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EXHIBIT 4.5
WARRANT AGREEMENT
BETWEEN
THE COASTAL CORPORATION
[LOGO APPEARS AND
HERE]
, AS WARRANT AGENT
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DATED AS OF , 199
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TABLE OF CONTENTS
PAGE
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Section 1. Appointment of Warrant Agent................................ 1
Section 2. Warrant Certificates........................................ 1
Section 3. Execution of Warrant Certificates........................... 1
Section 4. Registration and Countersignature........................... 2
Section 5. Registration of Transfers and Exchanges..................... 2
(a) Transfer and Exchange of Warrants........................... 2
(b) Obligations with Respect to Transfers and Exchanges of
Warrants.................................................... 3
Section 6. Exercise of Warrants........................................ 3
Section 7. Payment of Taxes............................................ 5
Section 8. Mutilated or Missing Warrant Certificates................... 5
Section 9. Reservation of Warrant Shares............................... 5
Section 10. Obtaining Stock Exchange Listings........................... 6
Section 11. Warrant Price: Adjustments.................................. 7
(a) Adjustment for Change in Common Stock....................... 7
(b) Adjustment for Rights and Warrants.......................... 7
(c) Adjustment for Certain Distributions........................ 8
(d) Certain Exercise Price and Exercise Rate Adjustments........ 9
(e) Voluntary Adjustment........................................ 9
(f) Reorganization of the Company............................... 9
(g) When Issuance or Payment May Be Deferred.................... 10
(h) When Adjustment May Be Deferred............................. 10
(i) Specificity of Adjustment................................... 11
(j) Company Determination Final................................. 11
(k) Adjustment for Tax Purposes................................. 11
(l) Adjustments to Par Value.................................... 11
(m) No Other Adjustment for Dividends........................... 11
(n) Multiple Adjustments........................................ 11
(o) Definitions................................................. 11
(p) Warrant Agent's Disclaimer.................................. 12
Section 12. Fractional Interests........................................ 12
Section 13. Notices to Warrant Holders.................................. 13
Section 14. Reports..................................................... 14
Section 15. Merger, Consolidation or Change of Name of Warrant Agent.... 14
Section 16. Warrant Agent............................................... 15
Section 17. Change of Warrant Agent..................................... 18
Section 18. Notices to the Company and Warrant Agent.................... 19
Section 19. Supplements and Amendments.................................. 19
Section 20. Successors.................................................. 20
Section 21. Termination................................................. 20
Section 22. Governing Law............................................... 20
Section 23. Benefits of This Agreement.................................. 20
Section 24. Severability................................................ 21
Section 25. Counterparts................................................ 21
Section 26. Headings.................................................... 21
Exhibit A--Form of Warrant Certificate................................ A-1
WARRANT AGREEMENT dated as of , 199 between The Coastal Corporation,
a Delaware corporation (the "Company"), and , as warrant agent (the "War-
rant Agent").
WHEREAS, the Company proposes to issue warrants (the "Warrants") to purchase
an aggregate of shares (the "Warrant Shares") of common stock, par value
$.33 1/3 per share (the "Common Stock"), of the Company at an initial cash
purchase price of $ per share at any time [after and] prior to P.M.
Houston time on (the "Expiration Date");
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Com-
pany, and the Warrant Agent is willing so to act, in connection with the issu-
ance of Warrant Certificates (as defined below) and other matters as provided
herein; (as defined below) and other matters as provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the terms and
conditions set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
Section 2. Warrant Certificates. (a) The Warrants will be issued in defini-
tive form substantially in the form of Exhibit A. Any certificates (the "War-
rant Certificates") evidencing the Warrants to be delivered pursuant to this
Agreement shall be substantially in the form set forth in Exhibit A attached
hereto.
Section 3. Execution of Warrant Certificates. Warrant Certificates shall be
signed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, Chief Operating Officer or its President or a Vice President or the
Chief Financial Officer (each an "Executing Officer"). Each such signature
upon the Warrant Certificates may be in the form of a facsimile signature of
the Executing Officer and may be imprinted or otherwise reproduced on the War-
rant Certificates.
In case any Executing Officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be an Executing Officer before the
Warrant Certificates so signed shall have been countersigned by the Warrant
Agent, or disposed of by the Company, such Warrant Certificates nevertheless
2
may be countersigned and delivered or disposed of as though such person had
not ceased to be an Executing Officer of the Company; and any Warrant Certifi-
cate may be signed on behalf of the Company by any person who, at the actual
date of the execution of such Warrant Certificate, shall be a proper Executing
Officer of the Company to sign such Warrant Certificate, although at the date
of the execution of this Warrant Agreement any such person was not such an
officer.
Section 4. Registration and Countersignature. The Warrant Agent, on behalf
of the Company, shall number and register the Warrant Certificates in a regis-
ter (the "Warrant Register") as they are issued by the Company. Warrant Cer-
tificates shall be manually countersigned by an authorized officer of the War-
rant Agent and shall not be valid for any purpose unless so countersigned.
