WARRANT AGREEMENT
between
EMPIRE GAS CORPORATION
and
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
Warrant Agent
_________________________
Dated as of June __, 1994
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of June ___, 1994 (this "AGREEMENT")
between Empire Gas Corporation, a Missouri corporation (the "Company"), and
Shawmut Bank Connecticut, National Association, a National Banking Association,
as warrant agent (the "WARRANT AGENT").
Pursuant to the terms of an Underwriting Agreement dated as of June
___, 1994 between the Company and Morgan Stanley & Co. Incorporated, as
Purchaser (the "UNDERWRITING AGREEMENT"), the Company has agreed to issue and
sell ______ units (the "UNITS"). Each Unit will consist of (i) __ Senior
Secured Notes, each Senior Secured Note having a principal amount at maturity of
$1,000 (the "SENIOR SECURED NOTES"), to be issued pursuant to the provisions of
an Indenture dated as of June ___, 1994 between the Company, each of the
Subsidiary Guarantors (as defined therein) and Shawmut Bank Connecticut,
National Association, as trustee, and (ii) _____ warrants (each, a "WARRANT") of
the Company, each Warrant entitling the registered owner thereof, subject to
the terms and conditions set forth herein, to purchase one share of Common
Stock, $.001 par value per share, of the Company (the "COMMON STOCK") at an
initial purchase price of $7.00 per share. The Senior Secured Note and the
Warrants included in each Unit will become separately transferable at the close
of business on December __, 1994.
In consideration of the foregoing and of the agreements contained in
the Underwriting Agreement and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company and the record holders thereof (the "HOLDERS"), the Company and
the Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by, or under direct or indirect common
control with such specified Person. For purposes of this defini-
tion, "control," when used with respect to any Person means the power to direct
the management and 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.
"Agent Members" has the meaning specified in Section 8.2.
"Business Day" means any day which is not a Saturday, a Sunday, or a
day on which banking institutions are not required to be open in the State of
New York or the State in which the principal corporate trust office of the
Warrant Agent is located.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock of the Company and any other
capital stock of the Company into which such common stock may be converted or
reclassified or that may be issued in respect of, in exchange for, or in
substitution of, such common stock by reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Company" has the meaning specified in the preamble to this Agreement.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Default" has the meaning specified in Article X.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" has the meaning specified in Section 3.1.
"Expiration Date" means June __, 2004.
"Final Surrender Date" has the meaning specified in Section 3.4(b).
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"Financial Expert" means a nationally recognized investment banking
firm.
"Global Warrant" has the meaning specified in Section 2.1.
"Holders" has the meaning specified in the recitals to this Agreement.
"Independent Financial Expert" means a Financial Expert which does not
(or whose directors, executive officers or 5% stockholders do not) have a direct
or indirect financial interest in the Company or any of its subsidiaries, which
has not been for at least five years, and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of its directors,
executive officers or 5% stockholders is) a promoter, director, or officer of
the Company or any of its subsidiaries. The Independent Financial Expert may be
compensated and indemnified by the Company for opinions or services it provides
as an Independent Financial Expert.
"Lindsey Entity" means Paul S. Lindsey, Jr., Kristen L. Lindsey, any
member of their family and any Person or which any or the foregoing Persons are
Affiliates.
"Notice Date" has the meaning specified in Section 3.4(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity.
"Physical Security" has the meaning specified in Section 2.1.
"Plaster Entity" means Robert W. Plaster, Stephen R. Plaster, any
member of such individual's family, and any Person of which any of the foregoing
Persons are Affiliates.
"Relevant Value" means the value of the Warrants as set forth in the
Value Report in accordance with Section 3.4(d).
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"Repurchase Event" means, and shall be deemed to occur if at any time
prior to June __, 2004 the Company consolidates with, merges into or with (where
holders of the Common Stock receive consideration in exchange for all or part of
such shares of Common Stock), or sells all or substantially all of its assets
to, another Person which has a class of equity securities registered under the
Exchange Act, or a wholly owned subsidiary of such Person, if (i) the
consideration for such transaction does not consist solely of cash, (ii) such
merger or consolidation is not effected solely for the purpose of changing the
Company's state of incorporation or (iii) such transaction is effected with a
Plaster Entity or a Lindsey Entity.
"Repurchase Obligation" has the meaning specified in Section 10.2.
"Repurchase Offer" means the Company's offer to repurchase Warrants in
accordance with Section 3.4.
"Repurchase Price" means the amount of cash payable in respect of
Warrants surrendered pursuant to a Repurchase Offer determined in accordance
with Section 3.4(d).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Secured Notes" has the meaning specified in the recitals to
this Agreement.
"Separation Date" means the close of business on December __, 1994.
"Underwriter" has the meaning specified in the recitals to this
Agreement.
"Units" has the meaning specified in the recitals to this Agreement.
"Valuation Date" means the date five Business Days prior to the Notice
Date.
"Value Report" means the value report prepared by an Independent
Financial Expert in accordance with Section 3.4(d).
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"Warrant" has the meaning specified in the recitals to this Agreement.
"Warrant Agent" has the meaning specified in the preamble to this
Agreement.
"Warrant Certificate" has the meaning specified in Section 2.1.
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
SECTION 2.1 FORM OF WARRANT CERTIFICATES. Certificates representing
the Warrants (the "WARRANT CERTIFICATES") shall be substantially in the form
attached hereto as Exhibit A, shall be dated the date on which countersigned by
the Warrant Agent and shall have such insertions as are appropriate or required
or permitted by this Agreement and may have such letters, numbers or other marks
of identification and such legends and endorsements stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation pursuant thereto or with
any rule or regulation of any securities exchange on which the Warrants may be
listed, or to conform to usage.
The Warrants shall be issued initially in the form of a single
permanent global Warrant in registered form, substantially in the form set forth
in Exhibit A (the "GLOBAL WARRANT"), deposited with the Warrant Agent, as
custodian for the Depositary, duly executed by the Company and countersigned by
the Warrant Agent as hereinafter provided. The aggregate number of Warrants
represented by the Global Warrant may from time to time be increased or
decreased by adjustments made on the records of the Warrant Agent, as custodian
for the Depositary or its nominee, as hereinafter provided.
Warrants issued pursuant to Section 8.2 in exchange for an interest in
the Global Warrant shall be issued in the form of permanent Warrant Certificates
in registered form in substantially the form set forth in Exhibit A (the
"PHYSICAL SECURITY").
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The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Warrants may be listed, all as determined by the officers
executing such Warrant Certificates, as evidenced by their execution of such
Warrant Certificates.
SECTION 2.2 RESTRICTIVE LEGENDS. (A) Each Global Warrant shall
bear the following legend on the face thereof:
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR THE
WARRANT AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR REPURCHASE,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHER-
WISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN ARTICLE VIII OF THE WARRANT AGREEMENT.
(b) Prior to the Separation Date, each Warrant Certificate shall
bear the following legend on the face thereof:
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THE WARRANTS ARE INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS,
EACH OF WHICH CONSISTS OF(I) [ ] ___% SENIOR SECURED NOTES DUE 2004
OF EMPIRE GAS CORPORATION AND (II) _____ WARRANTS. PRIOR TO THE CLOSE
OF BUSINESS ON DECEMBER __, 1994, THE WARRANTS EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT
MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE SENIOR SECURED
NOTES ISSUED BY EMPIRE GAS CORPORATION IN CONNECTION HEREWITH.
SECTION 2.3 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Warrant
Certificates evidencing Warrants to purchase initially an aggregate of up to
_______ shares of Common Stock may be executed, on or after the date of this
Agreement, by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and deliver
such Warrant Certificates upon the order and at the direction of the Company to
the purchasers thereof on the date of issuance. The Warrant Agent is hereby
authorized to countersign and deliver Warrant Certificates as required by this
Section 2.3 or by Section 3.3, Section 3.4, Article VI or Article VIII hereof.
The Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President or a Vice
President, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be manually countersigned by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company whose signature shall have been placed upon any of the Warrant
Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may, nevertheless, be countersigned by the Warrant Agent
and issued and delivered with the same force and effect as though such person
had not ceased to be such officer of the Company.
7
ARTICLE III
EXERCISE PRICE; EXERCISE AND REPURCHASE OF WARRANTS
SECTION 3.1 EXERCISE PRICE. Each Warrant Certificate shall, when
countersigned by the Warrant Agent, entitle the Holder thereof, subject to the
provisions of this Agreement, to purchase one share of Common Stock for each
Warrant represented thereby at a purchase price (the "EXERCISE PRICE") of $7.00
per share, subject to adjustment as provided in Section 4.1 and Article V.
