WARRANT AGREEMENT
between
EMPIRE GAS CORPORATION
and
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
Warrant Agent
_________________________
Dated as of June 29, 1994
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WARRANT AGREEMENT
AGREEMENT dated as of June 29, 1994 (this "Agreement") be-
tween Empire Gas Corporation, a Missouri corporation (the "Company"), and
Shawmut Bank Connecticut, National Association, a National Banking Associa-
tion, as warrant agent (the "Warrant Agent").
Pursuant to the terms of an Underwriting Agreement dated as
of June 23, 1994 between the Company and Morgan Stanley & Co. Incorporated,
as Underwriter (the "Underwriting Agreement"), the Company has agreed to
issue and sell 12,720 units (the "Units"). Each Unit will consist of (i)
ten 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 29, 1994 between the Compa-
ny, each of the Subsidiary Guarantors (as defined therein) and Shawmut Bank
Connecticut, National Association, as trustee, and (ii) 13.8 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 $.01 per share. The Senior
Secured Notes and the Warrants included in each Unit will become separately
transferable on January 15, 1995.
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 1.
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
definition, "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
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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.
"Current Market Value" has the meaning specified in Section
4.1(f).
"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 July 15, 2004.
"Final Surrender Date" has the meaning specified in Section
3.4(b).
"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.
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"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).
"Repurchase Event" means, and shall be deemed to occur if at
any time prior to July 15, 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 substan-
tially 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 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.
"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 January 15, 1995.
"Underwriter" has the meaning specified in the recitals to
this Agreement.
"Underwriting Agreement" 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 2.
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 War-
rant 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
interests 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").
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. 1. 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
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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 REPRESEN-
TATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRE-
SENTATIVE 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 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.
2. Prior to the Separation Date, each Warrant
Certificate shall bear the following legend on the face thereof:
THE WARRANTS ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF(I) TEN
12 7/8% SENIOR SECURED NOTES DUE 2004 OF EMPIRE GAS
CORPORATION AND (II) 13.8 WARRANTS. PRIOR TO
JANUARY 15, 1995, THE WARRANTS EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EX-
CHANGED ONLY TOGETHER WITH, THE SENIOR SECURED
NOTES ISSUED BY EMPIRE GAS CORPORATION IN CON-
NECTION HEREWITH.
Section 2.3 Execution and Delivery of Warrant Certificates.
Warrant Certificates evidencing Warrants to purchase initially an aggregate
of up to 175,536 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
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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.
ARTICLE 3.
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 $.01 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 4:00 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 shall be exercised, such
Warrant Certificate shall be surrendered and a new Warrant Certificate 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
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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 of Common Stock or other securities
purchasable upon the exercise of the Warrants shall be closed, the certifi-
cates 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 re-
quired by law, shall not be closed at any one time for a period longer than
20 days.
Section 3.4 Repurchase Offers. 1. 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.
2. 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
4:00 p.m., New York City time on the date (the "Final Surrender Date") 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.
3. Repurchase Offers. a. In any Repurchase
Offer, the Company shall offer to purchase for cash at the Repurchase Price
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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.
b. Each Holder may, but shall not be obligated to,
accept such Repurchase Offer, by tendering to the Warrant
Agent, on or prior to the 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 re-
sponsible for the payment of any transfer taxes required as
the result of any change in ownership of such Warrants.
4. Repurchase Price. a. 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.
b. The Relevant Value of the Common Stock and
other securities or property issuable upon exercise of all
the Warrants, will be:
(1) If the Common Stock (or other securi-
ties) 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
consecutive 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 date, then the average of the closing
sales prices for all of the trading days before
such date for which closing sales prices are avail-
able.
(2) If the Common Stock (or other securi-
ties) is not registered under the Exchange Act or
if the value cannot be computed under clause (I)
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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 minority
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 con-
taining 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 provisions 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 Value Report of the Independent Financial Ex-
pert.
