfactory in form and
substance to the Company, to the effect that the Warrants may be sold or
otherwise transferred without registration under the Securities Act;
provided, however, that with respect to transfers by a Holder to its
Affiliate or transfers by Forman to Permitted Forman Transferees, no such
opinion shall be required. After receipt of the opinion of counsel, if
requested by the Company, the Company shall, within five days thereof,
notify the Holder of such Warrants as to whether such opinion is reasonably
satisfactory, or if the Company does not so notify such Holder within such
five day period, such Holder shall thereupon be entitled to effect such
transfer of such Warrants. Upon original issuance thereof, and until such
time as the same shall have been registered under the Securities Act or
sold pursuant to Rule 144 promulgated thereunder (or any similar rule or
regulation), each Warrant Certificate shall bear the legend included on the
first page of Exhibit A, unless in the opinion of such counsel, such legend
is no longer required by the Securities Act and each certificate
representing Warrant Shares shall bear the legend(s) specified by the
Stockholders' Agreement.
(b) The Company shall, upon compliance with the terms of Section
5(a), register the Permitted Transfer of any outstanding Warrant
Certificates in the Warrant Register to be maintained by the Company upon
surrender of such Warrant Certificates at the office of the Company
maintained for such purpose pursuant to Section 18, accompanied by (i) a
written instrument or instruments of transfer in form reasonably
satisfactory to the Company, duly executed by the registered Holder or
Holders thereof or by the duly appointed legal representative thereof or by
a duly authorized attorney and (ii) payment of funds sufficient to pay any
stock transfer taxes payable upon the making of such Permitted Transfer.
Upon any such registration of transfer, the Company shall execute and
deliver a new Warrant Certificate to the transferee Holder(s) and in the
denominations specified in such instrument of assignment and the
surrendered Warrant Certificate shall be canceled and disposed of by the
Company. Subject to the terms of Section 6 hereof, a Warrant, if properly
assigned, may be exercised by a new Holder without a new Warrant first
having been issued.
(c) If and when any outstanding Warrant Certificate is assigned in
blank (in case the restrictions on transferability shall have been
terminated), the Company may (but shall not be obliged to) treat the bearer
of such certificate as the absolute owner of such Warrant for all purposes
and the Company shall not be affected by any notice to the contrary.
(d) Subject to compliance with this Section 5, any outstanding
Warrant Certificates may be divided or combined with other Warrants upon
presentation at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which the new
Warrants are to be issued, signed by the Holder of the surrendered Warrant
Certificates or its agent or attorney.
Section 6. WARRANTS; EXERCISE OF WARRANTS.
(a) Subject to the terms of this Agreement, each Holder shall have
the right, which may be exercised commencing on the date of issuance of the
Warrants and until 5:00 p.m., New York time, on January 14, 2007 (the
"Expiration Date"), to receive from the Company the number of duly
authorized, validly issued, fully paid and nonassessable Warrant Shares
(and such other consideration), free from all liens and other encumbrances
thereon, which the Holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise Price then in effect
for such Warrant Shares; provided, however, that no Series B Warrant may be
exercised until all Series A Warrants owned by such Holder have been
exercised; and provided further, that no Series C Warrant may be exercised
until all Series A Warrants and Series B Warrants owned by such Holder have
been exercised; and provided further, that no Series D Warrant may be
exercised until all Series A Warrants, Series B Warrants and Series C
Warrants owned by such Holder have been exercised. Each Warrant not
exercised prior to 5:00 p.m., New York time, on the Expiration Date shall
become void and all rights thereunder and all rights in respect thereof
under this Agreement shall cease as of such time. No adjustments as to
dividends will be made upon exercise of the Warrants, except as otherwise
expressly provided herein.
(b) The price at which each Warrant shall be exercisable shall be as
follows:
(i) The price at which each Series A Warrant shall be
exercisable, (the "Series A Exercise Price"), shall
initially be $34.74 per Warrant Share.
(ii) The price at which each Series B Warrant shall be
exercisable, (the "Series B Exercise Price"), shall
initially be $92.80 per Warrant Share.
(iii)The price at which each Series C Warrant shall be
exercisable (the "Series C Exercise Price"), shall initially
be $117.80 per Warrant Share.
(iv) The price at which each Series D Warrant shall be
exercisable (the "Series D Exercise Price"), shall initially
be $137.80 per Warrant Share.
(v) As used herein, the term "Exercise Price" shall mean the
Series A Exercise Price, the Series B Exercise Price, the
Series C Exercise Price and/or the Series D Exercise Price,
as appropriate.
(c) Each Warrant shall be exercisable, at the election of the Holder
thereof, either in full or from time to time in part, during normal
business hours on any business day prior to the Expiration Date. A Warrant
may be exercised upon surrender to the Company at its office designated for
such purpose (as provided for in Section 18 hereof) of the Warrant
Certificate or Certificates to be exercised with the form of election to
purchase attached thereto duly filled in and signed and upon payment to the
Company of the Exercise Price for the number of Warrant Shares in respect
of which such Warrants are then exercised. Prior to the issuance and
delivery of any Warrant Shares by the Company pursuant to this Section 6,
each Holder exercising such Warrants shall be required to execute the
Stockholders' Agreement, unless such Holder is already a party thereto.
Payment of the aggregate Exercise Price shall be made in cash or by
certified or official bank check payable to the order of the Company.