Warrant Certificates shall be dated the date of such countersignature. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
Chief Executive Officer, Chief Operating Officer, President or Vice President
or Chief Financial Officer of the Company, initially countersign, issue and
deliver Warrants entitling the holders thereof to purchase not more than the
number of Warrant Shares referred to above in the first recital hereof and
shall countersign and deliver Warrants as otherwise provided in this Agree-
ment.
The Company and the Warrant Agent may deem and treat the registered hold-
er(s) of the Warrant Certificates as the absolute owner(s) thereof (notwith-
standing any notation of ownership or other writing thereon made by anyone),
for all purposes, and neither the Company nor the Warrant Agent shall be af-
fected by any notice to the contrary.
Section 5. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Warrants. When Warrants are presented to the
Warrant Agent with a request:
(i) to register the transfer of the Warrants; or
(ii) to exchange such Warrants for an equal number of Warrants of other
authorized denominations, the Warrant Agent shall register the transfer or
make the exchange as requested if the requirements for such transactions
are met; provided, however, that the Warrants presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Company
and the Warrant Agent, duly executed by the holder thereof or by his at-
▇▇▇▇▇▇, duly authorized in writing.
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(b) Obligations with Respect to Transfers and Exchanges of Warrants.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Warrant Agent is hereby authorized to countersign,
in accordance with the provisions of Section 4 and this Section 5, War-
rants as required pursuant to the provisions of this Section 5.
(ii) All Warrants issued upon any registration of transfer or exchange
of Warrants shall be the valid obligations of the Company, entitled to the
same benefits under this Warrant Agreement as the Warrants surrendered
upon such registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any War-
rant, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such War-
rant, and neither the Warrant Agent nor the Company shall be affected by
notice to the contrary.
(iv) No service charge shall be made to a holder for any registration of
transfer or exchange.
Section 6. Exercise of Warrants.
(a) Upon the terms and subject to the conditions set forth in this Agreement
and the Warrant Certificates, each Warrant holder shall have the right, which
may be exercised at any time [commencing on , 199 and] until
P.M., Houston time, on , to receive from the Company the number of
fully paid and nonassessable Warrant Shares which the holder may at the time
be entitled to receive on exercise of such Warrants and payment of the Exer-
cise Price (as defined herein) then in effect for such Warrant Shares. Each
Warrant not exercised prior to P.M., New York time, on shall expire
and all rights thereunder and all rights in respect thereof under this Agree-
ment and the Warrant Certificates shall cease as of such time.
(b) A Warrant may be exercised upon surrender to the Company at the princi-
pal office of the Warrant Agent of the Warrant Certificate or Certificates ev-
idencing the Warrants to be exercised with the form of election to purchase on
the reverse thereof duly completed and signed (which signature shall be guar-
anteed by an "eligible guarantor" as defined in the regulations promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
and upon payment to the Warrant Agent of the exercise price of $ per share
of Common Stock, subject to adjustment as set forth herein (the "Exercise
Price"), plus transfer taxes (if applicable pursuant to Section 7) for each of
the Warrant Shares in respect of which such Warrants are then exercised. Pay-
ment of the
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aggregate Exercise Price shall be made (i) in cash or (ii) by certified or of-
ficial bank check payable to the order of the Company. All funds received upon
the exercise of the Warrants shall be delivered or deposited by the Warrant
Agent as instructed in writing by the Company.
(c) Subject to the provisions of Section 7 hereof, upon such surrender of
Warrants and payment of the Exercise Price, the Company shall issue and cause
to be delivered with all reasonable dispatch to or upon the written order of
the Warrant holder and in such name or names as the Warrant holder may desig-
nate, a certificate or certificates for the number of full Warrant Shares is-
suable upon the exercise of such Warrants together with cash as provided in
Section 12; provided, however, that if any consolidation, merger, transfer or
lease of assets is proposed to be effected by the Company as described in sub-
section (f) of Section 11 hereof, or a tender offer or an exchange offer for
shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than three Business Days (as de-
fined in subsection (o) of Section 11) thereafter, issue and cause to be de-
livered the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence and/or any other considera-
tion to be issued to such Warrant holder pursuant to subsection (f) of Section
11 hereof, together with cash as provided in Section 12. Such certificate or
certificates shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment of
the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the registered
holders thereof, either in full or from time to time in part, and, in the
event that a certificate evidencing Warrants is exercised in respect of fewer
than all of the Warrant Shares issuable on such exercise at any time prior to
the date of expiration of the Warrants, a new certificate evidencing the re-
maining Warrant or Warrants will be issued and the Warrant Agent is hereby ir-
revocably authorized to countersign and to deliver the required new Warrant
Certificate or Certificates pursuant to the provisions of this Section and of
Section 5 hereof, and the Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrant Certificates duly executed on be-
half of the Company for such purpose.
(e) All Warrant Certificates surrendered upon exercise of Warrants shall be
cancelled by the Warrant Agent and delivered to and disposed of by the Com-
5
pany in accordance with applicable law. The Warrant Agent shall account
promptly to the Company with respect to Warrants exercised and concurrently
pay to the Company payments, in whatever form permitted by this Warrant Agree-
ment, received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants. The Warrant Agent shall keep copies of
this Agreement and any notices given or received hereunder available for in-
spection by the registered holders during normal business hours at its office.
