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EXHIBIT 4.22
WARRANT AGREEMENT
Dated as of
December 30, 1997
Between
TRANSAMERICAN REFINING CORPORATION
and
FIRST UNION NATIONAL BANK
as the Warrant Agent
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Warrants for
Common Stock of
TransAmerican Refining Corporation
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TABLE OF CONTENTS
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ARTICLE I
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.1 Form of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3 Execution and Delivery of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Loss or Mutilation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5 Transfer of Notes and Warrants Prior to Separation; Separation . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
Exercise Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.1 Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2 Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3 Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4 Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.5 Issuance of Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.6 Fractional Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.7 Reservation of Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.8 Cancellation of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.9 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
Antidilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.1 Adjustment of Exercise Price and Warrant Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2 Adjustment for Change in Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.3 Adjustment for Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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SECTION 4.4 Adjustment for Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.5 Adjustment for Common Stock Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.6 Adjustment for Convertible Securities Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.7 [Intentionally Omitted.] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.8 Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.9 When De Minimis Adjustment May Be Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.10 Adjustment to Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.11 When No Adjustment Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.12 Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.13 Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.14 Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.15 Form of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.16 Other Dilutive Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.17 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.18 Non-applicability of Article IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.1 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2 Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.3 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.4 Special Transfer Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5 Surrender of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.1 Appointment of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.2 Rights and Duties of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.3 Individual Rights of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.4 Warrant Agent's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.5 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.6 Successor Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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ARTICLE VII
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.1 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.2 SEC Reports and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.3 Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.4 Persons Benefitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.5 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.6 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.9 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.10 Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.11 Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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THIS WARRANT AGREEMENT (this "Agreement"), dated as of December 30,
1997, is between TRANSAMERICAN REFINING CORPORATION, a Texas corporation
(together with its permitted successors and assigns, the "Company"), and FIRST
UNION NATIONAL BANK, as warrant agent (together with its permitted successors
and assigns, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement, dated
December 22, 1997 (the "Purchase Agreement"), with ▇▇▇▇▇▇▇▇▇ & Company, Inc.
(the "Purchaser"), pursuant to which the Company has agreed to issue and sell to
the Purchaser 175,000 Units (as defined below), consisting of (i) $175,000,000
aggregate principal amount of 16% Senior Subordinated Notes due 2003, Series A
(the "Notes") and (ii) 175,000 warrants (together with the warrants (the
"Purchaser Warrants") to purchase shares of the Company's Common Stock (as
defined below) issued to the Purchaser pursuant to the Solicitation Agent
Agreement, dated December 22, 1997, among the Company, TransAmerican Energy
Corporation, a Delaware corporation, and the Purchaser, the "Warrants") to
purchase initially 2,335,245 shares (together with the shares of the Company's
Common Stock underlying the Purchaser Warrants, the "Warrant Shares") of the
Company's common stock, $0.01 par value per share (the "Common Stock"), at an
exercise price of $0.01 per share;
WHEREAS, the Notes will be issued pursuant to an indenture (the
"Indenture") to be dated as of December 30, 1997 between the Company and First
Union National Bank, as trustee (the "Trustee");
WHEREAS, the Warrants are to be issued pursuant to this Agreement;
WHEREAS, the Notes and the Warrants (other than the Purchaser Warrants)
(the "Unit Warrants") will be sold in Units, each Unit consisting of (i) one
Note in the principal amount of $1,000 and (ii) one Warrant to purchase
initially 13.344257 Warrant Shares at an exercise price of $0.01 per share (the
"Units");
WHEREAS, prior to Separation (as defined below), record ownership of
the Notes and beneficial ownership of the Unit Warrants will be evidenced by
record ownership of the Units;
WHEREAS, definitive certificates (the "Custodian Warrants") evidencing
the Unit Warrants will be held by the Warrant Agent as custodian for the
registered holders of the Units;
WHEREAS, the Company further desires the Warrant Agent to act on behalf
of the Company in connection with the issuances, division, transfer, exchange,
substitution and exercise of the Warrants, and the Warrant Agent is willing to
so act; and
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NOW, THEREFORE, each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the holders of Warrants (or
until Separation (as defined below), the registered holders of Units) (each a
"Holder"):
ARTICLE I
Definitions
SECTION 1.1 Definitions. Capitalized terms used but not defined
herein shall have the respective meanings given to such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" of any specified Person means (i) any other Person
which, directly or indirectly, is controlling or controlled by or under direct
or indirect common control with such specified Person, or (ii) any other Person
who is a director or executive officer (A) of such Person, (B) of any subsidiary
of such specified Person, or (C) of any Person described in clause (i) above.