SECTION 3.2 EXERCISE; RESTRICTIONS ON EXERCISE. At any time after
the Separation Date and on or before the Expiration Date, all outstanding
Warrants may be exercised on any Business Day. Any Warrants not exercised by
5:00 pm., New York City time, on the Expiration Date shall expire and all rights
of the Holders of such Warrants shall terminate; PROVIDED, HOWEVER, that the
Warrants may expire and all rights of the Holders of such Warrants may terminate
pursuant to Section 4.1(i)(ii) in the event the Company merges or consolidates
with or sells all or substantially all of its property and assets to a Person
(other than an Affiliate of the Company) if the consideration payable to holders
of Common Stock in exchange for their Common Stock in connection with such
merger, consolidation or sale consists solely of cash or in the event of the
dissolution, liquidation or winding up of the Company.
SECTION 3.3 METHOD OF EXERCISE; PAYMENT OF EXERCISE PRICE. In order
to exercise all or any of the Warrants represented by a Warrant Certificate, the
Holder thereof must surrender for exercise the Warrant Certificate to the
Warrant Agent at its corporate trust office set forth in Section 12.5 herein,
with the Subscription Form set forth in the Warrant Certificate duly executed,
together with payment in full of the Exercise Price then in effect for each
share of Common Stock or other securities or property issuable upon exercise of
the Warrants as to which a Warrant is exercised; such payment may be made in
cash or by certified or official bank or bank cashier's check payable to the
order of the Company. All payments received upon exercise of Warrants shall be
delivered to the Company by the Warrant Agent as instructed in writing by the
Company. If less than all the Warrants represented by a Warrant Certificate are
exer-
8
cised, such Warrant Certificate shall be surrendered and a new Warrant Certifi-
cate of the same tenor and for the number of Warrants which were not exercised
shall be executed by the Company and delivered to the Warrant Agent and the
Warrant Agent shall countersign the new Warrant Certificate, registered in such
name or names as may be directed in writing by the Holder, and shall deliver the
new Warrant Certificate to the Person or Persons entitled to receive the same.
Upon exercise of any Warrants following surrender of a Warrant Certificate in
conformity with the foregoing provisions, the Warrant Agent shall cause the
Company to transfer promptly to or upon the written order of the Holder of such
Warrant Certificate appropriate evidence of ownership of any shares of Common
Stock or other securities or property (including money) to which it is entitled,
registered or otherwise placed in such name or names as may be directed in
writing by the Holder, and to deliver such evidence of ownership and any other
securities or property (including money) to the Person or Persons entitled to
receive the same, together with an amount in cash in lieu of any fraction of a
share as provided in Section 4.5; PROVIDED that the Holder of such Warrant shall
be responsible for the payment of any transfer taxes required as the result of
any change in ownership of such Warrants. Upon exercise of a Warrant or
Warrants the Warrant Agent is hereby authorized and directed to requisition from
any transfer agent of the Common Stock (and all such transfer agents are hereby
irrevocably authorized to comply with all such requests) certificates for the
necessary number of shares to which the Holder of the Warrant or Warrants may be
entitled. A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date of the surrender for exercise, as provided
above, of the Warrant Certificate representing such Warrant and, for all
purposes of this Agreement, the Person entitled to receive any shares of Common
Stock or other securities or property deliverable upon such exercise shall, as
between such Person and the Company, be deemed to be the Holder of such shares
of Common Stock or other securities or property of record as of the close of
business on such date and shall be entitled to receive, and the Warrant Agent
shall deliver to such Person, any money, shares of Common Stock or other
securities or property to which he would have been entitled had he been the
record holder on such date. Without limiting the foregoing, if, at the date
referred to above, the transfer books for the shares
9
of Common Stock or other securities purchasable upon the exercise of the
Warrants shall be closed, the certificates for the shares of Common Stock or
securities in respect of which such Warrants are then exercised shall be
issuable as of the date on which such books shall next be opened, and until such
date the Company shall be under no duty to deliver any certificate for such
shares of Common Stock or other securities; PROVIDED FURTHER that the transfer
books or records, unless required by law, shall not be closed at any one time
for a period longer than 20 days.
SECTION 3.4 REPURCHASE OFFERS. (a) NOTICE OF REPURCHASE EVENT.
Within five Business Days following the occurrence of a Repurchase Event, the
Company shall give notice to the Holders of the Warrants that such event has
occurred and will result in the Company making a Repurchase Offer.
(b) REPURCHASE OFFERS GENERALLY. Following the occurrence of a
Repurchase Event, the Company shall offer to purchase for cash all outstanding
Warrants pursuant to the provisions of this Section 3.4 (each a "REPURCHASE
OFFER"). The Company shall give notice of a Repurchase Offer in accordance with
Section 3.4(f). The date on which the Company gives any such notice is referred
to as a "NOTICE DATE". Each Repurchase Offer shall commence on the Notice Date
for such offer and shall expire at 5:00 p.m., New York City time on a date (the
"FINAL SURRENDER DATE") as specified in the notice provided for in Section
3.4(f) which date shall be at least 30 but not more than 60 calendar days after
such Notice Date. Once a Repurchase Event has occurred, there is no limit on
the number of Repurchase Offers the Company may make.
(c) REPURCHASE OFFERS. (i) In any Repurchase Offer, the Company
shall offer to purchase for cash at the Repurchase Price for such Repurchase
Offer all Warrants outstanding on the Notice Date for such offer that are
properly tendered to the Warrant Agent on or prior to the Final Surrender Date
for such Repurchase Offer.
(ii) Each Holder may, but shall not be obligated to, accept such
Repurchase Offer, by tendering to the Warrant Agent, on or prior to the
10
Final Surrender Date for such Repurchase Offer, the Warrant Certificates
evidencing the Warrants such Holder desires to have repurchased in such offer,
together with a completed Certificate for Surrender for Repurchase Offer
referred to in Section 3.4(f). A Holder may withdraw all or a portion of the
Warrants tendered to the Warrant Agent at any time prior to the Final Surrender
Date for such Repurchase Offer. If less than all the Warrants represented by a
Warrant Certificate shall be tendered, such Warrant Certificate shall be
surrendered and a new Warrant Certificate of the same tenor and for the number
of Warrants which were not tendered shall be executed by the Company and
delivered to the Warrant Agent and the Warrant Agent shall countersign the new
Warrant Certificate, registered in such name or names as may be directed in
writing by the Holder, and shall deliver the new Warrant Certificate to the
Person or Persons entitled to receive the same; PROVIDED that the Holder of such
Warrants shall be responsible for the payment of any transfer taxes required as
the result of any change in ownership of such Warrants.
(d) REPURCHASE PRICE. (i) The purchase price (the "REPURCHASE
PRICE") for each Warrant properly tendered to the Warrant Agent pursuant to a
Repurchase Offer shall be equal to the value (the "RELEVANT VALUE") on the
Valuation Date of the Common Stock and other securities or property of the
Company which would have been delivered upon exercise of Warrants had the
Warrants been exercised, less the Exercise Price then in effect.
(ii) The Relevant Value of the Common Stock and other securities or
property issuable upon exercise of all the Warrants, will be:
(I) If the Common Stock (or other securities) is registered
under the Exchange Act, deemed to be the average of the closing sales
prices of the Common Stock (or other securities) for the 20 consecu-
tive trading days immediately preceding such Valuation Date or, if the
Common Stock (or other securities) has been registered under the
Exchange Act for less than 20 consecutive trading days before such
11
date, then the average of the closing sales prices for all of the
trading days before such date for which closing sales prices are
available.
(II) If the Common Stock (or other securities) is not regis-
tered under the Exchange Act or if the value cannot be computed under
clause (I) above, equal to the value set forth in the Value Report (as
defined below) as determined by an Independent Financial Expert, which
shall be selected by the Board of Directors in accordance with Section
3.4(e), and retained on customary terms and conditions, using one or
more valuation methods that the Independent Financial expert, in its
best professional judgment, determines to be most appropriate but
without giving effect to any discount for lack of liquidity, the fact
that the Company has no class of equity registered under the Exchange
Act, or the fact that the shares of Common Stock and other securities
or property issuable upon exercise of the Warrants represent a minori-
ty interest in the Company. The Company shall cause the Independent
Financial Expert to deliver to the Company, with a copy to the Warrant
Agent, within 45 days of the appointment of the Independent Financial
Expert in accordance with Section 3.4(e), a value report (the "VALUE
REPORT") stating the Relevant Value of the Common Stock and other
securities or property of the Company, if any, being valued as of the
Valuation Date and containing a brief statement as to the nature and
scope of the examination or investigation upon which the determination
of Relevant Value was made. The Warrant Agent shall have no duty with
respect to the Value Report of any Independent Financial Expert,
except to keep it on file and available for inspection by the Holders.
The determination as to Relevant Value in accordance with the provi-
sions of this Section 3.4(d) shall be conclusive on all Persons. The
Independent Financial Expert shall consult with management of the
Company in order to allow management to comment on the proposed
Relevant Value prior to delivery to the Company of any
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Value Report of the Independent Financial Expert.