(d) Subject to the provisions of Section 8 hereof, upon such
surrender of Warrant Certificates, execution of the Stockholders'
Agreement, if required, and payment of the Exercise Price, the Company
shall issue and cause to be delivered, as promptly as practicable, to or
upon the written order of the Holder and in such name or names as such
Holder may designate a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants (and such other
consideration as may be deliverable upon exercise of such Warrants)
together with cash for fractional Warrant Shares as provided in Section 12
hereof. The certificate or certificates for such Warrant Shares shall be
deemed to have been issued and the person so named therein shall be deemed
to have become a holder of record of such Warrant Shares as of the close of
business on the date of the surrender of such Warrants, execution of the
Stockholders' Agreement, if required, and payment of the Exercise Price,
irrespective of the date of delivery of such certificate or certificates
for Warrant Shares. In the event that a Warrant Certificate is exercised
in respect of fewer than all of the Warrant Shares issuable on such
exercise at any time prior to the Expiration Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued and
delivered pursuant to the provisions of this Section 6 and of Section 4
hereof. All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled and disposed of by the Company. The Company shall keep
copies of this Agreement and any notices given or received hereunder
available for inspection by the Holders during normal business hours at its
office.
(e) In the event the Company has completed a Public Offering, in
addition to and without limiting the rights of the Holder under the terms
hereof, at a Holder's option, a Warrant Certificate may be exercised by
being converted in whole or in part at any time or from time to time prior
to the Expiration Date for a number of shares of Common Stock having an
aggregate Specified Value on the date of such exercise equal to the
difference between (x) the Specified Value of the number of Warrant Shares
in respect of which such Warrant Certificate is then exercised and (y) the
aggregate Exercise Price for such shares in effect at such time. The
following equation illustrates how many Warrant Shares would then be issued
upon exercise pursuant to this Section 6(e):
X = [N <multiply> (CMV - PSP)] <divide> CMV
where:
CMV = Current Market Value per Warrant Share at date of exercise.
PSP = Per share Exercise Price at date of exercise.
N = Number of Warrant Shares in respect of which the Warrant
Certificate is being exercised by conversion.
X = Number of Warrant Shares issued upon exercise by conversion.
Upon any such exercise, the number of Warrant Shares purchasable upon
exercise of such Warrant Certificate shall be reduced by the number of
Warrant Shares so converted and, if a balance of purchasable Warrant Shares
remain after such exercise, the Company shall execute and deliver to the
Holder thereof a new Warrant Certificate for such balance of Warrant
Shares. No payment of any cash or other consideration to the Company shall
be required from the Holder of a Warrant in connection with any exercise
thereof by conversion pursuant to this Section 6(e). Such conversion shall
be effective upon the date of execution of the Stockholders' Agreement, if
required, and receipt by the Company of the original Warrant surrendered
for cancellation and a written request from the Holder thereof that the
conversion pursuant to this Section 6(e) be made, or at such later date as
may be specified in such request. No fractional shares arising out of the
above formula for determining the number of Warrant Shares issuable in such
conversion shall be issued, and the Company shall in lieu thereof make
payment to the Holder of cash in the amount of such fraction multiplied by
the Specified Value of a Warrant Share on the date of the conversion.
Section 7. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes and other governmental charges (excluding all foreign, federal
or state income, franchise, property, estate, inheritance, gift or similar
taxes) in connection with the issuance or delivery of the Warrants
hereunder, as well as all such taxes attributable to the initial issuance
or delivery of Warrant Shares upon the exercise of Warrants and payment of
the Exercise Price. The Company shall not, however, be required to pay any
tax that may be payable in respect of any subsequent transfer of the
Warrants or any transfer involved in the issuance and delivery of Warrant
Shares in a name other than that in which the Warrants to which such
issuance relates were registered, and, if any such tax would otherwise be
payable by the Company, no such issuance or delivery shall be made unless
and until the person requesting such issuance has paid to the Company the
amount of any such tax, or it is established to the reasonable satisfaction
of the Company that any such tax has been paid.
Section 8. ADJUSTMENT OF WARRANT NUMBER. The Warrant Number is
subject to adjustment from time to time upon the occurrence of the events
enumerated in, or as otherwise provided in, this Section 8. Anything
contained in this Section 8 notwithstanding, any adjustment made pursuant
to any provision of this Section 8 shall be made without duplication of an
adjustment otherwise required by and made pursuant to another provision of
this Section 8 on account of the same facts or events.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(i) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(ii) subdivides or reclassifies its outstanding shares of Common
Stock into a greater number of shares;
(iii)combines or reclassifies its outstanding shares of Common
Stock into a smaller number of shares;
(iv) makes a distribution on Common Stock in shares of its
capital stock other than Common Stock; or
(v) issues by reclassification of its Common Stock any shares of
its capital stock (other than reclassifications arising
solely as a result of a change in the par value or no par
value of the Common Stock);
then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital
stock of the Company which it would have owned immediately following such
action if such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the time of payment
or distribution, as appropriate, in the case of a dividend or distribution
and immediately after the effective date in the case of a subdivision,
combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur. If the occurrence of any event listed above results in
an adjustment under subsection (b) or (c) of this Section 8, no further
adjustment shall be made under this subsection (a). The Company shall not
issue shares of Common Stock as a dividend or distribution on any class of
capital stock other than Common Stock, unless the Holders also receive such
dividend or distribution on a ratable basis or the appropriate adjustment
to the Warrant Number is made under this Section 8.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes (and
receives no consideration therefor) any rights, options or warrants
(whether or not immediately exercisable) to holders of any class of its
Common Stock entitling them to purchase shares of Common Stock at a price
per share less than the Specified Value per share on the record date
relating to such distribution, the Warrant Number shall be adjusted in
accordance with the following formula:
W' = W <multiply> {(O + N) <divide> [O + [(N <multiply>
P) <divide> M]]}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date for any
such distribution.