For purposes of this definition, "control," when used with respect to any
specified 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. Affiliate shall also
mean any beneficial owner of shares representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or warrants
to purchase such Voting Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Agent Member" has the meaning given to such term in Section 5.3.
"Board" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means any day other than (i) Saturday or Sunday,
(ii) or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to be closed.
"Common Stock" has the meaning given to such term in the recitals
to this Agreement.
"Company" has the meaning given to such term in the preamble to
this Agreement.
"Current Market Value" per share of Common Stock or any other
security at any date means, on any date of determination (a) the average of the
daily closing
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sale prices for each of 15 trading days immediately preceding such date (or
such shorter number of days during which such security has been listed or
traded), if the security has been listed on the New York Stock Exchange, the
American Stock Exchange or other national securities exchange or the NASDAQ
National Market for at least 10 trading days prior to such date, (b) if such
security is not so listed or traded, the average of the daily closing bid
prices for each of the 15 trading days immediately preceding such date (or such
shorter number of days during which such security had been quoted), if the
security has been quoted on a national over-the-counter market for at least 10
trading days, and (c) otherwise, the value of the security most recently
determined as of a date within the six months preceding such day by the Board.
"Definitive Warrants" has the meaning given to such term in
Section 2.1.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC pursuant thereto.
"Exercise Date" has the meaning given to such term in Section 3.2.
"Exercise Price" has the meaning given to such term in Section
3.1.
"Expiration Date" has the meaning given to such term in Section
3.2.
"Global Warrant" has the meaning given to such term in Section
2.1.
"Global Warrants" has the meaning given to such term in Section
2.1.
"Holders" has the meaning given to such term in the recitals to
this Agreement.
"Indenture" has the meaning given to such term in the recitals to
this Agreement.
"Institutional Accredited Investor" has the meaning given to such
term in Section 2.3.
"Issue Date" means the date on which Warrants are initially
issued, which is December 30, 1997.
"Notes" has the meaning given to such term in the recitals to this
Agreement.
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"Offering Circular" means the final Offering Circular of the
Company dated December 23, 1997 relating to the issuance and sale of the Units.
"Officer" means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President or the Treasurer of the Company.
"Old Warrants" means the common stock purchase warrants of the
Company issued pursuant to the warrant agreement, dated as of February 23, 1995,
between the Company and First Union National Bank, or successor warrant agent,
as amended.
"Person" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Redeemable Stock" means, with respect to any Person, any capital
stock that by its terms (or by the terms of any security into which it is
convertible or exchangeable) or otherwise (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may
become redeemable or repurchasable at the option of the holder thereof, in whole
or in part, or (iii) is convertible or exchangeable for indebtedness.
"Restricted Definitive Warrant" has the meaning given to such term
in Section 2.3.
"Restricted Warrant" means a Global Warrant or a Restricted
Definitive Warrant.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Transfer Agent" has the meaning given to such term in
Section 3.5.
"Voting Stock" means all classes of capital stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Warrant Agent" has the meaning given to such term in the
Recitals.
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"Warrant Certificates" has the meaning given to such term in
Section 2.1.
"Warrant Number" has the meaning given to such term in Article IV.
"Warrant Shares" means the Common Stock (and other securities)
issuable upon the exercise of the Warrants.