(e) SELECTION OF INDEPENDENT FINANCIAL EXPERT. If a Value Report is
required pursuant to Section 3.4(d)(ii)(II), the Board of Directors of the
Company shall select an Independent Financial Expert not more than five Business
Days following a Repurchase Event. Within two days after such selection of the
Independent Financial Expert, the Company shall deliver to the Warrant Agent a
notice setting forth the name of such Independent Financial Expert.
(f) NOTICE OF REPURCHASE OFFER. Each notice of a Repurchase Offer
given by the Company pursuant to Section 3.4(b) shall be given (i) if the
Relevant Value is determined pursuant to Section 3.4(d)(ii)(I), within ten
Business Days following the occurrence of the Repurchase Event or (ii) if the
Relevant Value is determined pursuant to Section 3.4(d)(ii)(II) within five
Business Days after the Company receives the Value Report with respect to such
offer. Such notice shall specify (i) the Final Surrender Date for such Repur-
chase Offer, (ii) the manner in which Warrants may be surrendered to the Warrant
Agent for repurchase by the Company, (iii) the Repurchase Price at which the
Warrants will be repurchased by the Company, (iv) if applicable, the name of the
Independent Financial Expert whose valuation of the Common Stock and other
securities or property was utilized in connection with determining such Repur-
chase Price and (v) that payment of the Repurchase Price will be made by the
Warrant Agent. Each such notice shall be accompanied by a Certificate for
Surrender for Repurchase Offer in substantially the form attached to the Warrant
Certificate and a copy of the Valuation Report.
(g) PAYMENT FOR WARRANTS. Upon surrender for repurchase of any
Warrants in conformity with the provisions of this Section 3.4, the Warrant
Agent shall thereupon promptly notify the Company of such surrender. On or
before the Final Surrender Date for any Repurchase Offer, the Company shall
deposit with the Warrant Agent funds sufficient to make payment for the Warrants
tendered to the Warrant Agent and not withdrawn. After receipt of such deposit
from the Company, the Warrant Agent shall make payment, by delivering a check in
such amount as is appropriate, to such Person or Persons as it
13
may be directed in writing by the Holder surrendering such Warrants, net of any
transfer taxes required to be paid in the event that the check is to be deliv-
ered to a Person other than the Holder.
(h) COMPLIANCE WITH LAWS. Notwithstanding anything contained in this
Section 3.4, if the Company is required to comply with laws or regulations in
connection with making any Repurchase Offer, such laws or regulations shall also
govern the making of such Repurchase Offer.
ARTICLE IV
ADJUSTMENTS
SECTION 4.1 ADJUSTMENTS. The Exercise Price and the number of shares
of Common Stock issuable upon exercise of each Warrant shall be subject to
adjustment from time to time as follows:
(a) STOCK DIVIDENDS; STOCK SPLITS; REVERSE STOCK SPLITS;
RECLASSIFICATIONS. In case the Company shall (i) pay a dividend or make any
other distribution with respect to its Common Stock in shares of any class or
series of its capital stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding Common Stock into a smaller number of
shares or (iv) issue any shares of its capital stock in a reclassification of
the Common Stock (other than a reclassification in connection with a merger,
consolidation or other business combination which will be governed by Section
4.1(i)), the number of shares of Common Stock purchasable upon exercise of each
Warrant immediately prior to the record date for such dividend or distribution
or the effective date of such subdivision, or combination or reclassification
shall be adjusted so that the Holder of each Warrant shall thereafter be
entitled to receive the kind and number of shares of Common Stock or other secu-
rities of the Company which such Holder would have been entitled to receive
after the happening of any of the events described above had such Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this Section 4.1(a) shall
become effective immediately after the effective date of
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such event retroactive to the record date, if any, for such event.
(b) RIGHTS; OPTIONS; WARRANTS. In case the Company shall issue
rights, options, warrants or convertible or exchangeable securities (other than
a convertible or exchangeable security subject to Section 4.1(a)) to all holders
of its Common Stock, entitling them to subscribe for or purchase Common Stock at
a price per share which is lower (at the record date for such issuance) than the
greater of (i) the then Current Market Value per share of Common Stock and (ii)
the Exercise Price, the number of shares of Common Stock thereafter purchasable
upon the exercise of each Warrant shall be determined by multiplying the number
of shares of Common Stock theretofore purchasable upon exercise of each Warrant
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the issuance of such rights, options,
warrants or convertible or exchangeable securities plus the number of additional
shares of Common Stock offered for subscription or purchase, and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
prior to the issuance of such rights, options, warrants or convertible or
exchangeable securities plus the number of shares which the aggregate offering
price of the total number of shares of Common Stock so offered would purchase at
the greater of (i) the then Current Market Value per share of Common Stock and
(ii) the Exercise Price. Such adjustment shall be made whenever such rights,
options, warrants or convertible or exchangeable securities are issued, and
shall become effective retroactively immediately after the record date for the
determination of shareholders entitled to receive such rights, options, warrants
or convertible or exchangeable securities.
(c) ISSUANCE OF COMMON STOCK AT LOWER VALUES. In case the Company
shall sell and issue shares of Common Stock, or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding shares, rights, options, warrants or
convertible or exchangeable securities issued in any of the transactions
described in Section 4.1(a) or (b)) at a price per share of Common Stock
(determined in the case of such rights, options, warrants or convertible or
exchangeable securi-
15
ties, by dividing (x) the total amount receivable by the Company in consid-
eration of the sale and issuance of such rights, options, warrants or convert-
ible or exchangeable securities, plus the total consideration payable to the
Company upon exercise, conversion or exchange thereof, by (y) the total number
of shares of Common Stock covered by such rights, options, warrants or convert-
ible or exchangeable securities) that is lower than the greater of (i) the Cur-
rent Market Value per share of the Common Stock in effect immediately prior to
such sale or issuance and (ii) the Exercise Price, then the number of shares of
Common Stock thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the date of such
sale or issuance and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at the
greater of (i) such Current Market Value per share of Common Stock and (ii) the
Exercise Price. For purposes of this Section 4.1(c), the shares of Common Stock
which the holder of any such rights, options, warrants or convertible or ex-
changeable securities shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such sale and issuance and
the consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the consideration or premiums
stated in such rights, options, warrants or convertible or exchangeable securi-
ties to be paid for the shares of Common Stock covered thereby. In case the
Company shall sell and issue shares of Common Stock or rights, options, warrants
or convertible or exchangeable securities containing the right to subscribe for
or purchase shares of Common Stock, for a consideration consisting, in whole or
in part, of property other than cash or its equivalent, then in determining the
"price per share of Common Stock" and the "consideration received by the
Company" for purposes of the first sentence of this Section 4.1(c), the Board of
Directors of the Company shall determine, in good faith, the fair value of said
property, which determination shall be evi-
16
denced by a resolution of the Board of Directors of the Company. In case the
Company shall sell and issue rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock together with one or more other securities as part of a unit at
a price per unit, then in determining the "price per share of Common Stock" and
the "consideration received by the Company" for purposes of the first sentence
of this Section 4.1(c), the Board of Directors of the Company shall determine,
in good faith, the fair value of the rights, options, warrants or convertible or
exchangeable securities then being sold as part of such unit.
(d) DISTRIBUTIONS OF DEBT, ASSETS, SUBSCRIPTION RIGHTS OR CONVERTIBLE
SECURITIES. In case the Company shall fix a record date for the making of a
distribution to all holders of shares of its Common Stock of evidences of its
indebtedness, assets, cash dividends or distributions (excluding dividends or
distributions referred to in Section 4.1(a) above and excluding distributions in
connection with the dissolution, liquidation or winding up of the Company which
will be governed by Section 4.1(i)(ii) below) or securities (excluding those
referred to in Section 4.1(a), Section 4.1(b) or Section 4.1(c) above), then in
each case the number of shares of Common Stock purchasable after such record
date upon the exercise of each Warrant shall be determined by multiplying the
number of shares of Common Stock purchasable upon the exercise of such Warrant
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Value per share of Common Stock immediately prior to
the record date for such distribution and the denominator of which shall be the
Current Market Value per share of Common Stock immediately prior to the record
date for such distribution less the then fair value (as determined in good faith
by the Board of Directors of the Company) of the portion of the assets, evidence
of indebtedness, cash dividends or distributions or securities so distributed
applicable to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of share-
holders entitled to receive such distribution.