O = the number of shares of Common Stock outstanding on the record
date for any such distribution.
N = the number of additional shares of Common Stock issuable upon
exercise of such rights, options or warrants.
P = the exercise price per share of such rights, options or warrants.
M = the Specified Value per share of Common Stock on the record date
for any such distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which
such rights, options or warrants are exercisable, not all rights, options
or warrants shall have been exercised, the adjusted Warrant Number shall be
immediately readjusted to what it would have been if "N" in the above
formula had been the number of shares actually issued; provided, however,
to the extent that any Warrants have been exercised prior to any such
readjustment, the number of Warrant Shares that have been delivered or the
number of Warrant Shares to be delivered pursuant to such exercise shall
not be subject to any readjustment. In any case in which this Section 8(b)
shall require that an adjustment in the Warrant Number be made effective
immediately after the record date for a specified event, the company may
elect to defer until the exercise of such rights, options or warrants
issuing to the Holder of any Warrant exercised after such record date the
number of Warrant Shares, if any, issuable upon such exercise over and
above the number of Warrant Shares, if any, issuable upon such exercise on
the basis of the Warrant Number in effect prior to such adjustment;
provided, however, that the Company shall deliver to such Holder a due bill
or other appropriate instrument evidencing such Holder's right to receive
such additional Warrant Shares upon the exercise of such rights, options or
warrants.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to
all holders of any class of its Common Stock (i) any evidences of
indebtedness of the Company or any of its subsidiaries, (ii) any assets of
the Company or any of its subsidiaries, or (iii) any rights, options or
warrants to acquire any of the foregoing or to acquire any other Securities
of the Company, the Warrant Number shall be adjusted in accordance with the
following formula:
W' = W <multiply> [M <divide> (M - F)]
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
mentioned below.
M = the Specified Value per share of Common Stock on the record
date mentioned below.
F = the Specified Value on the record date mentioned below with
respect to any other Securities or the fair market value on
the record date mentioned below with respect to any
indebtedness, assets, rights, options or warrants
distributable to the holder of one share of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution. If an adjustment is made pursuant to this subsection (c) as a
result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable,
not all such rights, options or warrants shall have been exercised, the
adjusted Warrant Number shall be immediately readjusted as if "F" in the
above formula was the fair market value on the record date of the
indebtedness or assets actually distributed upon exercise of such rights,
options or warrants divided by the number of shares of Common Stock
outstanding on the record date; provided, however, to the extent that any
Warrants have been exercised prior to any such readjustment, the number of
Warrant Shares that have been delivered or the number of Warrant Shares to
be delivered pursuant to such exercise shall not be subject to any
readjustment. In any case in which this Section 8(c) shall require that an
adjustment in the Warrant Number be made effective immediately after the
record date for a specified event, the company may elect to defer until the
exercise of such rights, options or warrants issuing to the Holder of any
Warrant exercised after such record date the number of Warrant Shares, if
any, issuable upon such exercise over and above the number of Warrant
Shares, if any, issuable upon such exercise on the basis of the Warrant
Number in effect prior to such adjustment; provided, however, that the
Company shall deliver to such Holder a due bill or other appropriate
instrument evidencing such Holder's right to receive such additional
Warrant Shares upon the exercise of such rights, options or warrants.
This subsection does not apply to any transaction described in
subsection (a) of this Section 8 or to rights, options or warrants referred
to in subsection (b) or (d) of this Section 8.
Such fair market value shall be determined in good faith by the by the
board of directors of the Company, whose determination shall be described
in a duly adopted resolution certified by the Company's Secretary or
Assistant Secretary, which determination shall be final and binding upon
the Holders.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE. If the Company issues shares
of Common Stock (including treasury shares) for a consideration per share
less than the Specified Value per share on the date the Company fixes the
offering price of such additional shares, the Warrant Number shall be
adjusted in accordance with the following formula:
W' = W <multiply> {A <divide> [O + (P <divide> M)]}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares of Common Stock.
P = the aggregate consideration received for the issuance of such
additional shares of Common Stock.
M = the Specified Value per share of Common Stock on the date of
issuance of such additional shares.
A = the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares of Common Stock.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to any of the transactions
described in subsection (a) of this Section 8 or the issuances described
below:
(i) The issuance of Common Stock upon the conversion, exercise
or exchange of any Convertible Securities (as defined
below), including the Warrants, outstanding on the date
hereof or for which an adjustment has been made pursuant to
this Section 8; or
(ii) (A) The grant of rights to purchase shares of Common Stock
and the issuance of such shares of Common Stock upon
exercise of such rights, to directors, members of management
or employees of the Company and its subsidiaries pursuant to
management incentive plans, employee incentive plans, stock
option and stock purchase plans or agreements adopted by the
board of directors of the Company and (B) following the
acquisition by the Company of any of the rights or shares
referred to in clause (A) the reissuance of any such
acquired rights and the issuance of shares of Common Stock
upon exercise thereof and (C) the grant of any rights under
a phantom stock plan, stock appreciation rights plan or
other deferred compensation plan to officers, directors or
employees of the Company and its subsidiaries.