"Warrants" has the meaning given to such term in the Recitals.
SECTION 1.2 Rules of Construction. Unless the text otherwise
requires: (i) a term has the meaning assigned to it; (ii) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time; (iii) "or" is not
exclusive; (iv) "including" means including, without limitation; (v) references
to "Section" and "Article" refer to Sections and Articles of this Agreement,
unless the context clearly requires otherwise; and (vi) words in the singular
include the plural and words in the plural include the singular.
ARTICLE II
Warrant Certificates
SECTION 2.1 Form of Warrant Certificates. Prior to Separation,
beneficial ownership of the Unit Warrants will be evidenced by record ownership
of the Units. From and after Separation, the Unit Warrants will be issued (a) in
global form (the "Global Warrant"), substantially in the form of Exhibit A
attached hereto (including the text accompanying the footnotes thereto), and (b)
in definitive form (the "Definitive Warrants"), substantially in the form of
Exhibit A (excluding the text accompanying the footnotes thereto). The Purchaser
Warrants will be issued as a Definitive Warrant or Warrants. The Global Warrant
shall represent the aggregate amount of outstanding Warrants from time to time
endorsed thereon; provided that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the Global
Warrant to reflect the amount of any increase or decrease in the amount of
outstanding Warrants represented thereby shall be made by the Warrant Agent in
accordance with instructions given by the holder thereof.
The Depository with respect to the Global Warrant (the
"Depository") shall be The Depository Trust Company until a successor shall be
appointed by the Company and become such Depository. The Global Warrant shall be
registered in the name of the Depository, or the nominee of such Depository. So
long as the Depository or its nominee is the registered owner of such Global
Warrant it will be deemed the sole owner and holder of such Global Warrant for
all purposes hereunder and under such Global Warrant. The
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certificates (the "Warrant Certificates") evidencing the Global Warrant and the
Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto. Neither the
Company nor the Warrant Agent will have any responsibility or liability for any
aspects of the records relating to beneficial ownership interest of the Global
Warrant in the name of the Depository or its nominee or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 2.2 Legends. Unless and until a Warrant or Warrant Share
is sold under an effective registration statement, each Warrant Certificate
evidencing the Global Warrants and the Definitive Warrants (and all Warrant
Certificates issued in exchange therefor or substitution thereof) and each
certificate representing the Warrant Shares shall bear a legend in substantially
the following form (with any appropriate modification for the Warrant Shares):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER
THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH TRANSAMERICAN REFINING CORPORATION ("THE
COMPANY") OR ANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE
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SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE WARRANT
AGENT.
SECTION 2.3 Execution and Delivery of Warrant Certificates.
Warrant Certificates evidencing Warrants to purchase initially an aggregate of
up to 3,364,636 Warrant Shares may be executed, on or after the Issue Date, 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 Agreement.
The Warrant Certificates shall be executed on behalf of the
Company by an Officer of the Company either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be countersigned manually by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any Officer of the Company whose signature shall have been placed upon any
of the Warrant Certificates shall cease to be such Officer of the Company before
countersignature by the Warrant Agent and issuance 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.
Subject to Section 2.5, Warrants offered and sold in their initial
distribution to a limited number of institutions that are accredited investors
(which are not QIBs) within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (and institutions in which all the equity owners are such
accredited investors) (together referred to as "Institutional Accredited
Investors") in transactions exempt from registration under the Securities Act
will be delivered, after separation, in certificated fully registered form (a
"Restricted Definitive Warrant") substantially in the form set forth in Exhibit
A. Such Warrants shall be delivered to such Institutional Accredited Investors
only upon the execution and delivery to the Company and the Initial Purchaser of
an institutional accredited investor transferee compliance letter (an "Investor
Letter") substantially in the form of Annex A to the Offering Circular.
Restricted Definitive Warrants may not be transferred or exchanged for
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interests in the Global Warrant or another Restricted Definitive Warrant,
except as provided herein.