5. Selection of Independent Financial Expert. 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.
6. 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 Repurchase Offer, (ii) the manner in which
Warrants may be surrendered to the Warrant Agent for repurchase by the
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Company, (iii) the Repurchase Price at which the Warrants will be repur-
chased 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 Repurchase 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.
7. 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 the Final surrender Date and 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 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 delivered to a
Person other than the Holder.
8. 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 4.
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:
1. 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 securities 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
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become effective immediately after the effective date of such event retro-
active to the record date, if any, for such event.
2. 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 sub-
scribe for or purchase Common Stock at a price per share which is lower (at
the record date for such issuance) than the then Current Market Value per
share of Common Stock, 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 then
Current Market Value per share of Common Stock. 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.
3. 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 securities, by dividing (x) the
total amount receivable by the Company in consideration of the sale and
issuance of such rights, options, warrants or convertible 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 convertible or
exchangeable securities) that is lower than the Current Market Value per
share of the Common Stock in effect immediately prior to such sale or issu-
ance, 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 (deter-
mined as provided below) for such sale or issuance would purchase at such
Current Market Value per share of Common Stock. 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 exchangeable securities shall be
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entitled to subscribe for or purchase shall be deemed to be issued and out-
standing 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 securities 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-
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.
4. 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 shareholders entitled to receive
such distribution.
5. 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
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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
readjustment 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 number, 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.
6. 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:
a. if the security is not registered under the
Exchange Act, the value of the security (l) 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 deter-
mination 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 3.4(d)(ii)(II); provided, however, that in determin-
ing the value of the Common Stock under Section 4.5, if the
foregoing clause (l) 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
b. if the security is registered under the Ex-
change Act, 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
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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 determined as if the security were not
registered under the Exchange Act.
7. 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.
8. 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 immediately prior to
such adjustment and the denominator of which shall be the number of shares
so purchasable immediately thereafter.
9. Consolidation, Merger, Etc. a. 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 Agree-
ment 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 purchasable upon exercise of
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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.
b. 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 con-
nection therewith, consideration is payable to holders of
Common Stock in exchange for their Common Stock in connec-
tion 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 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 surrendering
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
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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.
Section 4.3 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 4:00 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 reorganization 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 securities, 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
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exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same Holder, the number of full
shares of Common Stock which shall be issuable upon such exercise 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 5.
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 Warrants. 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 6.
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of
evidence satisfactory 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 can-
cellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants represented 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 Cer-
tificate 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 Certificates shall be at any time enforceable by anyone,
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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 7.
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 appropriate 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.
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.
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 8.
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
20 of 29
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 Company, 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 10 Senior Secured Notes and
13.8 Warrants. Prior to the Separation Date, the Warrants may not be trans-
ferred 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 complying 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 register. 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 Security, 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 Certifi-
cates are presented to the Warrant Agent with a request to register the
transfer or to exchange them for an equal amount of Warrants of other
authorized denominations, the Warrant Agent shall register the transfer or
make the exchange as requested if its requirements for such transactions 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 in connection with
any registration of transfer of Warrants.
Section 8.2 Book-Entry Provisions for Global Warrant. 1.
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 Mem-
bers") 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 whatso-
ever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the Warrant Agent,
21 of 29
from giving effect to any written certification, proxy or other authoriza-
tion furnished by the Depositary or impair, as between the Depositary and
its Agent Members, the operation of customary practices governing the exer-
cise of the rights of a holder of any Warrants.
2. Transfers of the Global Warrant shall be
limited to transfers 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 and the provisions of Sec-
tion 8.3. 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 ap-
pointed by the Company within 90 days of such notice.
3. In connection with any transfer of a portion of
the beneficial interests in the Global Warrant to beneficial owners pursuant
to paragraph (b) of this Section, the Warrant Agent shall reflect on its
books and 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.
4. 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.