17
(e) EXPIRATION OF RIGHTS, OPTIONS AND CONVERSION PRIVILEGES. Upon
the expiration of any rights, options, warrants or conversion or exchange
privileges that have previously resulted in an adjustment hereunder, if any
thereof shall not have been exercised, the Exercise Price and the number of
shares of Common Stock issuable upon the exercise of each Warrant shall, upon
such expiration, be readjusted and shall thereafter, upon any future exercise,
be such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options, warrants or
conversion or exchange rights and (ii) such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Company upon such
exercise plus the consideration, if any, actually received by the Company for
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange rights whether or not exercised; PROVIDED FURTHER that no such read-
justment shall have the effect of increasing the Exercise Price by an amount, or
decreasing the number of shares issuable upon exercise of each Warrant by a num-
ber, in excess of the amount or number of the adjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
(f) CURRENT MARKET VALUE. For the purposes of any computation under
this Article IV, the Current Market Value per share of Common Stock or of any
other security (herein collectively referred to as a "security") at any date
herein specified shall be:
(i) if the security is not registered under the Exchange Act,
the value of the security (1) most recently determined as of a date within
the six months preceding such date by an Independent Financial Expert
selected by the Company in accordance with the criteria for such valuation
set out in Section 3.4(d)(ii)(II), or (2) if no such determination shall
have been made within such six-month period or if the Company so chooses,
determined as of such date by an Independent Financial Expert selected by
the Company in accordance with the criteria for such valuation set out in
Section
18
3.4(d)(ii)(II); PROVIDED, HOWEVER, that in determining the value of the
Common Stock under Section 4.5, if the foregoing clause (1) shall not be
applicable, the Current Market Value per share of Common Stock shall be
determined in good faith by the Board of Directors of the Company, or
(ii) if the security is registered under the Exchange Act, deemed to
be the average of the daily market prices of the security for the 20 consecutive
trading days immediately preceding such date or, if the security has been
registered under the Exchange Act for less than 20 consecutive trading days
before such date, then the average of the daily market prices for all of the
trading days before such date for which daily market prices are available. The
market price for each such trading day shall be: (A) in the case of a security
listed or admitted to trading on any national securities exchange, the closing
sales price, regular way, on such day, or if no sale takes place on such day,
the average of the closing bid and asked prices on such day, (B) in the case of
a security not then listed or admitted to trading on any national securities
exchange, the last reported sale price on such day, or if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as
reported by a reputable quotation source designated by the Company, (C) in the
case of a security not then listed or admitted to trading on any national
securities exchange and as to which no such reported sale price or bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York
customarily published on each Business Day, designated by the Company, or, if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than 30
days prior to the date in question) for which prices have been so reported and
(D) if there are no bid and asked prices reported during the 30 days prior to
the date in question, the Current Market Value of the security shall be deter-
mined as if the security were not registered under the Exchange Act.
19
(g) DE MINIMIS ADJUSTMENTS. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the number
of shares of Common Stock purchasable upon the exercise of each Warrant;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 4.1(g)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be made to the nearest one-
thousandth of a share.
(h) ADJUSTMENT OF EXERCISE PRICE. Whenever the number of shares
of Common Stock purchasable upon the exercise of each Warrant is adjusted, as
herein provided, the Exercise Price per share of Common Stock payable upon
exercise of such Warrant shall be adjusted (calculated to the nearest $.0001) so
that it shall equal the price determined by multiplying such Exercise Price
immediately prior to such adjustment by a fraction the numerator of which shall
be the number of shares purchasable upon the exercise of each Warrant immediate-
ly prior to such adjustment and the denominator of which shall be the number of
shares so purchasable immediately thereafter.
(i) CONSOLIDATION, MERGER, ETC. Subject to the provisions of
Subsection (ii) below of this Section 4.1(i), in case of the consolidation of
the Company with, or merger of the Company with or into, or of the sale of all
or substantially all of the properties and assets of the Company to, any Person,
and in connection therewith consideration is payable to holders of Common Stock
(or other securities or property purchasable upon exercise of Warrants) in
exchange therefor, the Warrants shall remain subject to the terms and conditions
set forth in this Agreement and each Warrant shall, after such consolidation,
merger or sale, entitle the Holder to receive upon exercise the number of shares
of capital stock or other securities or property (including cash) of the
Company, or of such Person resulting from such consolidation or surviving such
merger or to which such sale shall be made or of the parent of such Person, as
the case may be, that would have been distributable or payable on account of the
Common Stock (or other securities or property pur-
20
chasable upon exercise of Warrants) if such Holder's Warrants had been exercised
immediately prior to such merger, consolidation or sale (or, if applicable, the
record date therefor); and in any such case the provisions of this Agreement
with respect to the rights and interests thereafter of the Holders of Warrants
shall be appropriately adjusted by the Board of Directors in good faith so as to
be applicable, as nearly as may reasonably be, to any shares of stock or other
securities or any property thereafter deliverable on the exercise of the
Warrants.
(ii) Notwithstanding the foregoing, (x) if the Company merges or
consolidates with, or sells all or substantially all of its property and assets
to, another Person (other than an Affiliate of the Company) and, in connection
therewith, consideration is payable to holders of Common Stock in exchange for
their Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of the dissolution, liquidation or
winding up of the Company, then the Holders of Warrants shall be entitled to
receive distributions on the date of such event on an equal basis with holders
of Common Stock (or other securities issuable upon exercise of the Warrants) as
if the Warrants had been exercised immediately Prior to such event, less the
Exercise Price. Upon receipt of such payment, if any, the rights of a Holder
shall terminate and cease and his or her Warrants shall expire. Notwithstanding
the foregoing, if the Company has made a Repurchase Offer, which has not expired
at the time of such transaction, the Holders of the Warrants shall be entitled
to receive on the date of such transaction the higher of (1) the amount payable
to Holders of Warrants pursuant to this paragraph and (2) the Repurchase Price
payable to Holders of Warrants pursuant to such Repurchase Offer. In case of
any such merger, consolidation or sale of assets, the surviving or acquiring
Person and, in the event of any dissolution, liquidation or winding up of the
Company, the Company shall deposit promptly with the Warrant Agent the funds, if
any, necessary to pay the Holders of the Warrants. After receipt of such
deposit from such Person or the Company and after receipt of surrendered Warrant
Certificates, the Warrant Agent shall make payment
21
by delivering a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate) to
such Person or Persons as it may be directed in writing by the Holder surrender-
ing such Warrants.
SECTION 4.2 NOTICE OF ADJUSTMENT. Whenever the number of shares of
Common Stock or other stock or property purchasable upon the exercise of each
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
cause the Warrant Agent promptly to mail, at the expense of the Company, to each
Holder notice of such adjustment or adjustments and shall deliver to the Warrant
Agent a certificate of a firm of independent public accountants selected by the
Board of Directors of the Company (who may be the regular accountants employed
by the Company) setting forth the number of shares of Common Stock or other
stock or property purchasable upon the exercise of each Warrant and the Exercise
Price after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate shall be conclusive evidence of the
correctness of such adjustment. The Warrant Agent shall be entitled to rely on
such certificate and shall be under no duty or responsibility with respect to
any such certificate, except to exhibit the same, from time to time, to any
Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holders to determine whether any facts exist which may require any adjustment of
the Exercise Price or the number of shares of Common Stock or other stock or
property purchasable on exercise of the Warrants, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed in making such adjustment, or the validity or value (or the kind or
amount) of any shares of Common Stock or other stock or property which may be
purchasable on exercise of the Warrants. The Warrant Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
common stock or properties upon the exercise of any Warrant.
22
SECTION 4.2 STATEMENT ON WARRANTS. Irrespective of any adjustment in
the Exercise Price or 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.
SECTION 4.4 NOTICE OF CONSOLIDATION, MERGER, ETC. In case at any
time after the date hereof and prior to 5:00 p.m., New York City time, on the
Expiration Date, there shall be any (i) consolidation or merger involving the
Company or sale, transfer or other disposition of all or substantially all of
the Company's property, assets or business (except a merger or other reorgani-
zation in which the Company shall be the surviving corporation and holders of
Common Stock (or other securities or property purchasable upon exercise of the
Warrants) receive no consideration in respect of their shares) or (ii) any other
transaction contemplated by Section 4.1(i)(ii) above; then in any one or more of
said cases, the Company shall cause to be mailed to the Warrant Agent and each
Holder of a Warrant, at the earliest practicable time (and, in any event, not
less than 20 calendar days before any date set for definitive action), notice of
the date on which such reorganization, sale, consolidation, merger, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also set forth such facts as shall indicate the effect of such action (to
the extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares of Common Stock and other securi-
ties, money and other property deliverable upon exercise of the Warrants. Such
notice shall also specify the date as of which the holders of record of the
shares of Common Stock or other securities or property issuable upon exercise of
the Warrants shall be entitled to exchange their shares for securities, money or
other property deliverable upon such reorganization, sale, consolidation,
merger, dissolution, liquidation or winding up, as the case may be.
SECTION 4.5 FRACTIONAL INTERESTS. The Company may but shall not be
required to issue fractional shares of Common Stock on the exercise of Warrants.