(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company
issues any options, warrants or other securities convertible into or
exchangeable or exercisable for Common Stock ("Convertible Securities")
(other than securities issued in transactions described in subsection (b)
or (c) of this Section 8) for a consideration per share of Common Stock
deliverable upon conversion, exchange or exercise of such securities less
than the Specified Value per share on the date of issuance of such
securities, the Warrant Number shall be adjusted in accordance with the
following formula:
W' = W <multiply> {(O + D) <divide> [O + (P <divide>
M)]}
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the sum of the aggregate consideration received for the issuance
of such securities and the aggregate minimum consideration
receivable by the Company for issuance of Common Stock upon
conversion or in exchange for, or upon exercise of, such
securities.
M = the Specified Value per share of Common Stock on the date of
issuance of such securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion or in exchange for or upon exercise of such securities
at the initial conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when the conversion,
exchange or exercise rights of such securities have expired or been
terminated, then the adjusted Warrant Number shall promptly be readjusted
to the adjusted Warrant Number which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of
the actual number of shares of Common Stock issued upon conversion,
exchange or exercise of such securities. If the aggregate minimum
consideration receivable by the Company for issuance of Common Stock upon
conversion or in exchange for, or upon exercise of, such securities shall
be increased or decreased by virtue of provisions therein contained or upon
the arrival of a specified date or the happening of a specified event, then
the Warrant Number shall promptly be readjusted to the Warrant Number which
would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of such increased or decreased minimum
consideration. To the extent that any Warrants have been exercised prior
to any such readjustment, the number of Warrant Shares that have been
delivered or the number of Warrant Shares to be delivered pursuant to such
exercise shall not be subject to any readjustment. In any case in which
this Section 8(e) shall require that an adjustment in the Warrant Number be
made effective immediately after any such issuance, the company may elect
to defer until the conversion, exchange or exercise of such securities
issuing to the Holder of any Warrant exercised after such record date the
number of Warrant Shares, if any, issuable upon such exercise over and
above the number of Warrant Shares, if any, issuable upon such exercise on
the basis of the Warrant Number in effect prior to such adjustment;
provided, however, that the Company shall deliver to such Holder a due bill
or other appropriate instrument evidencing such Holder's right to receive
such additional Warrant Shares upon the conversion, exchange or exercise of
such securities.
This subsection (e) does not apply to the issuance of the Warrants or
to any of the transactions described in paragraph (b) of this Section 8 or
excluded from the provisions of paragraph (d) of this Section 8.
(f) CONSIDERATION RECEIVED. For purposes of any computation
respecting consideration received pursuant to subsections (d) and (e) of
this Section 8, the following shall apply:
(i) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash
(without any deduction being made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith);
(ii) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof (irrespective of the accounting
treatment thereof) as determined in good faith by the board
of directors of the Company; and
(iii)in the case of the issuance of options, warrants or other
securities convertible into or exchangeable or exercisable
for shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities
plus the additional minimum consideration, if any, to be
received by the Company upon the conversion, exchange or
exercise thereof (the consideration in each case to be
determined in the same manner as provided in clauses (i) and
(ii) of this subsection).
(g) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Warrant Number need be made unless the adjustment would require an increase
or decrease of at least 1% in the Warrant Number. Any adjustment that is
not made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the
date on which a Warrant is exercised. All calculations under this Section
8 shall be made to the nearest 1/100th of a share.
(h) WHEN NO ADJUSTMENT REQUIRED. If an adjustment is made upon the
establishment of a record date for a distribution subject to subsection
(a), (b) or (c) of this Section 8 and such distribution is subsequently
canceled, the Warrant Number then in effect shall be readjusted, effective
as of the date when the board of directors of the Company determines to
cancel such distribution, to that which would have been in effect if such
record date had not been fixed. To the extent the Warrants become
convertible into cash, no adjustment need be made thereafter as to the
amount of cash into which such Warrants are exercisable. Interest will not
accrue on the cash.
(i) REORGANIZATIONS. Except as set forth below, in case of any
capital reorganization, other than in the cases referred to in subsections
(a), (b), (c), (d), (e) or (f) of this Section 8, or the consolidation or
merger of the Company with or into another corporation (other than a merger
or consolidation in which the Company is the continuing corporation and
which does not result in any reclassification of the outstanding shares of
Common Stock into shares of other stock or other securities or property),
or the sale, transfer or other disposition of all or substantially all of
the property of the Company (collectively, such actions being hereinafter
referred to as "Reorganizations"), then each Holder of Warrants which are
exercisable, shall have the right to receive notice from the Company of
such Reorganization at least thirty (30) days prior to the closing date of
such Reorganization, which notice shall include a copy of the operative
Reorganization documents or a summary of their operative terms.