SECTION 2.4 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 cancellation 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 Certificate under this Section
2.4, 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 reasonable fees and expenses of the Warrant Agent and of
counsel to the Company) in connection therewith. Every new Warrant Certificate
executed and delivered pursuant to this Section 2.4 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 under applicable law, 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 Section 2.4 are exclusive and shall preclude (to the extent
lawful) all other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary, with respect to the replacement
of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 2.5. Transfers of Notes and Warrants Prior to Separation;
Separation.
The Custodian Warrants will be held by the Warrant Agent, as custodian
for the holders of the Units, until such time as the registered holder of a Unit
shall have surrendered such Unit to the Warrant Agent for the exchange of such
Unit, in whole or in part, for a Definitive Warrant or Warrants and for a Note
or Notes of a like aggregate principal amount of authorized denominations (such
surrender and exchange, together with the exchange for the Global Warrant
referred to below, are herein referred to as a "Separation" and the related
Warrants are referred to as being "Separated"); provided, that Separation may
not occur until the earlier of (i) one year from the date hereof, (ii)
commencement of the Exchange Offer (as defined in the Registration Rights
Agreement, dated the date hereof, between the Company and the Purchaser) and
(iii) such other date as may be determined by the Purchaser. Each Unit presented
for Separation shall be duly endorsed by the registered holder thereof or by the
duly appointed legal representative thereof or by a duly authorized
attorney-in-fact. The Warrant Agent shall deliver such Unit to the Trustee
pursuant to the provisions of the Indenture, with instructions to issue Notes in
authorized denominations for an aggregate principal amount equal to the
aggregate principal amount of the Notes surrendered in the name
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of each registered holder or holders. The Warrant Agent, as custodian, shall
deliver (or cause to be delivered) the Notes so received from the Trustee and a
Warrant Certificate or Certificates executed by the Company and countersigned
by the Warrant Agent in the name of such registered holder or holders for such
aggregate number of Warrants as shall equal Warrants so exchanged for
Separation, in each case, bearing numbers or other distinguishing symbols not
contemporaneously outstanding to the holder or holders entitled thereto.
ARTICLE III
Exercise Terms
SECTION 3.1 Exercise Price. Each Warrant shall initially entitle
the Holder thereof, subject to adjustment pursuant to the terms of this
Agreement, to purchase 13.344257 shares of Common Stock for an exercise price of
$0.01 per share of Common Stock (the "Exercise Price"). The Warrant Number and
Exercise Price are both subject to adjustment as set forth in Article IV.
SECTION 3.2 Exercise Period. (a) Subject to the terms and
conditions set forth herein, the Warrants shall only be exercisable at any time
or from time to time on any Business Day on or after the first anniversary of
the Issue Date (the "Exercise Date").
(b) No Warrant shall be exercisable after June 30, 2003 (the
"Expiration Date").
SECTION 3.3 Expiration. A Warrant shall terminate and become void
as of the earlier of (i) the close of business on the Expiration Date or (ii)
the date such Warrant is exercised. The Company shall give notice not less than
90, and not more than 120, days prior to the Expiration Date to the Holders of
all then outstanding Warrants to the effect that the Warrants will terminate and
become void as of the close of business on the Expiration Date; provided,
however, that notwithstanding that the Company may fail to give notice as
provided in this Section 3.3, the Warrants will terminate and become void on the
Expiration Date.