If more than one Warrant shall be presented for exercise in full at the same
time by the same Holder, the number of full
23
shares of Common Stock which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of
shares of Common Stock purchasable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except
for the provisions of this Section 4.5, be issuable on the exercise of
any Warrant (or specified portion thereof), the Company shall pay an
amount in cash calculated by it to be equal to the then Current Market
Value per share of Common Stock multiplied by such fraction computed
to the nearest whole cent.
ARTICLE V
DECREASE IN EXERCISE PRICE
The Board of Directors of the Company, in its sole discretion, shall
have the right at any time, or from time to time, to decrease the Exercise Price
of the Warrants, such reduction of the Exercise Price to be effective for a
period or periods to be determined by it, but in no event for a period of less
than 30 calendar days. Any exercise by the Board of Directors of any rights
granted in this Article V must be preceded by a written notice from the Company
to each Holder of the Warrants setting forth the reduction in the Exercise Price
and to the Warrant Agent, which notice shall be mailed at least 30 calendar days
prior to the effective date of such decrease in the Exercise Price of the War-
rants. Any reduction of the Exercise Price pursuant to provisions of this
Article V shall not alter or adjust the number of shares of Common Stock or
other securities issuable upon the exercise of the Warrants.
ARTICLE VI
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of evidence satis-
factory to them of the ownership and the loss, theft, destruction or mutilation
of any Warrant Certificate and of indemnity satisfactory to them and (in the
case of mutilation) upon surrender and cancellation thereof, then, in the
absence of notice to the Company or the Warrant Agent that the Warrants repre-
sent-
24
ed thereby have been acquired by a bona fide purchaser, the Company shall
execute and the Warrant Agent shall countersign and deliver to the registered
Holder of the lost, stolen, destroyed or mutilated Warrant Certificate, in
exchange for or in lieu thereof, a new Warrant Certificate of the same tenor and
for a like aggregate number of Warrants. Upon the issuance of any new Warrant
Certificate under this Article VI, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and other expenses (including the fees and expenses of the
Warrant Agent) in connection therewith. Every new Warrant Certificate executed
and delivered pursuant to this Article VI in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute a contractual obligation of the
Company, whether or not the allegedly lost, stolen or destroyed Warrant Certifi-
cates shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Article VI are exclusive and shall preclude (to the extent lawful) all
other rights or remedies with respect to the replacement of mutilated, lost,
stolen, or destroyed Warrant Certificates.
ARTICLE VII
RESERVATION, AUTHORIZATION AND
REGISTRATION OF COMMON STOCK
SECTION 7.1 RESERVATION AND AUTHORIZATION. The Company shall at all
times reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock or other securities
of the Company deliverable upon exercise of Warrants as will be sufficient to
permit the exercise in full of all outstanding Warrants and will cause appro-
priate evidence of ownership of such Common Stock or other securities of the
Company to be delivered to the Warrant Agent upon its request for delivery upon
the exercise of Warrants, and all such shares of Common Stock will, at all
times, be duly approved for listing subject to official notice of issuance on
each securities exchange, if any, on which such Common Stock is then listed.
25
SECTION 7.2 REGISTRATION. Subject to Section 3.2, if the issuance
or sale of any shares of Common Stock or other securities issuable upon the
exercise of the Warrants require registration or approval of any governmental
authority, or the taking of any other action under the laws of the United States
of America or any political subdivision thereof, before such securities may be
validly offered or sold in compliance with such laws, then the Company covenants
that it will, in good faith and as expeditiously as reasonably practicable,
endeavor to secure and maintain such registration or approval or to take such
other action, as the case may be, and the Company will furnish the Warrant Agent
with current Prospectuses meeting the requirements of the Securities Act and the
rules and regulations of the Commission thereunder in sufficient quantity to
permit the Warrant Agent to deliver a Prospectus to each Holder of a Warrant
upon the exercise thereof. In connection with the foregoing, the Company agrees
to maintain the effectiveness of the Registration Statement (Registration No.
33-53343) pursuant to which the Units were originally issued, or a successor
thereto, until the earlier of the Expiration Date or the exercise of all of the
Warrants. The Company further agrees to pay all fees, costs and expenses in
connection with the preparation and delivery to the Warrant Agent of the
Prospectuses and the delivery thereof by the Warrant Agent to the Holders of the
Warrants. The Company shall also advise the Warrant Agent of the political
subdivisions of the United States and the persons in such subdivision in and to
whom such shares may be issued.
ARTICLE VII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
SECTION 8.1 TRANSFER AND EXCHANGE. The Warrant Certificates shall be
issued in registered form only. The Company shall cause to be kept at the
office of the Warrant Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Warrant Certificates and transfers or exchanges of Warrant Certificates as
herein provided. All Warrant Certificates issued upon any registration of
transfer or exchange of Warrant Certificates shall be the valid obligations of
the Compa-
26
ny, evidencing the same obligations, and entitled to the same benefit under this
Agreement, as the Warrant Certificate surrendered for such registration of
transfer or exchange.
The Warrants shall initially be issued as part of an issuance of
Units, each of which consists of ___ Senior Secured Notes and __ Warrants.
Prior to the Separation Date, the Warrants may not be transferred or exchanged
separately from, but may be transferred or exchanged only together with, the
Senior Secured Notes issued in connection with such Warrants.
A Holder may transfer its Warrants only by written application to the
Warrant Agent stating the name of the proposed transferee and otherwise comply-
ing with the terms of this Agreement. No such transfer shall be effected until,
and such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Warrant Agent in the regis-
ter. Prior to the registration of any transfer of Warrants by a Holder as
provided herein, the Company, the Warrant Agent, and any agent of the Company
may treat the person in whose name the Warrants are registered as the owner
thereof for all purposes and as the person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. Furthermore,
any Holder of a Global Warrant shall, by acceptance of such Global Warrant,
agree that transfers of beneficial interests in such Global Warrant may be
effected only through a book entry system maintained by the Holder of such
Global Warrant (or its agent), and that ownership of a beneficial interest in
the Warrants represented thereby shall be required to be reflected in a book
entry. When Warrant Certificates are presented to the Warrant Agent with a
request to register the transfer or to exchange them for an equal amount of War-
rants of other authorized denominations, the Warrant Agent shall register the
transfer or make the exchange as requested if its requirements for such trans-
actions are met. To permit registrations of transfers and exchanges, the
Company shall execute Warrant Certificates at the Warrant Agent's request. No
service charge shall be made for any registration of transfer or exchange of
Warrants, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed
27
in connection with any registration of transfer of Warrants.
SECTION 8.2 BOOK-ENTRY PROVISIONS FOR GLOBAL WARRANT. (a) The Global
Warrant initially shall (i) be registered in the name of the Depositary for such
Global Warrant or the nominee of such Depositary, (ii) be delivered to the
Warrant Agent as custodian for such Depositary and (iii) bear legends as set
forth in Section 2.2.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Agreement with respect to the Global Warrant held on
their behalf by the Depositary, or the Warrant Agent as its custodian, or under
the Global Warrant, and the Depositary may be treated by the Company, the
Warrant Agent and any agent of the Company or the Warrant Agent as the absolute
owner of such Global Warrant for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Warrant Agent or any
agent of the Company or the Warrant Agent, from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or im-
pair, as between the Depositary and its Agent Members, the operation of cus-
tomary practices governing the exercise of the rights of a holder of any
Warrants.
(b) Transfers of the Global Warrant shall be limited to trans-
fers of such Global Warrant in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in the
Global Warrant may be transferred in accordance with the rules and procedures of
the Depositary. Beneficial owners may obtain Physical Securities in exchange
for their beneficial interests in the Global Warrant upon request in accordance
with the Depositary's and the Warrant Agent's procedures. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Warrant if the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Warrant, and a successor depositary is not appointed by the Company within 90
days of such notice.
(c) In connection with any transfer of a portion of the benefi-
cial interests in the Global Warrant to beneficial owners pursuant to paragraph
(b) of this Section, the Warrant Agent shall reflect on its books and
28
records the date and a decrease in the amount of Warrants represented by the
Global Warrant in an amount equal to the amount of the beneficial interest in
the Global Warrant to be transferred, and the Company shall execute, and the
Warrant Agent shall countersign and deliver, one or more Physical Securities of
like tenor and amount.
(d) In connection with the transfer of the entire Global Warrant
to beneficial owners pursuant to paragraph (b) of this Section, the Global
Warrant shall be deemed to be surrendered to the Warrant Agent for cancellation,
and the Company shall execute, and the Warrant Agent shall countersign and
deliver, to each beneficial owner identified by the Depositary in exchange for
its beneficial interest in the Global Warrant an equal aggregate principal
amount of Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest
in the Global Warrant pursuant to paragraphs (b) or (d) of this Section shall
bear the legend regarding transfer restrictions applicable to the Physical
Security set forth in Section 2.2.