Thereafter, the Holders of exercisable Warrants shall have until ten (10)
days prior to the closing date of the Reorganization, to exercise such
Warrants and participate in such Reorganization on the terms negotiated by
the Company. If such exercisable Warrants are not then exercised, such
Warrants, and, in any event, all Warrants that are not then exercisable,
shall terminate as of the closing date of such Reorganization. If the
Company merges with or into any Person in a stock-for-stock merger, upon
consummation of such transaction the Warrants shall automatically become
exercisable for the kind and amount of securities which the Holder of a
Warrant would have owned immediately after the merger if the Holder had
exercised the Warrant immediately before the effective date of the
transaction. Concurrently with the consummation of such merger, the
corporation formed by or surviving any such merger, if other than the
Company, shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Agreement and
shall enter into a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section. The successor
Company shall mail to Warrant holders a notice describing the supplemental
Warrant Agreement.
(j) FORM OF WARRANTS. Irrespective of any adjustments in the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
(k) MISCELLANEOUS. In case at any time or from time to time the
Company shall take any action in respect of its Common Stock, other than
any action described in this Section 8, then the number of shares of Common
Stock for which this Warrant is exercisable shall be adjusted in such
manner as may be equitable in the circumstances. For purpose of this
Section 8 the term "shares of Common Stock" shall mean (i) shares of any
class of stock designated as common stock of the Company as of the date of
this Agreement, (ii) shares of any other class of stock resulting from
successive changes or reclassification of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par
value to par value and (iii) shares of common stock of the Company or
options, warrants or rights to purchase common stock of the Company or
evidences of indebtedness, shares of stock or securities convertible into
or exchangeable for shares of common stock of the Company outstanding on
the date hereof and shares of common stock of the Company issued upon
exercise, conversion or exchange of such securities. In the event that at
any time, as a result of an adjustment made pursuant to this Section 8, the
Holders of Warrants shall become entitled to purchase any securities of the
Company other than, or in addition to, shares of Common Stock, thereafter
the number or amount of such other securities so purchasable upon exercise
of each Warrant 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 Warrant Shares contained in subsections (a) through (k)
of this Section 8, inclusive, and the provisions of Sections 4, 5, 6 and 11
hereof with respect to the Warrant Shares or the Common Stock shall apply
on like terms to any such other securities.
Section 9. NOTICES TO HOLDERS. Upon any adjustment pursuant to
Section 8 hereof, the Company shall thereafter (a) cause to be filed with
the Company a certificate signed by the principal financial officer of the
Company setting forth the Warrant Number after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon
which such calculations are based, and (b) cause to be given to each of the
Holders at its address appearing on the Warrant Register written notice of
such adjustments. Where appropriate, such notice may be given in advance
and included as a part of the notice required to be mailed under the other
provisions of this Section 9.
In case:
(i) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;
(ii) the Company shall authorize the distribution to all holders of
shares of Common Stock of assets, including cash, evidences of its
indebtedness, or other securities;
(iii) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the conveyance or transfer all or substantially all of the properties
and assets of the Company, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of Common Stock; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be given to each of the Holders at its
address appearing on the Warrant Register, at least 15 days prior to the
applicable record date hereinafter specified, or the date of the event in
the case of events for which there is no record date, in accordance with
the provisions of Section 18 hereof, a written notice stating (A) the date
as of which the holders of record of shares of Common Stock to be entitled
to receive any such rights, options, warrants or distribution are to be
determined, or (B) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (C) the date on
which any such consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or consummated,
and the date as of which it is expected that holders of record of shares of
Common Stock shall be entitled to exchange such shares for securities or
other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up. The failure to give the notice required by this Section 9 or
any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any
action.
Section 10. REDEMPTION.
(a) The Series A Warrants, Series B Warrants, Series C Warrants
and/or Series D Warrants may be redeemed, at the option of the Company, as
a whole series and not in part, at any time after they become exercisable
and prior to the Expiration Date, at the office of the Company maintained
pursuant to Section 18 hereof, at the price of $0.01 per Warrant
("Redemption Price"), provided that the Common Stock has been registered
under the Exchange Act, and provided further that the Closing Price of the
Common Stock has been at least one hundred and seventy-five percent (175%)
of the Exercise Price on each of the thirty (30) consecutive trading days
ending on the third business day prior to the date on which notice of
redemption is given, the satisfaction of which condition shall be certified
by the Company, and provided further, that with respect to Warrants held by
Forman, he is entitled to exercise a demand registration with respect to
the underlying shares of Common Stock pursuant to Section 2(d) of the
Registration Rights Agreement.
(b) In the event the Company shall elect to redeem all of one or more
series of Warrants, the Company shall fix a date for redemption. Notice of
redemption shall be mailed by the Company in accordance with Section 19
hereof not less than thirty (30) days prior to the date fixed for
redemption to the registered Holders of the Warrants to be redeemed.
(c) The Warrants to be redeemed may be exercised in accordance with
Section 6 of this Agreement at any time after notice of redemption shall
have been given by the Company pursuant to Section 10(b) hereof and prior
to the time and date fixed for redemption. On and after the redemption
date, the Holder of Warrants to be redeemed shall have no further rights
except to receive, upon surrender of such Warrants to be redeemed, the
Redemption Price.
Section 11. RESERVATION OF WARRANT SHARES. The Company shall at all
times reserve and keep available, free from preemptive rights (except as
otherwise provided herein), out of the aggregate of its authorized but
unissued Common Stock or its authorized and issued Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants, but such shares of Common Stock shall be subject to
the terms and conditions of the Stockholders' Agreement.