SECTION 3.4 Manner of Exercise. Warrants may be exercised at any
time on or after the Exercise Date by surrendering to the Warrant Agent the
Warrant Certificates at any office or agency maintained for that purpose,
together with the form of election to purchase Common Stock on the reverse
thereof duly completed and signed by the Holder thereof and paying in full the
Exercise Price for each Warrant exercised and any other amounts required to be
paid pursuant to Section 5.2 hereof. Payment of the Exercise Price (and any
other required amounts) shall be made in the form of cash or a certified or
official bank check payable to the order of the Company. Subject to Section 3.2,
the rights represented by the Warrants shall be exercisable at the election of
the Holders thereof either in
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full at any time or from time to time in part and in the event that a Warrant
Certificate is surrendered for exercise in respect of less than all the Warrant
Shares purchasable on such exercise at any time prior to the expiration of the
Exercise Period a new Warrant Certificate exercisable for the remaining Warrant
Shares will be issued. The Warrant Agent shall countersign and deliver the
required new Warrant Certificates, and the Company, at the Warrant Agent's
request, shall supply the Warrant Agent with Warrant Certificates duly signed
on behalf of the Company for such purpose.
SECTION 3.5 Issuance of Warrant Shares. Upon the surrender of
Warrant Certificates, as set forth in Section 3.4, the Company shall issue and
cause the Warrant Agent or, if appointed, a transfer agent for the Common Stock
("Stock Transfer Agent") to countersign and deliver to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants or other securities or property to which it
is entitled, registered or otherwise, to the Person or Persons entitled to
receive the same, together with cash as provided in Section 3.6 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. 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 Warrant
Certificates and payment of the per share Exercise Price, as aforesaid.
SECTION 3.6 Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be exercised in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable pursuant thereto. If any fraction of a Warrant Share would, except
for the provisions of this Section 3.6, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall pay an amount in cash
equal to the same fraction of the Current Market Value for one share of Common
Stock less the portion of the Exercise Price attributable thereto, rounded to
the nearest whole cent.
SECTION 3.7 Reservation of Warrant Shares. The Company shall at
all times keep reserved out of its authorized shares of Common Stock, a number
of shares of Common Stock sufficient to provide for the exercise of all
outstanding Warrants. The registrar for the Common Stock (the "Registrar") shall
at all times until the expiration of the Exercise Period 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 Stock Transfer Agent. The Company will
supply such Stock Transfer Agent with duly executed stock certificates for such
purpose and will itself provide or otherwise make available any cash which may
be payable as provided in Section 3.6. The Company will furnish to such Stock
Transfer Agent a copy of all notices of adjustments and certificates related
thereto transmitted to each Holder.
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The Company covenants that all shares of Common Stock that may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights, free from all taxes and free from all liens, charges
and security interests, created by or through the Company, with respect to the
issue thereof.
SECTION 3.8 Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall be canceled by it and retired. The Warrant Agent shall
cancel all Warrant Certificates properly surrendered for exchange, substitution,
transfer or exercise. The Warrant Agent shall destroy canceled Warrant
Certificates held by it and deliver a certificate of destruction to the Company.
The Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all monies received by the Warrant
Agent for the purchase of Warrant Shares through the exercise of such Warrants.
SECTION 3.9 Compliance with Law. (a) Notwithstanding anything in
this Agreement to the contrary, in no event shall a Holder be entitled to
exercise a Warrant, unless (i) a registration statement filed under the
Securities Act in respect of the issuance of the Warrant Shares is then
effective or (ii) in the opinion of counsel addressed to the Warrant Agent an
exemption from the registration requirements is available under the Securities
Act for the issuance of the Warrant Shares (and the delivery of any other
securities for which the Warrants may at the time be exercisable) at the time of
such exercise.
(b) If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants require, under any other Federal or state law
or applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange before such shares may be issued upon
exercise, the Company will in good faith and as expeditiously as possible
endeavor also to cause such shares to be duly registered or approved by such
governmental authority or listed on the relevant national securities exchange,
as the case may be.
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ARTICLE IV
Antidilution Provisions
SECTION 4.1 Adjustment of Exercise Price and Warrant Number. The
number of shares of Common Stock issuable upon the exercise of each Warrant (the
"Warrant Number") is initially 13.344257. The Warrant Number is subject to
adjustment from time to time upon the occurrence of the events enumerated in, or
as otherwise provided in, this Article IV .