The Company shall supply the Warrant Agent from time to time with such numbers
of copies of the Agreement as the Warrant Agent may request.
Section 7. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Warrant Shares
in a name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be re-
quired to issue or deliver such Warrant Certificates or certificates for War-
rant Shares unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Com-
pany may in its discretion issue and the Warrant Agent may countersign, in ex-
change and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing
an equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or de-
struction of such Warrant Certificate and indemnity, if requested, satisfac-
tory to each of them. Applicants for such substitute Warrant Certificates
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
Section 9. Reservation of Warrant Shares. The Company will at all times re-
serve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
6
obligation to issue Warrant Shares upon exercise of Warrants, the maximum num-
ber of shares of Common Stock (as adjusted from time to time pursuant to Sec-
tion 11) which may then be deliverable upon the exercise of all outstanding
Warrants.
The Company or, if appointed, the transfer agent for the Common Stock (the
"Transfer Agent") and every subsequent transfer agent for any shares of the
Company's Capital Stock (as defined in subsection (o) of Section 11) issuable
upon the exercise of any of the rights of purchase aforesaid will be irrevoca-
▇▇▇ authorized and directed at all times to reserve such number of authorized
shares as shall be required for such purpose. The Company will keep a copy of
this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's Capital Stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from
such Transfer Agent (including the Company if it is acting as Transfer Agent)
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will sup-
ply such Transfer Agent with duly executed certificates for such purposes and
will provide or otherwise make available any cash which may be payable as pro-
vided in Section 12. The Company will furnish such Transfer Agent a copy of
all notices of adjustments and certificates related thereto, transmitted to
each holder pursuant to Section 14 hereof.
The Company covenants that all Warrant Shares which may be issued upon exer-
cise of Warrants will, upon payment of the Exercise Price therefore and the
issuance thereof, be fully paid, nonassessable, free of preemptive rights,
free from all taxes (subject to Section 7 hereof) and free from all liens,
charges and security interests, created by or through the Company, with re-
spect to the issue thereof.
Section 10. Obtaining Stock Exchange Listings. The Company will from time to
time take all action which may be necessary so that the Warrant Shares, imme-
diately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America, if any, on which other shares of Common Stock are then listed or
quoted. Upon the listing of such Warrant Shares, the Company shall notify the
Warrant Agent in writing.
7
Section 11. Warrant Price; Adjustments. The Exercise Price and the number of
Warrant Shares issuable upon the exercise of each Warrant (the "Exercise
Rate") are subject to adjustment from time to time as set forth in this Sec-
tion 11.
(a) Adjustment for Change in Common Stock. In case the Company shall at any
time after the date of this Agreement (i) pay a dividend, or make a distribu-
tion on, the Common Stock which is payable in shares of its Common Stock, (ii)
subdivide or reclassify its outstanding shares of Common Stock into a greater
number of securities (including shares of Common Stock), or (iii) combine or
reclassify outstanding shares of Common Stock into a smaller number of shares
(including shares of Common Stock), the Exercise Rate immediately prior to the
occurrence of such event shall be adjusted so that the holder of each Warrant
shall be entitled to receive upon payment of the Exercise Price the aggregate
number of shares of Common Stock of the Company which, if such Warrant had
been exercised immediately prior to the occurence of such event, such holder
would have owned or have been entitled to receive immediately after the occur-
rence of such event. An adjustment pursuant to this subparagraph (a) shall be-
come effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision or combination. If, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive shares of two or more classes of Capital Stock of
the Company, the Board of Directors of the Company (whose determination shall
be conclusive) shall determine the allocation between or among shares of such
classes of Capital Stock.
In the event that at any time, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive any shares or other securities of the Company other
than shares of Common Stock, thereafter the number of such other shares so re-
ceived upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in this para-
graph, and other provisions of this paragraph 11(a) with respect to the Common
Stock shall apply on like terms to any such other shares or other securities.
(b) Adjustment for Rights or Warrants. In case the Company shall fix a record
date for the issuance of rights or warrants to all holders of its Common
8
Stock entitling them to subscribe for or purchase Common Stock at a price per
share less than the Current Market Value per share of Common Stock (as defined
in subparagraph (o) below) at such record date, the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Shares of Common Stock outstanding on such record date plus the number of
Shares of Common Stock which the aggregate offering price of the total number
of shares so offered would purchase at such Current Market Value, and the de-
nominator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional Shares of Common Stock of-
fered for subscription or purchase. Such adjustment shall be made successively
whenever such a record date is fixed, and shall become effective immediately
after such record date. In determining whether any rights or warrants entitle
the holders to subscribe for or purchase shares of Common Stock at less than
such Current Market Value, and in determining the aggregate offering price of
such shares, there shall be taken into account any consideration received by
the Company for such rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors of the Company.
Common Stock owned by or held for the account of the Company or any majority
owned subsidiary shall not be deemed outstanding for the purpose of any ad-
justment required under this subparagraph (b). To the extent that shares of
Common Stock are not delivered after the expiration of such rights or war-
rants, the Exercise Price shall be readjusted to the Exercise Price which
would then be in effect had the adjustments made in respect of the issuance of
such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actualy delivered.