The Company or, if appointed, the transfer agent for the Common Stock
and each transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of the Warrants (collectively, the
"Transfer Agent") will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company shall keep a copy of this Agreement on file with any
such Transfer Agent. The Company will supply any such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise
make available all other consideration that may be deliverable upon
exercise of the Warrants. The Company will furnish any such Transfer Agent
a copy of all notices of adjustments and certificates related thereto,
transmitted to each Holder pursuant to Section 9 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 8 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue duly authorized, fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants will, upon payment of the Exercise Price
therefor and issue thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights (except as may be granted by this
Agreement) and free, subject to Section 7 hereof, from all taxes, liens,
charges and security interests with respect to the issue thereof, but such
Warrant Shares shall be subject to the terms and conditions of the
Stockholders' Agreement.
Section 12. FRACTIONAL INTERESTS. The Company shall not be required
to issue fractional Warrant Shares 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 Warrant Shares which shall be
issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants
so presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 12, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall pay an amount in cash
equal to the Specified Value of the Warrant Share so issuable multiplied by
such fraction.
Section 13. MUTILATED OR MISSING WARRANT CERTIFICATES. If a mutilated
Warrant Certificate is surrendered to the Company, or if the Holder of a
Warrant Certificate claims and submits an affidavit or other evidence
satisfactory to the Company to the effect that the Warrant Certificate has
been lost, destroyed or wrongfully taken, the Company shall issue a
replacement Warrant Certificate. If required by the Company such Holder
must provide an indemnity bond, or other form of indemnity, sufficient in
the judgment of the Company to protect the Company from any loss which it
may suffer if a Warrant Certificate is replaced. If any institutional
Holder (or nominee thereof) is the owner of any such lost, stolen or
destroyed Warrant Certificate, then the affidavit of an authorized officer
of such owner, setting forth the fact of loss, theft or destruction and of
its ownership of the Warrant Certificate at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no
further indemnity shall be required as a condition to the execution and
delivery of a new Warrant Certificate other than the unsecured written
agreement of such owner to indemnify the Company or, at the option of such
institutional Holder, an indemnity bond in the amount of the Specified
Value of the Warrant Shares for which such Warrant Certificate was
exercisable.
Section 14. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS. In
the case of all dividends or other distributions by the Company to the
Holders of its Common Stock with respect to which any provision of Section
8 refers to the taking of a record of such Holders, the Company will in
each such case take such a record and will take such record as of the close
of business on a business day. The Company will not at any time, except
(a) upon dissolution, liquidation or winding up, or (b) for purposes of
declaring and paying a dividend or matters related to voting by
stockholders of the Company, close its stock transfer books or the Warrant
Register so as to result in preventing or delaying the exercise or transfer
of any Warrant.
Section 15. LIMITATION OF LIABILITY. No provision hereof in the
absence of affirmative action by the Holder of a Warrant to purchase shares
of Common Stock, and no mere enumeration herein of the rights or privileges
of a Holder, shall give rise to any liability of such Holder for the
Exercise Price or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.
Section 16. RIGHTS OF THE HOLDER. Nothing contained in this Agreement
or in any Warrant Certificate shall be construed as conferring upon the
Holders, prior to the exercise of such Warrants, any rights of a
stockholder in the Company, either at law or in equity, and the rights of
the Holders are limited to those expressed in this Agreement.
Section 17. COMPANY INFORMATION. The Company agrees that so long as
any Warrants remain outstanding and so long as the Company shall not have
registered any of its securities pursuant to Section 12 of the Exchange
Act, or filed a registration statement pursuant to the requirements of the
Securities Act, the Holders will be entitled to receive, upon written
request, the same financial information as made available to the holders of
common stock pursuant to the Stockholders' Agreement.
Section 18. OFFICE OF THE COMPANY. As long as any of the Warrants
remains outstanding, the Company shall maintain an office in New Orleans,
Louisiana where the Warrants may be presented for exercise, transfer,
division or combination as provided for herein. Such office shall be
located at 650 Poydras Street, Suite 2200, New Orleans, Louisiana 70130,
unless and until the Company shall designate and maintain some other office
for such purposes and give written notice thereof to the Holders of all
outstanding Warrants.
Section 19. NOTICES TO THE COMPANY AND HOLDERS. All notices and other
communications provided for or permitted hereunder shall be in writing and
shall be made by hand-delivery, first-class mail, facsimile or overnight
air courier guaranteeing next day delivery addressed to the Company at its
principal office located at 650 Poydras Street, Suite 2200, New Orleans,
Louisiana 70130 (facsimile no.: 504-522-1796) and to each of the Holders
at its address appearing on the Warrant Register. All such notices and
communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed (so long as a fax copy is
sent and receipt acknowledged within two business days after mailing);
when receipt acknowledged, if faxed; and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery. The parties and Holders may change the addresses to which
notices are to be given by giving five days' prior written notice of such
change in accordance herewith.
Section 20. CERTAIN SUPPLEMENTS AND AMENDMENTS; AMENDMENTS AND
WAIVERS.