SECTION 4.2 Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(2) subdivides or reclassifies its outstanding shares
of Common Stock into a greater number of shares;
(3) combines or reclassifies its outstanding shares of
Common Stock into a smaller number of shares;
(4) makes a distribution on Common Stock in shares of
its capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock (other than reclassifications arising solely as
a result of a change in the par value or no par value of the Common Stock);
then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which it would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
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Such adjustment shall be made successively whenever any event listed
above shall occur. If the occurrence of any event listed above results in an
adjustment under Section 4.3 or 4.4 below, no further adjustment shall be made
under this Section 4.2.
The Company shall not issue shares of Common Stock as a dividend or
distribution on any class of capital stock other than Common Stock unless (i)
such dividend or distribution is not prohibited by the Indenture and (ii) the
Warrant Holders also receive such dividend or distribution on a ratable basis or
the appropriate adjustment to the Warrant Number is made under this Article IV.
SECTION 4.3 Adjustment for Rights Issue.
If the Company distributes (and receives no consideration therefor) any
rights, options or warrants (whether or not immediately exercisable) to holders
of any class of its Common Stock entitling them to purchase shares of Common
Stock at a price per share less than the Current Market Value per share on the
record date relating to such distribution, the Warrant Number shall be adjusted
in accordance with the formula:
W' = W x O + N
---------
O + N x P
-----
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date for any
such distribution.
O = the number of shares of Common Stock outstanding on the record
date for any such distribu- tion.
N = the number of additional shares of Common Stock issuable upon
exercise of such rights, options or warrants.
P = the exercise price per share of such rights, options or
warrants.
M = the Current Market Value per share of Common Stock on the record
date for any such distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of
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the period during which such rights, options or warrants are exercisable, not
all rights, options or warrants shall have been exercised, the adjusted Warrant
Number shall be immediately readjusted to what it would have been if "N" in the
above formula had been the number of shares actually issued.
SECTION 4.4 Adjustment for Other Distributions.
If the Company distributes to holders of any class of its Common Stock
(as such) (i) any evidences of indebtedness of the Company or any of its
subsidiaries, (ii) any assets of the Company or any of its subsidiaries, or
(iii) any rights, options or warrants to acquire any of the foregoing or to
acquire any other securities of the Company, the Warrant Number shall be
adjusted in accordance with the formula:
W' = W x M
-----
M - F
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date
mentioned below.
M = the Current Market Value per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date mentioned below of the
shares, indebtedness, as- sets, rights, options or warrants
distributable to the holder of one share of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If an adjustment is made pursuant to this subsection (c) as a result of the
issuance of rights, options or warrants and at the end of the period during
which any such rights, options or warrants are exercisable, not all such rights,
options or warrants shall have been exercised, the adjusted Warrant Number shall
be immediately readjusted as if "F" in the above formula was the fair market
value on the record date of the indebtedness or assets actually distributed upon
exercise of such rights, options or warrants divided by the number of shares of
Common Stock outstanding on the record date.
In the event that "F" in the above formula is greater than or equal to
"M" in the above formula, then each Holder of the Warrants, notwithstanding that
such Holder's Warrants
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have not been exercised, shall receive the distribution referred to in this
Section 4.4 on the basis of number of Warrant Shares underlying the Warrants
held by each such Holder.
This subsection does not apply to rights, options or warrants referred
to in Section 4.3.
SECTION 4.5 Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the Current Market Value per share on the date the Company fixes
the offering price of such additional shares, the Warrant Number shall be
adjusted in accordance with the formula:
W' = W x A
------
O + P
--
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares of Common Stock.
P = the aggregate consideration received for the issuance of such
additional shares of Common Stock.
M = the Current Market Value per share of Common Stock on the date
of issuance of such addi- tional shares.
A = the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares of Common Stock.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This Section 4.5 does not apply to any of the transactions described in
Section 4.2 or to the issuance of Common Stock upon exercise of the Old
Warrants.
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SECTION 4.6 Adjustment for Convertible Securities Issue.