(c) Adjustment for Certain Distributions. In case the Company shall fix a
record date for making a distribution to all holders of its Common Stock of
evidences of its indebtedness or assets (excluding regular quarterly or other
periodic or recurring cash dividends or distributions and cash dividends or
distributions paid from retained earnings or referred to in subparagraph (a)
above) or rights or warrants to subscribe or warrants to purchase such evi-
dences of indebtedness or assets (excluding those referred to in subparagraph
(b) above), then in each such case the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediatley prior to such record date
by a fraction (x) the numerator of which shall be the Current Market Value (as
defined in subparagraph (o) below) per share of Common Stock on such record
date, less the then fair market value (as determined in good faith by the
Board of Directors, whose determina-
9
tion shall be conclusive) of the portion of the assets or evidence of indebt-
edness so distributed or of such subscription rights or warrants applicable to
one share of the Common Stock and (y) the denominator of which shall be the
Current Market Value per share of the Common Stock on such record date. Such
adjustment shall be made successively whenever such a record date is fixed and
shall become effective immediately after such record date. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary
shall not be deemed outstanding for the purpose of any adjustment required un-
der this subparagraph (c).
(d) Certain Exercise Price and Exercise Rate Adjustments. After each Exercise
Rate adjustment pursuant to subparagraph 11(a), the Exercise Price shall be
adjusted by multiplying such Exercise Price immediately prior to such adjust-
ment by a fraction of which the numerator shall be the number of shares pur-
chasable upon exercise of each Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of shares purchasable immedi-
ately thereafter. After each adjustment of the Exercise Price pursuant to sub-
paragraph 11(b) or (c), the Exercise Rate shall be adjusted by multiplying
such Exercise Rate by a fraction, the numerator of which the Exercise Price
immediately after such adjustment and the denominator of which is the Exercise
Price immediately prior to such adjustment.
(e) Voluntary Adjustment. The Company from time to time may decrease the Ex-
ercise Price by any amount for any period of time if the period is at least 20
days and if the decrease is irrevocable during the period. Whenever the Exer-
cise Price is so decreased, the Company shall mail to the Warrant Agent and
each of the Warrant holders a notice of the decrease. The Company shall mail
the notice at least 15 days before the date the decreased Exercise Price takes
effect. The notice shall state the decreased Exercise Price and the period it
will be in effect.
A decrease of the Exercise Price pursuant to this subsection (e) does not
change or adjust the Exercise Price otherwise in effect for purposes of this
Section 11.
(f) Reorganization of the Company. If the Company consolidates or merges with
or into, or transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other assets
which the holder of a Warrant would have owned immediately after the ▇▇▇▇▇▇▇-
dation,
10
merger, transfer or lease if the holder had exercised the Warrant immediately
before the effective date of the transaction. Concurrently with the consumma-
tion of such transaction, the corporation formed by or surviving any such con-
solidation or merger if other than the Company, or the person to which such
sale or conveyance shall have been made, shall enter into a supplemental War-
rant Agreement so providing and further providing for adjustments which shall
be as nearly equivalent as may be practical to the adjustments provided for in
this Section 11. The successor to the Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
If this subsection (f) applies, subsections (a), (b) and (c) of this Section
11 shall not apply.
(g) When Issuance or Payment May Be Deferred. In any case in which this Sec-
tion 11 shall require that an adjustment in the Exercise Rate and Exercise
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event (i) issuing to the
holder of any Warrant exercised after such record date the Warrant Shares and
other Capital Stock of the Company, if any, issuable upon such exercise over
and above the Warrant Shares and other Capital Stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Rate and Exercise
Price prior to adjustment and (ii) paying to such holder any amount in cash in
lieu of a fractional share pursuant to Section 12, provided, however, that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate instru-
ment evidencing such holder's right to receive such additional Warrant Shares,
other Capital Stock and cash upon the occurrence of the event requiring such
adjustment.
(h) When Adjustment May be Deferred. No adjustment in the Exercise Price and
Exercise Rate shall be required unless and until the earlier of the following
shall have occurred: (x) such adjustment would require an increase or decrease
of at least 1% in the Exercise Price and Exercise Rate or (y) a period of
three years shall have elapsed from the date of the occurrence of any event
requiring any such adjustment pursuant to subparagraphs (a), (b) or (c) above.
All adjustments shall be made to the nearest one hundredth of a Share and the
nearest cent, and any adjustments which by reason of this subparagraph (f) are
not required to
11
be made shall be carried forward cumulatively and taken into account in any
subsequent adjustment which (including such carry-forward) is required to be
made under this subparagraph (h).
(i) Specificity of Adjustment. Irrespective of any adjustments in the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same number and
kind of shares per Warrant as are stated on the Warrants initially issuable
pursuant to this Agreement.
(j) Company Determination Final. Any determination that the Company or the
Board of Directors of the Company must make pursuant to this Section 11 will
be conclusive if made in good faith.
(k) Adjustment for Tax Purposes. The Company may make such increases in the
Exercise Price and Exercise Rate, in addition to those otherwise required by
this Section 11, as it considers to be advisable in order that any event
treated for Federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients.
(l) Adjustments to Par Value. The Company shall make such adjustments to the
par value of the Common Stock in order that, upon exercise of the Warrants,
the Warrant Shares will be fully paid and non-assessable.