(a) The Company may from time to time supplement or amend this
Agreement without the approval of any Holders in order to cure any
ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising
hereunder which the Company may deem necessary or desirable; provided that
any such supplement or amendment shall not in any way adversely affect the
interests of the Holders.
(b) This Agreement may be amended by the affirmative vote of Holders
holding Warrants to purchase not less than two-thirds of the Warrant Shares
purchasable pursuant to all of the then outstanding Warrants; provided
that, except as expressly provided herein, the Agreement may not be
amended, without the consent of each Holder whose rights would be affected
by such amendment, to change (i) any price at which the Warrant may be
exercised, (ii) the period during which the Warrant may be exercised, (iii)
the number or type of securities to be issued upon the exercise thereof or
(iv) the provisions of this Section 20; and provided further that the
Agreement may not be amended to provide for the issuance of additional
warrants to purchase shares of the Company's Common Stock without the
consent of each Warrant Holder.
(c) The Company agrees it will not solicit, request or negotiate for
or with respect to any proposed waiver or amendment of any of the
provisions of this Agreement or any Warrant unless each Holder
(irrespective of the amount of Warrants then owned by it) shall
substantially concurrently be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by
the Company with sufficient information (including any offer of
remuneration) to enable it to make an informed decision with respect
thereto which information shall be the same as that supplied to each other
Holder. The Company will not directly or indirectly, pay or cause to be
paid any remuneration whether by way of supplement or additional interest
fee or otherwise, to any Holder as consideration for or as an inducement to
the entering into by any Holder of any waiver or amendment of any of the
terms and provisions of this Agreement or any Warrant unless such
remunerations is concurrently paid on the same terms, ratably to each
Holder whether or not such Holder signs such waiver or consent, provided
that the foregoing is not intended to preclude the adoption of any
amendment or the giving of any waiver by the Holders of a majority of the
Warrant Shares purchasable pursuant to all of the then outstanding
Warrants, to the extent permitted by the other provisions of this Section
20.
Section 21. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
AND ALL ISSUES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW); PROVIDED THAT DETERMINATIONS RELATING TO
CORPORATE LAW SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE. TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY
OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE WARRANTS, AND IRREVOCABLY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER OF
A WARRANT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section 22. ENTIRE AGREEMENT. This Agreement, together with the
Stockholders' Agreement and the Registration Rights Agreement dated as of
the date hereof, by and among the Company and the parties thereto (the
"Registration Rights Agreement") constitute the entire agreement and
understanding of the parties hereto and respective of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants, or undertakings with respect to the subject matter
hereof, other than expressly set forth or referred to herein or therein.
This Agreement, the Stockholders' Agreement and the Registration Rights
Agreement supersede all prior agreements and understandings between the
parties hereto with respect to the subject matter hereof.
Section 23. MISCELLANEOUS.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the parties, and their respective successors and assigns,
including but not limited to the heirs and legatees of Forman.
(b) Section headings are inserted for convenience only and do not
form a part of this Agreement.
(c) This Agreement shall terminate if all Warrants have been
exercised pursuant to this Agreement.
(d) Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company and the Holders any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company and the Holders.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
* * * * * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
FORMAN PETROLEUM COMPANY
By: /s/ McLain J. Forman
---------------------------------
Name: McLain J. Forman
Title: CEO
TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
TCW/CRESCENT MEZZANINE INVESTMENT
PARTNERS, L.P.
By: TCW/Crescent Mezzanine, L.L.C.,
its General Partner or Managing
Director
By: /s/ Nicholas W. Tell, Jr.
---------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Darryl L. Schall
---------------------------------
Name: Darryl L. Schall
Title: Senior Vice President
TCW SHARE OPPORTUNITY FUND II, L.P.
By: TCW Asset Management Company,
its Investment Manager
By: /s/ Nicholas W. Tell, Jr.
---------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: /s/ Darryl L. Schall
---------------------------------
Name: Darryl L. Schall
Title: Senior Vice President
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisors (Bermuda), Ltd.,
As General Partner
By: /s/ Nicholas W. Tell, Jr.
---------------------------------
Name: Nicholas W. Tell, Jr.
Title: Managing Director
By: TCW Investment Management Company,
As Investment Advisor
By: /s/ Darryl L. Schall
---------------------------------
Name: Darryl L. Schall
Title: Senior Vice President
JEFFERIES & COMPANY, INC.
By: /s/ Jerry M. Gluck
---------------------------------
Name: Jerry M. Gluck
Title: Executive Vice President
BANKAMERICA INVESTMENT CORP.
By: /s/ P.F. Van Winkle
---------------------------------
Name: P.F. Van Winkle
Title: Attorney-in-Fact
KOCH INDUSTRIES, INC.
By: /s/ James R. McBride
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Name: James R. McBride
Title:
/s/ McLain J. Forman
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McLain J. Forman
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Type or Print Name of Beneficial Holder
By:
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Name:
Its:
Address:
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EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
JANUARY 14, 2000, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD OR
OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT, OR IN COMPLIANCE WITH RULE 144 OR PURSUANT TO ANOTHER EXEMPTION
THEREFROM. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
WARRANT AGREEMENT AND A STOCKHOLDERS' AGREEMENT DATED AS OF JANUARY14, 2000,
AMONG THE ISSUER OF SUCH SECURITIES AND THE OTHER PARTIES THERETO. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CONDITIONS SPECIFIED IN SUCH
AGREEMENTS AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF THIS
CERTIFICATE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. A COPY OF SUCH AGREEMENTS WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
THE SHARES ISSUABLE UPON EXERCISE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED
EXCEPT IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE SECURITIES ACT, OR IN COMPLIANCE WITH RULE 144 OR PURSUANT
TO ANOTHER EXEMPTION THEREFROM AND ARE ALSO SUBJECT TO THE RESTRICTIONS
SPECIFIED IN THE STOCKHOLDERS' AGREEMENT.