(f) The registered holder of the Global Warrant may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Agreement or the Warrants.
The Warrant Agent shall retain copies of all letters, notices and
other written communications received pursuant to this Section 8.2. The Company
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of reason-
able written notice to the Warrant Agent.
SECTION 8.3 SURRENDER OF WARRANT CERTIFICATES. Any Warrant Certifi-
cate surrendered for registration of transfer, exchange, exercise or repurchase
of the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company and,
29
except as provided in this Article VIII in case of an exchange, Article III in
case of the exercise or repurchase of less than all the Warrants represented
thereby or Article VI in case of a mutilated Warrant Certificate, no Warrant
Certificate shall be issued hereunder in lieu thereof. The Warrant Agent shall
deliver to the Company from time to time or otherwise dispose of such cancelled
Warrant Certificates as the company may direct.
ARTICLE IX
WARRANT HOLDERS
SECTION 9.1 WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Prior to the
exercise of the Warrants, no Holder of a Warrant Certificate, as such, shall be
entitled to any rights of a stockholder of the Company, including, without
limitation, the right to vote or to consent to any action of the stockholders,
to receive dividends or other distributions, to exercise any preemptive right or
to receive any notice of meetings of stockholders and, except as otherwise
provided in this Agreement, shall not be entitled to receive any notice of any
proceedings of the Company.
SECTION 9.2 RIGHT OF ACTION. All rights of action with respect to
this Agreement are vested in the Holders of the Warrants, and any Holder of any
Warrant, without the consent of the Warrant Agent or the Holders of any other
Warrant, may, in his own behalf and for his own benefit, enforce, and may insti-
tute and maintain any suit, action or proceeding against the Company suitable to
enforce, or otherwise in respect of, his right to exercise his Warrants in the
manner provided in the Warrant Certificate representing his Warrants and in this
Agreement.
ARTICLE X
REMEDIES
SECTION 10.1 DEFAULTS. It shall be deemed to be a Default with
respect to the Company's (or its successor's) obligations under this Agreement
if: (i) the Company (or its successor) shall fail to make a
30
Repurchase Offer pursuant to Section 3.4 hereof or (ii) the Company (or its
successor) shall fail to purchase the Warrants pursuant to any Repurchase
Offer in accordance with the provisions of Section 3.4.
SECTION 10.2 PAYMENT OBLIGATIONS. Upon the happening of a Default
under this Agreement the Company shall be obligated to increase the amount
otherwise payable pursuant to Section 3.4(d) in respect of the Repurchase Offer
to which such Default relates by an amount equal to interest thereon at a rate
per annum equal to ___% from the date of the Default to the date of payment,
which interest shall compound quarterly (all such payment obligations in respect
of any such Repurchase Offer, together with all such increased amounts, being
the "REPURCHASE OBLIGATION").
SECTION 10.3 REMEDIES; NO WAIVER. Notwithstanding any other provi-
sion of this Warrant Agreement, if a Default occurs and is continuing, the
Holders of the Warrants may pursue any available remedy to collect the Repur-
chase Obligation or to enforce the performance of any provision of this Warrant
Agreement. A delay or omission by any Holder of a Warrant in exercising, or a
failure to exercise, any right or remedy arising out of a Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Default. All remedies are cumulative to the extent permitted by law.
ARTICLE XI
THE WARRANT AGENT
SECTION 11.1 DUTIES AND LIABILITIES. The Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth, by all of which the Company and
the Holders of Warrants, by their acceptance thereof, shall be bound. The
Warrant Agent shall not, by countersigning Warrant Certificates or by any other
act hereunder, be deemed to make any representations as to the validity or
authorization of the Warrants or the Warrant Certificates (except as to its
countersignature thereon) or of any securities or other property delivered upon
exercise or repurchase of any Warrant, or as to the accuracy of the computation
of the Exercise Price or the
31
number or kind or amount of stock or other securities or other property deliver-
able upon exercise or repurchase of any Warrant, or as to the independence of
any Independent Financial Expert or the correctness of the representations of
the Company made in the certificates that the Warrant Agent receives. The
Warrant Agent shall not be accountable for the use or application by the Company
of the proceeds of the exercise of any Warrant. The Warrant Agent shall not
have any duty to calculate or determine any adjustments with respect to either
the Exercise Price or the kind and amount of shares or other securities or any
property receivable by Holders upon the exercise or repurchase of Warrants
required from time to time and the Warrant Agent shall have no duty or responsi-
bility in determining the accuracy or correctness of such calculation. The
Warrant Agent shall not be (a) liable for any recital or statement of fact
contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by it in good faith in the belief that any Warrant Cer-
tificate or any other documents or any signatures are genuine or properly autho-
rized, (b) responsible for any failure on the part of the Company to comply with
any of its covenants and obligations contained in this Agreement or in the
Warrant Certificates or (c) liable for any act or omission in connection with
this Agreement except for its own gross negligence or willful misconduct. The
Warrant Agent is hereby authorized to accept instructions with respect to the
performance of its duties hereunder from the President, any Vice President or
the Secretary of the Company and to apply to any such officer for instructions
(which instructions will be promptly given in writing when requested) and the
Warrant Agent shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with the instructions of any such officer;
however, in its discretion the Warrant Agent may in lieu thereof accept other
evidence of such or may require such further or additional evidence as it may
deem reasonable. The Warrant Agent shall not be liable for any action taken in
the event it requests instructions from the Company and does not receive such
instructions within a reasonable period of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent
32
shall not be answerable or accountable for any act, default, neglect or miscon-
duct of any such attorneys, agents or employees, provided reasonable care has
been exercised in the selection and in the continued employment of any such
attorney, agent or employee. The Warrant Agent shall not be under any obliga-
tion or duty to institute, appear in or defend any action, suit or legal
proceeding in respect hereof, unless first indemnified to its satisfaction, but
this provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or without such
indemnity. The Warrant Agent shall promptly notify the company in writing of
any claim made or action, suit or proceeding instituted against it arising out
of or in connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or cause to
be delivered all such further acts, instruments and assurances as may reasonably
be required by the Warrant Agent in order to enable it to carry out or perform
its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
SECTION 11.2 RIGHT TO CONSULT COUNSEL. The Warrant Agent may at any
time consult with legal counsel (who may be legal counsel for the Company), and
the opinion or advice of such counsel shall be full and complete authorization
and protection to the Warrant Agent and the Warrant Agent shall incur no
liability or responsibility to the Company or to any Holder for any action
taken, suffered or omitted by it in good faith in accordance with the opinion or
advice of such counsel.
SECTION 11.3 COMPENSATION; INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent from time to time, on demand of the Warrant
Agent, compensation for its services hereunder as the Company and the Warrant
Agent may agree from time to time, and to reimburse it for reasonable expenses
and counsel fees in-
33
curred in connection with the execution and administration of this Agreement,
and further agrees to indemnify the Warrant Agent and save it harmless against
any losses, liabilities or expenses arising out of or in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of investigating or defending any claim of such liability, except that
the Company shall have no liability hereunder to the extent that any such loss,
liability or expense results from the Warrant Agent's own gross negligence or
willful misconduct. The obligations of the Company under this Section shall
survive the exercise and the expiration of the Warrants and the resignation or
removal of the Warrant Agent.
SECTION 11.4 NO RESTRICTIONS ON ACTIONS. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in transactions in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
SECTION 11.5 DISCHARGE OR REMOVAL; REPLACEMENT WARRANT AGENT. The
Warrant Agent may resign from its position as such and be discharged from all
further duties and liabilities hereunder (except liability arising as a result
of the Warrant Agent's own gross negligence or willful misconduct), after giving
one month's prior written notice to the Company. The Company may remove the
Warrant Agent upon one month's written notice specifying the date when such
discharge shall take effect, and the Warrant Agent shall thereupon in like
manner be discharged from all further duties and liabilities hereunder, except
as aforesaid. The Warrant Agent or the Company shall cause to be mailed to each
Holder of a Warrant a copy of said notice of resignation or notice of removal,
as the case may be. Upon such resignation or removal the Company shall appoint
in writing a new warrant agent. If the Company shall fail to make such appoint-
ment within a period of 30 calendar days after it has been notified in writing
of such resignation by the resigning Warrant Agent or after such removal, then
the
34
resigning Warrant Agent or the Holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Any new
warrant agent, whether appointed by the Company or by such a court, shall be a
bank or trust company doing business under the laws of the United States or any
state thereof, in good standing and having a combined capital and surplus of not
less than $25,000,000. The combined capital and surplus of any such new warrant
agent shall be deemed to be the combined capital and surplus as set forth in the
most recent annual report of its condition published by such warrant agent prior
to its appointment, provided that such reports are published at least annually
pursuant to law or to the requirements of a federal or state supervising or
examining authority. After acceptance in writing of such appointment by the new
warrant agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; however, if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the resigning
or removed Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning or removed
Warrant Agent and shall forthwith cause a copy of such notice to be mailed to
each Holder of a Warrant. Failure to give any notice provided for in this
Section 11.5, however, or any defect therein, shall not affect the legality or
validity of the resignation of the Warrant Agent or the appointment of a new
warrant agent, as the case may be.