(m) No Other Adjustment for Dividends. Except as provided in this Section
11, no adjustment will be made for dividends on any Common Stock.
(n) Multiple Adjustments. After an adjustment to the Exercise Price and Exer-
cise Rate under this Section 11, any subsequent event requiring an adjustment
under this Section 11 shall cause an adjustment to the Exercise Price and Exer-
cise Rate as so adjusted.
(o) Definitions.
"Business Day" shall mean any day on which (i) banks in New York City, (ii)
the principal national securities exchange or market, if any, on which the
Common Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market, if any, on which the Warrants are listed or ad-
mitted to trading are each open for business.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that cor-
poration.
12
"Current Market Value" per share of Common Stock or of any other security at
any date shall be the average of the daily closing prices for the 30 consecu-
tive business days commencing 45 business days before the day in question. The
closing price for each day shall be (i) if the Common Stock is listed or ad-
mitted for trading on any national securities exchange, the last sale price
(regular way), or the average of the closing bid and ask prices, if no sale
occurred, of Common Stock on the principal securities exchange on which the
Common Stock is listed, (ii) if not listed as described in (i), the mean be-
tween the closing high bid and low asked quotations of Common Stock in the Na-
tional Association of Securities Dealers, Inc., Automated Quotation System, or
any similar system or automated dissemination of quotations or securities
prices then in common use, if so quoted, or (iii) if not quoted as described
in clause (ii), the mean between the high bid and low asked quotations for
Common Stock as reported by the National Quotation Bureau Incorporated if at
least two securities dealers have inserted both bid and asked quotations for
Common Stock on at least 5 of the 10 preceding days. If none of the conditions
set forth above is met, the Closing Price of Common Stock on any day or the
average of such Closing Prices for any period shall be the fair market value
of Common Stock as determined by a member firm of the New York Stock Exchange,
Inc., selected by the Company.
(p) Warrants Agent's Disclaimer. The Warrant Agent has no duty to determine
when an adjustment under this Section 11 should be made, how it should be made
or what it should be. The Warrant Agent has no duty to determine whether any
provisions of a supplemental Warrant Agreement under subsection (g) of this
Section 11 are correct. The Warrant Agent makes no representation as to the
validity or value of any securities or assets issued upon exercise of War-
rants. The Warrant Agent shall not be responsible for the Company's failure to
comply with this Section 11.
Section 12. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one War-
rant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the ex-
ercise thereof shall be computed on the basis of the aggregate number of War-
rant Shares purchasable on exercise of the Warrants so presented. If any frac-
tion of a Warrant Share would, except for the provisions of this Section 12,
be issuable on the exercise of any Warrants (or specified portion thereof),
the Company shall pay an amount in cash equal to the Current Market Value per
Warrant Share on the day immediately preceding the date the Warrant is pre-
sented for exercise, multiplied by such fraction.
13
Section 13. Notices to Warrant Holders. Upon any adjustment of the Exercise
Rate and Exercise Price pursuant to Section 11, the Company shall promptly
thereafter but in no event later than 15 days (i) cause to be filed with the
Warrant Agent a certificate of a firm of independent public accountants of na-
tionally recognized standing selected by the Board of Directors of the Company
(who may be the regular auditors of the Company) setting forth the Exercise
Rate after such adjustment and setting forth in reasonable detail the method
of calculation and the facts upon which such calculations are based, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
the Warrant Certificates at his or her address appearing on the Warrant Regis-
ter written notice of such adjustments by first-class mail, postage prepaid.
Where appropriate, such notice may be given in advance and included as part of
the notice required to be mailed under the other provisions of this Section
13.
In case:
(a) the Company shall authorize the issuance to all holders of shares of
Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Com-
mon Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or of a tender of-
fer or exchange offer for shares of Common Stock; or
(c) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(d) the Company proposes to take any action which would require an ad-
justment of the Exercise Rate and Exercise Price pursuant to Section 11;
or
(e) the Company takes any action that would require a supplemental War-
rant Agreement pursuant to subsection (f) of Section 11;
then the Company shall cause to be filed with the Warrant Agent and shall
cause to be given to each of the registered holders of the Warrant Certifi-
▇▇▇▇▇ at his or her address appearing on the Warrant Register, at least 20
days (or 10 days in any case specified in clauses (a) or (b) above) prior to
the applicable record date
14
hereinafter specified, or promptly in the case of events for which there is no
record date, by first class mail, postage prepaid, a written notice stating
(i) the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to
be determined, or (ii) the initial expiration date set forth in any tender of-
fer or exchange offer for shares of Common Stock, or (iii) the date on which
any such reclassification, consolidation, merger, conveyance, transfer, disso-
lution, liquidation or winding up is expected to become effective or consum-
mated, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange such shares for securi-
ties or other property, if any, deliverable upon such reclassification, con-
solidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 13 or any defect
therein shall not affect the legality or validity of any distribution, right,
option, warrant, reclassification, consolidation, merger, conveyance, trans-
fer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant Certificates
shall be construed as conferring upon the holders thereof the right to vote or
to consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of Directors of the Company or any other matter,
or any rights whatsoever as shareholders of the Company.