No. _____ ______ Series ___ Warrants
SERIES ___ WARRANT CERTIFICATE
FORMAN PETROLEUM CORPORATION
This Series ___ Warrant Certificate certifies that
___________________________, or registered assigns, is the registered holder
of the number of Series ___ Warrants (the "Warrants") set forth above to
purchase Common Stock, no par value (the "Common Stock"), of Forman
Petroleum Corporation, a Louisiana corporation (the "Company"). Each Warrant
entitles the holder upon exercise to receive from the Company one fully paid
and nonassessable share of Common Stock (a "Warrant Share"), at the initial
exercise price per share (the "Exercise Price") of $_____, payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate, execution of the Stockholders' Agreement and payment of the
Exercise Price at the office of the Company designated for such purpose, but
only subject to the conditions set forth herein and in the Warrant Agreement
referred to hereinafter. The number of Warrant Shares issuable upon exercise
of the Warrants are subject to adjustment upon the occurrence of certain
events, as set forth in the Warrant Agreement. Each Warrant is exercisable
at any time prior to 5:00 p.m., New York time, on January 14, 2007.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, and are issued or to be issued pursuant to a
Warrant Agreement dated as of January 14, 2000 (the "Warrant Agreement"),
duly executed and delivered by the Company, 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 Company and the holders
(the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Capitalized terms used and not defined herein shall have the meaning
ascribed thereto in the Warrant Agreement.
The holder hereof may exercise the Warrants evidenced hereby under and
pursuant to the terms and conditions of the Warrant Agreement by
surrendering this Warrant Certificate, with the form of election to purchase
set forth hereon (and by this reference made a part hereof) properly
completed and executed, and, to the extent the Warrants are not being
exchanged pursuant to the Warrant exchange provisions of Section 6 of the
Warrant Agreement, together with payment of the Exercise Price in cash or by
certified or bank check at the office of the Company designated for such
purpose. Prior to the issuance and delivery of any Warrant Shares upon the
exercise of the Warrants represented hereby, the holder hereof will be
required to execute the Stockholders' Agreement, unless the holder is
already a party to the Stockholders' Agreement. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall
be less than the total number of Warrants evidenced hereby, there shall be
issued by the Company to the holder hereof or its registered assignee a new
Warrant Certificate evidencing the number of Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of certain
events, the number of Warrant Shares issuable upon exercise of a Warrant set
forth on the face hereof may, subject to certain conditions, be adjusted.
The holder hereof will have certain registration rights and other
rights and obligations with respect to the Warrant Shares as provided in the
Registration Rights Agreement dated as of January 14, 2000 by and among the
Company and the persons party thereto. Copies of the Registration Rights
Agreement may be obtained by the holder hereof upon written request to the
Company.
Warrant Certificates, when surrendered at the office of the Company by
the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Subject to the terms and conditions of the Warrant Agreement, upon due
presentation for registration of transfer of this Warrant Certificate at the
office of the Company a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall
be issued to the transferee(s) 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 may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed by its Chief Executive Officer or Vice President and by its
Secretary or Assistant Secretary.
Dated: ______________
FORMAN PETROLEUM CORPORATION
By:
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Name:
Title:
By:
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Name:
Title:
FORM OF ELECTION TO PURCHASE
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to:
(Check Applicable Box)
<square>receive _____________ shares of Common Stock and herewith
tenders payment for such shares to the order of Forman Petroleum
Corporation in the amount of $____________ in accordance with the
terms hereof.
<square>exchange Warrants to purchase ____________ shares of Common
Stock as payment for such number of shares of Common Stock as
determined in accordance with the Warrant exchange procedures of
Section 6 of the Warrant Agreement.
The undersigned requests that a certificate for such shares be
registered in the name of _________________________, whose address
is__________________________________ and that such shares be delivered to
__________________, whose address is____________________________.
If said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered
in the name of _____________________________, whose address is
________________________________________, and that such Warrant Certificate
be delivered to_______________________, whose address is
_________________________________________.
Signature(s):
____________________________________
____________________________________
NOTE: The above signature(s) must correspond with the name written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever. If this Warrant is held of record by
two or more joint owners, all such owners must sign.
Date: _____________
FORM OF ASSIGNMENT
(To Be Signed Only Upon Assignment of Warrant Certificate)
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto _________________________ whose address is
_________________________________________ and whose social security number
or other identifying number is ____________________, the within Warrant
Certificate, together with all right, title and interest therein and to the
Warrants represented thereby, and does hereby irrevocably constitute and
appoint ____________________________, attorney, to transfer said Warrant
Certificate on the books of the within-named corporation, with full power of
substitution in the premises.
Signature(s):
____________________________________
____________________________________
NOTE: The above signature(s) must correspond with the name written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever. If this Warrant is held of record by
two or more joint owners, all such owners must sign.
Date: ______________