SECTION 11.6 SUCCESSOR WARRANT AGENT. Any corporation into which the
Warrant Agent or any new warrant agent may be merged, or any corporation
resulting from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party, shall be a successor Warrant Agent under this Agreement
without any further act, provided that such corporation would be eligible for
appointment as successor to the Warrant Agent under the provisions of Section
11.5. Any such successor Warrant Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed to each Holder of a Warrant.
35
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 MONEY DEPOSITED WITH THE WARRANT AGENT. The Warrant
Agent shall not be required to pay interest on any moneys deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to pay thereon. Any moneys, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Agreement shall be and are hereby assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
moneys, securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. Any money, securities
or other property deposited with the Warrant Agent for payment or distribution
to the Holders that remains unclaimed for two years after the date the money,
securities or other property was deposited with the Warrant Agent shall be
delivered to the Company upon its request therefor.
SECTION 12.2 PAYMENT OF TAXES. All shares of Common Stock or other
securities issuable upon the exercise of Warrants shall be validly issued, fully
paid and nonassessable, and the Company shall pay any taxes and other governmen-
tal charges that may be imposed under the laws of the United States of America
or any political subdivision or taxing authority thereof or therein in respect
of the issue or delivery thereof or of other securities deliverable upon
exercise of Warrants or in respect of any Repurchase Offer (other than income
taxes imposed on the Holders). The Company shall not be required, however, to
pay any tax or other charge imposed in connection with any transfer involved in
the issue of any certificate for shares of Common Stock or other securities or
property issuable upon the exercise of the Warrants or in respect of any
Repurchase Offer or payment of cash to any Person other than the Holder of a
Warrant Certificate surrendered upon the exercise or repurchase of a Warrant and
in case of such transfer or payment, the Warrant Agent and the Company shall not
be required to issue any stock certificate or pay any cash until such tax or
charge has been paid or it has been established to
36
the Warrant Agent's and the Company's satisfaction that no such tax or charge is
due.
SECTION 12.3 NO MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE
COMPANY. Except as otherwise provided herein, the Company will not merge into
or consolidate with any other Person, or sell or otherwise transfer its proper-
ty, assets and business substantially as an entirety to a successor of the
Company, unless the Person resulting from such merger or consolidation, or such
successor of the Company, shall expressly assume, by supplemental agreement
satisfactory in form to the Warrant Agent and executed and delivered to the
Warrant Agent, the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company.
SECTION 12.4 REPORTS TO HOLDERS. Until the Company has a class of
equity securities registered under the Exchange Act, the Company will prepare,
for the first three quarters of each fiscal year, full quarterly financial
reports (including combined or consolidated quarterly financial statements and a
management discussion and analysis of financial condition and results of opera-
tions). The Company will also prepare, on an annual basis, complete audited
combined or consolidated financial statements including, but not limited to, a
balance sheet, a statement of income and stockholders' equity, a statement of
changes in financial position and all appropriate notes. Such annual report
will also include a management discussion and analysis of financial condition
and results of operations. All financial statements will be prepared in
accordance with generally accepted accounting principles consistently applied,
except for changes with which the Company's independent public accountants
concur and except that quarterly statements may be subject to year-end adjust-
ments. The Company will cause a copy of the respective reports to be mailed to
the Warrant Agent and to each of the Holders of the Warrants within 60 calendar
days after the close of each of the first three quarters of each fiscal year and
within 120 calendar days after the close of each fiscal year, at such Holder's
address appearing on the register of the Company maintained by the Warrant
Agent.
If the Company shall have a class of equity securities registered
under the Exchange Act, the Company
37
will cause a copy of the annual reports and of the information, documents and
other reports which the Company shall be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act to be mailed to the Warrant
Agent and to each Holder of the Warrants within 15 days after such information,
documents and other reports have been so filed, at such Holder's address
appearing on the register of the Company maintained by the Warrant Agent.
SECTION 12.5 NOTICES. Except as otherwise provided in Section
12.5(b), any notice, demand or delivery authorized by this Agreement shall be
sufficiently given or made when mailed, if sent by first class mail, postage
prepaid, addressed to any Holder of a Warrant at such Holder's last known
address appearing on the register of the Company maintained by the Warrant Agent
and to the Company or the Warrant Agent as follows:
To the Company: Empire Gas Corporation
1700 South Jefferson Street
P.O. Box 303
Lebanon, Missouri 66536
Attention: Secretary
To the Warrant Agent: Shawmut Bank Connecticut
National Association
777 Main Street MSN 238
Hartford, Connecticut 06115
Attention: Corporate Trust
Administration
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
(b) Any notice required to be given by the Company to the Holders
pursuant to Section 3.4(b), shall be made by mailing by registered mail, return
receipt requested, to the Holders at their last known addresses appearing on the
register of the Company maintained by the Warrant Agent. The Company hereby
irrevocably authorizes the Warrant Agent, in the name and at the expense of the
Company, to mail any such notice upon
38
receipt thereof from the Company. Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly given when
mailed, whether or not the Holder receives the notice.
SECTION 12.6 APPLICABLE LAW. This Agreement, each Warrant Certifi-
cate issued hereunder and all rights arising hereunder shall be construed and
determined in accordance with the laws of the State of New York, and the
performance thereof shall be governed and enforced in accordance with such laws.
SECTION 12.7 BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the Company and the Warrant Agent and their respec-
tive successors and assigns, and the Holders from time to time of the Warrants.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person, other than the Company, the Warrant Agent and the Holders of the
Warrants, any right, remedy or claim under or by reason of this Agreement or any
part hereof.
SECTION 12.8 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
SECTION 12.9 AMENDMENTS. The Warrant Agent may, without the consent
or concurrence of the Holders of the Warrants, by supplemental agreement or
otherwise, join with the Company in making any changes or corrections in this
Agreement that they shall have been advised by counsel (a) are required to cure
any ambiguity or to correct any defective or inconsistent provision or clerical
omission or mistake or manifest error herein contained or (b) add to the
covenants and agreements of the Company in this Agreement further covenants and
agreements of the Company thereafter to be observed, or surrender any rights or
power reserved to or conferred upon the Company in this Agreement; PROVIDED that
in either case such changes or corrections do not and will not adversely affect,
alter or change the rights, privileges or immunities of the Holders of Warrants.
SECTION 12.10 HEADINGS. The descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
39
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
EMPIRE GAS CORPORATION
By_____________________________________
Name:
Title:
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Warrant Agent
By_____________________________________
Name:
Title:
40
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTA-
TIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR THE WARRANT AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR REPURCHASE, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL WARRANT
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE VIII OF THE WARRANT AGREEMENT. ]1
THE WARRANTS ARE INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS. EACH
UNIT CONSISTS OF (i) ___ SENIOR SECURED NOTES AND (ii) ___ WARRANTS OF THE
COMPANY. PRIOR TO THE CLOSE OF BUSINESS DECEMBER __, 1994, THE WARRANTS
EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPA-
RATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE
SENIOR SECURED NOTES ISSUED BY EMPIRE GAS CORPORATION, IN CONNECTION HERE-
WITH.