Section 14. Reports. Whether or not required by the rules and regulations of
the SEC, so long as any Warrants or Warrant Shares are outstanding, the Com-
pany will furnish to the registered holders of Warrants and Warrant Shares all
financial information that would be required to be contained in a filing with
the SEC on Forms 10-Q, 10-K and 8-K if the Company were required to file such
forms. In addition, whether or not required by the rules and regulations of
the SEC, the Company will file a copy of all such information and reports with
the SEC for public availability (unless the SEC will not accept such a filing)
and make such information available to investors who request it in writing.
Section 15. Merger, Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to all
or substantially all of the corporate trust business of the Warrant Agent,
shall be the successor to the Warrant Agent hereunder without the execution or
filing of any paper or any further act on the part of any of the parties here-
to, provided that such corporation would be eligible for appointment as a
15
successor warrant agent under the provisions successor warrant agent under the
provisions of Section 20. In case at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, and in case at
that time any of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the counter-
signature of the predecessor Warrant Agent; and in case at that time any of
the Warrant Certificates shall not have been countersigned, any successor to
the Warrant Agent may countersign such Warrant Certificates either in the name
of the predecessor Warrant Agent or in the name of the successor to the War-
rant Agent; and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this Agree-
ment.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this Agree-
ment.
Section 16. Warrant Agent. The Warrant Agent undertakes the duties and obli-
gations imposed by this Agreement upon the following terms and conditions, by
all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates shall
be taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as de-
scribe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or
in the Warrant Certificates.
(c) The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and the Warrant Agent shall in-
cur no liability or responsibility to the Company or to any holder of any
Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the ad-
vice of such counsel.
16
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken
in reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document
or instrument believed by it in good faith to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent compensation for all
services rendered by the Warrant Agent in the execution and performance of
this Agreement at such rates as have been separately agreed to by the Com-
pany and the Warrant Agent and to reimburse the Warrant Agent for all ex-
penses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution and performance of
this Agreement. The Company shall indemnify the Warrant Agent and its
agents and save each of them harmless against any and all losses, reason-
able expenses, liabilities, including judgments, costs and counsel fees
and the costs and expenses of investigating or defending any claim of such
liability, for anything done or omitted by the Warrant Agent or its agents
in the execution of and performance of its obligations under this Agree-
ment except as a result of its negligence or bad faith. The Warrant Agent
shall notify the Company promptly of any claim for which it may seek in-
demnity; provided that failure by the Warrant Agent to so notify the Com-
pany shall not relieve its obligations hereunder. The Company shall defend
the claim and the Warrant Agent shall cooperate in the defense. The War-
rant Agent may have separate counsel and the Company shall pay the reason-
able fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreason-
ably withheld.
(f) The Warrant Agent shall be under no obligation to institute, appear
in or defend any action, suit or legal proceeding or to take any other ac-
tion likely to involve expense unless the Company or one or more regis-
tered holders of Warrant Certificates shall furnish the Warrant Agent with
security and indemnity reasonably satisfactory to it for any costs and ex-
penses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as it may consider proper,
whether with or without any such security or indemnity. All rights of ac-
tion under this Agreement or under any of the Warrants may be enforced by
the Warrant Agent without the possession of any of the Warrant Certifi-
▇▇▇▇▇ or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent and any recovery of
judgment shall be for the ratable benefit of the registered holders of the
Warrants, as their respective rights or interests may appear.
17
(g) The Warrant Agent, and any stockholder, director, officer or employee
of it, may buy, sell or deal in any of the Warrants or other securities of
the Company or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money to the Com-
pany or otherwise act as fully and freely as though it were not 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.
(h) The Warrant Agent shall act hereunder solely as agent for the Compa-
ny, its duties shall be determined solely by the provisions hereof, and no
implied covenants or obligations shall be read into this Agreement against
the Warrant Agent. The Warrant Agent shall not be liable for anything
which it may do or refrain from doing in connection with this Agreement
except for its own negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty or respon-
sibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or Exercise Rate or other secu-
rities or property deliverable as provided in this Agreement, or to deter-
mine whether any facts exist which may require any of such adjustments, or
with respect to the nature, accuracy, correctness or extent of any such
adjustments, when made, or with respect to the method employed in making
the same. The Warrant Agent shall not be accountable with respect to the
validity or value or the kind or amount of any Warrant Shares or of any
securities or property which may at any time be issued or delivered upon
the exercise of any Warrant or with respect to whether any such Warrant
Shares or other securities will when issued be validly issued and fully
paid and nonassessable, and makes no representation with respect thereto.
(j) In the absence of bad faith on its part, the Warrant Agent may con-
clusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Warrant Agent and, if required by the terms thereof, conforming to the
requirements of this Warrant Agreement. However, the Warrant Agent shall
examine the certificates and opinions, if required by the terms thereof,
to determine whether or not they conform to the requirements of this War-
rant Agreement.
(k) The Warrant Agent may rely and shall be fully protected in relying
upon any document believed by it in good faith to be genuine and to have
been signed or presented by the proper person. The Warrant Agent need not
investigate any fact or matter stated in the documents.