5. Any Physical Security delivered in exchange for
an interest in the Global Warrant pursuant to paragraphs (b) or (d) of this
Section shall, except as otherwise provided by paragraph (f) of Section 8.3,
bear the legend regarding transfer restrictions applicable to the Physical
Security set forth in Section 2.2.
6. 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 reasonable written notice to the Warrant Agent.
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Section 8.3 Surrender of Warrant Certificates. Any Warrant
Certificate 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, 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 9.
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 stock-
holders 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 institute 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 10.
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
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 12 7/8% from the date of the
Default to the date of payment, which interest shall compound quarterly (all
23 of 29
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 provision of this Warrant Agreement, if a Default occurs and is
continuing, the Holders of the Warrants may pursue any available remedy to
collect the Repurchase 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 11.
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 represen-
tations 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 number or kind or amount of stock or other securities or other property
deliverable 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 responsibility 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 Certificate or any other documents
or any signatures are genuine or properly authorized, (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 re-
quested) 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
24 of 29
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
shall not be answerable or accountable for any act, default, neglect or
misconduct 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 obligation 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 incurred 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
25 of 29
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 war-
rant agent. If the Company shall fail to make such appointment 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
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
26 of 29
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.
ARTICLE 12.
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 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 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 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 property, 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
27 of 29
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 operations). 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 adjustments. 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 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. 1. 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
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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.
2. 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 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
Certificate 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 respective 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.
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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:
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EXHIBIT A
FORM OF WARRANT CERTIFICATE
[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 REPUR-
CHASE, 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 (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.]
THE WARRANTS ARE INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS.
EACH UNIT CONSISTS OF (i) 10 SENIOR SECURED NOTES AND (ii) 13.8 WAR-
RANTS OF THE COMPANY. PRIOR TO JANUARY 15, 1995, THE WARRANTS EVI-
DENCED 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 CON-
NECTION HEREWITH.
CUSIP No. 291714129
No. Certificate for Warrants
_____ _______
_______________________
[FN]
<F1> Include only for Global Security.
2 of 9
WARRANTS TO PURCHASE COMMON STOCK
This certifies that _____________, or its registered as-
signs, 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 be-
low), 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 $.01 per
share (subject to adjustment as provided in the Warrant Agreement hereinaf-
ter 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 purchase
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 January 15,
1995.
This Warrant Certificate is issued under and in accordance
with a Warrant Agreement dated as of June 29, 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, obligations, 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.
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 July 15, 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 the consideration for such
3 of 9
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 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 12 7/8% 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
substantially all of its property and assets to, another Person (other than
an Affiliate 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 substantially 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.
4 of 9
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 shall 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 nonassessable, and the Company 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 satisfactory to the Company and the Warrant Agent duly
executed, with signatures guaranteed 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
represented 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 Certificates 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, 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 enti-
tled to receive any notice of any proceedings of the Company except as pro-
vided in the Warrant Agreement.
5 of 9
This Warrant Certificate shall be void and all rights evi-
denced hereby shall cease on July 15, 2004 unless sooner terminated by the
liquidation, dissolution 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.
6 of 9
This Warrant Certificate shall not be valid for any purpose
until it shall have been countersigned by the Warrant Agent.
Dated:
EMPIRE GAS CORPORATION
By:
______________________
Name:
Title:
Countersigned:
Shawmut Bank Connecticut,
National Association,
as Warrant Agent
By:
_________________________
Authorized Signature
7 of 9
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 ___ share[s] (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:
_____________________________<F1>
(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:
________________________________
[FN]
<F1> 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.
8 of 9
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 War-
rant Certificate for repurchase by EMPIRE GAS CORPORATION for the consider-
ation set forth in said notice.
Dated:
_____________________________<F1>
(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:
_________________________________
[FN]
<F1> 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.
9 of 9
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 assigned 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
__________ _______ _______________
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
substitution in the premises.
Dated:
_____________________________<F1>
(Signature of Owner)
_____________________________
(Street Address)
_____________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
___________________________________
[FN]
<F1> 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.