[CUSIP] [SINS] No. ________
- -----------------------------
1. Include only for Global Warrant
A-1
No. _____ Certificate for _______ Warrants
WARRANTS TO PURCHASE COMMON STOCK
This certifies that _____________, or its registered assigns, is the
owner of the number of Warrants set forth above, each of which represents the
right to purchase, after the Separation Date (as defined below), from EMPIRE GAS
CORPORATION, a Missouri corporation (the "Company"), one share of Common Stock,
par value $.001 per share, of the Company ("Common Stock") at the purchase price
(the "Exercise Price") of $7.00 per share (subject to adjustment as provided in
the Warrant Agreement hereinafter referred to), upon surrender hereof at the
office of Shawmut Bank Connecticut, National Association or to its successor as
the warrant agent under the Warrant Agreement hereinafter referred to (any such
warrant agent being herein called the "Warrant Agent"), with the Subscription
Form on the reverse hereof duly executed, with signature guaranteed as therein
specified and simultaneous payment in full (in cash or by certified or official
bank or bank cashier's check payable to the order of the Company) of the pur-
chase price for the share(s) as to which the Warrant(s) represented by this
Warrant Certificate are exercised, all subject to the terms and conditions
hereof and of the Warrant Agreement. "Separation Date" means the close of
business upon December __, 1994.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of June __, 1994 (the "Warrant Agreement"), between
the Company and Shawmut Bank Connecticut, National Association, as Warrant
Agent, and is subject to the terms and provisions contained therein; to all of
which terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. The Warrant Agreement is hereby incorporated herein by
reference and made a part hereof. Reference is hereby made to the Warrant
Agreement for a full description of the rights, limitations of rights, obliga-
tions, duties and immunities thereunder of the Company and the Holders of the
Warrants. The summary of the terms of the Warrant Agreement contained in this
Warrant Certificate is qualified in its entirety by express reference to the
Warrant Agreement. All terms used in this Warrant Certificate that are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
A-2
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
Shawmut Bank Connecticut, National
Association
777 Main Street MSN 238
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
A "Repurchase Event", as defined in the Warrant Agreement, shall be
deemed to occur if at any time prior to June __, 2004 the Company consolidates
with, merges into or with (where holders of the Common Stock receive consid-
eration in exchange for all or part of such shares of Common Stock), or sells
all or substantially all of its assets to, another Person which has a class of
equity Securities registered under the Exchange Act, or a wholly owned subsid-
iary of such Person, if the consideration for such transaction does not consist
solely of cash or such merger or consolidation is not effected solely for the
purpose of changing the Company's state of incorporation or is effected with a
Plaster Entity or a Lindsey Entity.
Following a Repurchase Event, the Company must make an offer to
repurchase all Warrants surrendered for repurchase (a "Repurchase Offer"). If
the Company makes a Repurchase Offer, Holders may, until the Final Surrender
Date of such offer, surrender all or part of their Warrants for repurchase by
the Company.
Warrants received by the Warrant Agent in proper form during a
Repurchase Offer will, except as otherwise provided in the Warrant Agreement, be
repurchased by the Company at a price (the "Repurchase Price") equal to the
value on the Valuation Date relating thereto of the Common Stock and other
securities or property of the Company which would have been delivered upon
exercise of the Warrants, less the Exercise Price. The value of such Common
Stock and other securities will be (i) if the Common Stock (or other securities)
is registered under the Exchange Act, determined based upon the closing sales
prices of the Common Stock (or other securities) for the 20 trading days
immediately preceding such Valuation Date or (ii) if the Common Stock (or other
securities) is not registered under the Exchange Act or if the value cannot be
computed under clause (i) above, determined by the Independent Financial Expert
(as defined in
A-3
the Warrant Agreement), in each case as set forth in the Warrant Agreement.
The "Valuation Date" as defined in the Warrant Agreement shall be
deemed to occur on the date five business days prior to the date notice of the
Repurchase Offer is first given.
If the Company fails to make or complete any Repurchase Offer (a
"Default") as required by the Warrant Agreement, it shall be obligated to
increase the amount otherwise payable pursuant to the Warrant Agreement in
respect of the Repurchase Offer to which such Default relates by an amount equal
to interest thereon at a rate of ___% per annum from the date of the Default to
the date of payment, which interest shall compound quarterly.
If the Company merges or consolidates with, or sells all or substan-
tially all of its property and assets to, another Person (other than an Affili-
ate of the Company) solely for cash, the Holders of Warrants shall be entitled
to receive upon exercise cash on an equal basis with holders of Common Stock, as
if the Warrants had been exercised immediately prior to such transaction or the
amount payable pursuant to an outstanding Repurchase Offer, if higher.
The number of shares of Common Stock purchasable upon the exercise of
each Warrant and the price per share are subject to adjustment as provided in
the Warrant Agreement. Except as stated in the immediately preceding paragraph,
in the event the Company merges or consolidates with, or sells all or substan-
tially all of its assets to, another Person, each Warrant will, upon exercise,
entitle the Holder thereof to receive the number of shares of stock or other
securities or the amount of money and other property which the holder of a share
of Common Stock (or other securities or property issuable upon exercise of a
Warrant) is entitled to receive upon completion of such merger, consolidation or
sale.
As to any final fraction of a share which the same Holder of one or
more Warrant Certificates would otherwise be entitled to purchase upon exercise
thereof in the same transaction, the Company may pay the cash value thereof
determined as provided in the Warrant Agreement.
All shares of Common Stock or other securities issuable by the Company
upon the exercise of Warrants shall be validly issued, fully paid and nonassess-
able, and the Company
A-4
shall pay all taxes and other governmental charges that may be imposed under the
laws of the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of such shares
or of other securities deliverable upon exercise of Warrants. The Company shall
not be required, however, to pay any tax or other charge imposed in connection
with any transfer involved in the issue of any certificate for shares of Common
Stock, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the Warrant Agent's and the Company's satisfaction that no
tax or other charge is due.
Subject to the restrictions on transfer set forth in Article VIII of
the Warrant Agreement, this Warrant Certificate and all rights hereunder are
transferable by the registered Holder hereof, in whole or in part, on the
register of the Company maintained by the Warrant Agent for such purpose at its
office in Hartford, Connecticut, upon surrender of this Warrant Certificate duly
endorsed, or accompanied by a written instrument of transfer in form satisfacto-
ry to the Company and the Warrant Agent duly executed, with signatures guaran-
teed as specified in the attached Form of Assignment, by the registered Holder
hereof or his attorney duly authorized in writing and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer the Company will issue and deliver to such Holder a
new Warrant Certificate or Certificates with respect to any portion not so
transferred. Each taker and Holder of this Warrant Certificate, by taking and
holding the same, consents and agrees that prior to the registration of transfer
as provided in the Warrant Agreement, the Company and the Warrant Agent may
treat the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights repre-
sented hereby, any notice to the contrary notwithstanding.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent maintained for such purpose in Hartford, Connecticut for Warrant Certifi-
cates representing the same aggregate number of Warrants, each new Warrant
Certificate to represent such number of Warrants as the Holder hereof shall
designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder
of this Warrant Certificate, as such, shall not be entitled to any right of a
stockholder of the Company,
A-5
including, without limitation, the right to vote or to consent to any action of
the stockholders, to receive dividends or other distributions, to exercise any
preemptive right or to receive any notice of meetings of stockholders, and shall
not be entitled to receive any notice of any proceedings of the Company except
as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on June __, 2004 unless sooner terminated by the liquidation, disso-
lution or winding-up of the Company or as otherwise provided in the Warrant
Agreement upon the consolidation or merger of the Company with or sale of the
Company to, another Person (other than an Affiliate of the Company), or unless
such date is extended as provided in the Warrant Agreement.
A-6
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
Dated: June __, 1994
EMPIRE GAS CORPORATION
By:____________________________________
Name:
Title:
Countersigned:
Shawmut Bank Connecticut,
National Association,
as Warrant Agent
By:______________________
A-7
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To:
The undersigned irrevocably exercises _________ of the Warrants for
the purchase of one share (subject to adjustment) of Common Stock, par value
$.001 per share, of EMPIRE GAS CORPORATION for each Warrant represented by the
Warrant Certificate and herewith makes payment of $__________ (such payment
being in cash or by certified or official bank or bank cashier's check payable
to the order of ____________________________________), all at the exercise price
and on the terms and conditions specified in the within Warrant Certificate and
the Warrant Agreement therein referred to, surrenders this Warrant Certificate
and all right, title and interest therein to __________________________________-
_______ and directs that the shares of Common Stock deliverable upon the
exercise of said Warrants be registered or placed in the name and at the address
specified below and delivered thereto.
Dated:
(1)
------------------------------------------------
(Signature of Owner)
------------------------------------------------
(Street Address)
------------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
- ---------------------------
(1) The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
FORM OF CERTIFICATE FOR SURRENDER FOR REPURCHASE OFFER
(To be executed only upon repurchase
of Warrant by the Company)
To:
The undersigned, having received prior notice of the consideration for
which EMPIRE GAS CORPORATION will repurchase the Warrants represented by the
within Warrant Certificate, hereby surrenders this Warrant Certificate for
repurchase by EMPIRE GAS CORPORATION for the consideration set forth in said
notice.
Dated:
(1)
------------------------------------------------
(Signature of Owner)
------------------------------------------------
(Street Address)
------------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
Check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
- -----------------------------------------------
(l) The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants constituting
a part of the Warrants evidenced by the within Warrant Certificate not being as-
signed hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of
ASSIGNEE(S) ADDRESS NO. OF WARRANTS
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Please insert social security or other identifying number of assignee(s).
and does hereby irrevocably constitute and appoint _____________
__________ the undersigned's attorney to make such transfer on the books of
_____________________ maintained for the purposes, with full power of substitu-
tion in the premises.
Dated:
(1)
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(Signature of Owner)
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(Street Address)
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(City) (State) (Zip Code)
Signature Guaranteed By:
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(1) The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of