(l) The Warrant Agent may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed and monitored in
good faith and with due care.
18
(m) The Company will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the War-
rant Agent in order to enable it to carry out or perform its duties under
this Agreement.
Section 17. Change of Warrant Agent. The Warrant Agent may resign at any time
by so notifying the Company. If the Warrant Agent shall resign or become inca-
pable of acting as Warrant Agent, the Company shall appoint a successor to
such Warrant Agent. If the Company shall fail to make such appointment within
a period of 30 days after it has been notified in writing of such incapacity
or resignation by the Warrant Agent or by the registered holder of a Warrant
Certificate, then the registered holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a successor to
the Warrant Agent. Pending appointment of a successor to such Warrant Agent,
either by the Company or by such a court, the duties of the Warrant Agent
shall be carried out by the Company. The registered holders of a majority of
the unexercised Warrants shall be entitled at any time to remove the Warrant
Agent and appoint a successor to such Warrant Agent. Such successor to the
Warrant Agent need not be approved by the Company or the former Warrant Agent.
After appointment the successor to the Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; but the former Warrant
Agent shall, after the payment of all outstanding amounts owed to it hereun-
der, deliver and transfer to the successor to the Warrant Agent any property
at the time held by it hereunder and execute and deliver any further assur-
ance, conveyance, act or deed necessary for the purpose. Failure to give any
notice provided for in this Section 17, however, or any defect therein, shall
not affect the legality or validity of the appointment of a successor to the
Warrant Agent. The provisions of Section 16 with respect to any Warrant Agent
shall survive such Warrant Agent's resignation or removal.
19
Section 18. Notices to the Company and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by
the registered holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if telecopied to the number indicated be-
low or deposited in the mail, first class or registered, postage prepaid, ad-
dressed (until another telecopy number or address is filed in writing by the
Company with the Warrant Agent), as follows:
The Coastal Corporation
Coastal Tower
Nine ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Secretary
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
In case the Company shall fail to maintain such office or shall fail to give
such notice of any change in the location thereof, presentations may be made
and notices and demands may be served at the principal office of the Warrant
Agent.
Any notice pursuant to this Agreement to be given by the Company or by the
registered holder(s) of any Warrant Certificate to the Warrant Agent shall be
sufficiently given when and if telecopied to the number indicated below or de-
posited in the mail, first class or registered, postage prepaid, addressed
(until another telecopy number or address is filed in writing by the Warrant
Agent with the Company) to the Warrant as follows:
Attention: Corporate Trust Department
Telecopier No.:
Any notice to be mailed to a registered holder of Warrants shall be mailed to
each holder at its address as it appears on the Warrant Register maintained by
the Warrant Agent. Copies of any such communication shall also be mailed to
the Warrant Agent. The Warrant Agent shall furnish the Company promptly when
requested with a list of registered holders of Warrants for the purpose of
mailing any notice or communication to the registered holders of the Warrants
and at such other times as may be reasonably requested.
Section 19. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of
any registered holders of Warrant Certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may
20
be defective or inconsistent with any other provisions herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not, as evidenced by an opinion of counsel delivered to the Warrant Agent, in
any way adversely affect the interests of the holders of Warrant Certificates.
Any amendment or supplement to this Agreement that has an adverse effect on
the interests of holders shall require the written consent of registered hold-
ers of a majority of the then outstanding Warrants. However, the consent of
each registered holder of a Warrant affected shall be required for any amend-
ment pursuant to which the Exercise Price would be increased, the Exercise
Rate would be decreased or the period for exercise of the Warrants would be
shortened. The Warrant Agent shall be entitled to receive and, subject to Sec-
tion 16 shall be fully protected in relying upon an officers' certificate and
opinion of counsel as conclusive evidence that any such amendment or supple-
ment is authorized or permitted hereunder, that it is not inconsistent here-
with, and that it will be valid and binding upon the Company in accordance
with its terms. The Company may not sign any amendment or supplement until the
Company's board of directors approves it.
Section 20. Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of its respective successors and assigns hereunder.
Section 21. Termination. This Agreement shall terminate at p.m., Hous-
ton time, on , . The provisions of Section 16 hereof regarding
compensation, reimbursement and indemnification shall survive such termina-
tion. Notwithstanding the foregoing, this Agreement shall not terminate until
the obligations of the Company with respect to the delivery of Warrant Shares
to any holder of Warrants who exercises such Warrants prior to p.m., New
York time, on , have been satisfied.
Section 22. Governing Law. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTER-
NAL LAWS OF SAID STATE.
Section 23. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates and War-
rant
21
Shares any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrant Certificates and War-
rant Shares.
Section 24. Severability. The provisions of this Warrant Agreement are sever-
able, and if any clause or provision shall be held invalid, illegal or unen-
forceable in whole or in part in any jurisdiction, then such invalidity or un-
enforceability shall affect in that jurisdiction only such clause or provi-
sion, or part thereof, and shall not in any manner affect such clause or pro-
vision in any other jurisdiction or any other clause or provision of this War-
rant Agreement in any jurisdiction.
Section 25. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 26. Headings. The headings in this Agreement are for the convenience
of reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
The Coastal Corporation
By: ___________________________________________
Name:
Title:
___________________________________________,
as Warrant Agent
By: ___________________________________________
Name:
Title:
EXHIBIT A
[Form of Warrant Certificate]
[Face]
No. Warrants
Warrant Certificate
THE COASTAL CORPORATION
CUSIP No.:
This Warrant Certificate certifies that , or registered assigns, is
the registered holder of Warrants expiring , (the "Warrants") to
purchase Common Stock, par value $.33 1/3 per share (the "Common Stock"), of
THE COASTAL CORPORATION, a Delaware corporation (the "Company"). Each Warrant
entitles the registered holder upon exercise [from , , until] on or
before p.m. Houston time on , , to receive from the Company one
fully paid and nonassessable share of Common Stock (each such share, a "War-
rant Share") at the exercise price of $ per share (the "Exercise Price")
payable (i) in cash or (ii) by certified or official bank check. The Warrants
represented by this Warrant Certificate may be exercised upon surrender of
this Warrant Certificate and payment of the Exercise Price at the office of
the Warrant Agent designated for such purpose, but only subject to the condi-
tions set forth herein and in the Warrant Agreement referred to on the reverse
hereof.
The number of Warrant Shares issuable upon exercise of the Warrants is sub-
ject to adjustment upon the occurrence of certain events set forth in the War-
rant Agreement.
No Warrant may be exercised after p.m., New York time, on , ,
and to the extent not exercised by such time such Warrants shall expire.
Reference is hereby made to the further provisions of this Warrant Certifi-
cate set forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
A-2
This Warrant Certificate shall not be valid unless countersigned by the War-
rant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the internal laws of the State of New York.
IN WITNESS WHEREOF, The Coastal Corporation has caused this Warrant Certifi-
cate to be signed by its duly authorized officer.
Dated: , 199
The Coastal Corporation
By: __________________________________________
Title:
Countersigned:
as Warrant Agent
By: _________________________________
Authorized Signature
A-3
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly autho-
rized issue of Warrants expiring , , entitling the holder on exercise
to receive shares of Common Stock, par value $.33 1/3 per share, of the Com-
pany (the "Common Stock"), and are issued or to be issued pursuant to a War-
rant Agreement dated as of , (the "Warrant Agreement"), between
the Company and , as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company, the Warrant Agent and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy
of the Warrant Agreement may be obtained by the holder hereof upon written re-
quest to the Company. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Warrant Agreement.
Warrants may be exercised at any time on or (after and) before
p.m., New York time, on , . The holder of Warrants evidenced by
this Warrant Certificate may exercise them by surrendering this Warrant Cer-
tificate, with the form of election to purchase set forth hereon properly com-
pleted and executed, together with payment of the Exercise Price (i) in cash
or (ii) by certified or official bank check. In the event that upon any exer-
cise of Warrants evidenced hereby the number of Warrants exercised shall be
less than the total number of Warrants evidenced hereby, there shall be issued
to the holder hereof or his assignee a new Warrant Certificate evidencing the
number of Warrants not exercised. No adjustment shall be made for any divi-
dends on any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain events the
number of shares of Common Stock issuable upon the exercise of each Warrant
shall be adjusted. No fractions of a share of Common Stock will be issued upon
the exercise of any Warrant, but the Company will pay the cash value thereof
determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limi-
A-4
tations provided in the Warrant Agreement, but without payment of any service
charge, for another Warrant Certificate or Warrant Certificates of like tenor
evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certifi-
cate at the office of the Warrant Agent a new Certificate or Warrant Certifi-
▇▇▇▇▇ of like tenor and evidencing in the aggregate a like number of Warrants
shall be issued to the transferee(s) in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection there-
with.
The Company and the Warrant Agent may deem and treat the registered holder(s)
hereon as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, of any distribution to the holder(s) hereof,
and for all other purposes, and the Company and the Warrant Agent shall not be
affected by any notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitles any holder hereof to any rights of a stockholder of the
Company.
A-5
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise Warrants contain-
ing the right, represented by this Warrant Certificate, to receive
shares of Common Stock and herewith (check item) tenders payment for such
shares to the order of The Coastal Corporation in the amount of $ per
share of Common Stock in accordance with the terms hereof, as follows:
[_] $ in cash or by certified or official bank check to the order
of The Coastal Corporation; or
The undersigned requests that a certificate for such shares be registered
in the name of , whose address is , and
that such shares be delivered to , whose address is
.
If said numbers of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certif-
icate for Warrants representing the remaining balance of such
Warrants be registered in the name of , whose address
is , and that such Warrant Certificate
be delivered to , whose address is
.
_______________________________________________
Signature
Date: _________________________________________
_______________________________________________
Signature Guaranteed
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Warrant Agent)
A-6
ASSIGNMENT FORM
To assign this Warrant, fill in the form below: (I) or (we) assign and trans-
fer this Warrant to:
--------------------------------------------------------------------------------
(INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE)
and irrevocably appoint_____________________to transfer this Warrant on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Dated: _____________________ Your Signature: __________________________________
(SIGN EXACTLY AS NAME APPEARS ON THE FACE
OF THIS WARRANT)
__________________________________________
Signature Guaranteed
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Warrant Agent)