If the Company issues any options, warrants or other securities
convertible into or exchangeable or exercisable for Common Stock (other than
securities issued in transactions described in Sections 4.3 or 4.4) for a
consideration per share of Common Stock initially deliverable upon conversion,
exchange or exercise of such securities less than the Current Market Value per
share on the date of issuance of such securities, the Warrant Number shall be
adjusted in accordance with this formula:
W' = W x O + D
-----
O + P
-
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the sum of the aggregate consideration received for the issuance
of such securities and the aggregate minimum consideration
receivable by the Company for issuance of Common Stock upon
conversion or in exchange for, or upon exercise of, such
securities.
M = the Current Market Value per share of Common Stock on the date
of issuance of such securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion or in exchange for or upon exercise of such securities
at the initial conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when the conversion, exchange or
exercise rights of such securities have expired or been terminated, then the
adjusted Warrant Number shall promptly be readjusted to the adjusted Warrant
Number which would then be in effect had the adjustment upon the issuance of
such securities been made on the basis of the actual number of shares of Common
Stock issued upon conversion, exchange or exercise of such securities. If the
aggregate minimum
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consideration receivable by the Company for issuance of Common Stock upon
conversion or in exchange for, or upon exercise of, such securities shall be
increased by virtue of provisions therein contained or upon the arrival of a
specified date or the happening of a specified event, then the Warrant Number
shall promptly be readjusted to the Warrant Number which would then be in
effect had the adjustment upon the issuance of such securities been made on the
basis of such increased minimum consideration.
This Section 4.6 does not apply to the issuance of the Warrants or to
any of the transactions described in Section 4.3.
SECTION 4.7 [INTENTIONALLY OMITTED.]
SECTION 4.8 Consideration Received.
For purposes of any computation respecting consideration received
pursuant to Sections 4.4, 4.5 and 4.6, the following shall apply:
(1) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash (without
any deduction being made for any commissions, discounts or other expenses
incurred by the Company for any underwriting of the issue or otherwise in
connection therewith);
(2) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market value
thereof (irrespective of the accounting treatment thereof) as determined
in good faith by the Board; and
(3) in the case of the issuance of options, warrants
or other securities convertible into or exchangeable or exercisable for
shares of Common Stock, the aggregate consideration received therefor shall
be deemed to be the consideration received by the Company for the issuance
of such securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion, exchange or exercise thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
SECTION 4.9 When De Minimis Adjustment May Be Deferred.
No adjustment in the Warrant Number need be made unless the adjustment
would require an increase or decrease of at least 0.5% in the Warrant Number.
Any adjustment that is
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not made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the date
on which a Warrant is exercised.
All calculations under this Article IV shall be made to the nearest
1/100th of a share.
SECTION 4.10 Adjustment to Exercise Price.
Upon each adjustment to the Warrant Number pursuant to this Article IV,
the Exercise Price shall be adjusted so that it is equal to the Exercise Price
in effect immediately prior to such adjustment multiplied by a quotient, the
numerator of which is the Warrant Number in effect immediately prior to such
adjustment, and the denominator of which is the Warrant Number in effect
immediately after such adjustment; provided, that the Exercise Price shall not
be adjusted below the lesser of $0.01 per share of Common Stock and the then par
value per share of Common Stock.
SECTION 4.11 When No Adjustment Required.
If an adjustment is made upon the establishment of a record date for a
distribution subject to Sections 4.2, 4.3 or 4.4 hereof and such distribution is
subsequently cancelled, the Warrant Number and Exercise Price then in effect
shall be readjusted, effective as of the date when the Board determines to
cancel such distribution, to that which would have been in effect if such record
date had not been fixed.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the amount of cash into which such Warrants are
exercisable. Interest will not accrue on the cash.
SECTION 4.12 Notice of Adjustment.
Whenever the Warrant Number or Exercise Price is adjusted, The Company
shall provide the notices required by Section 7.7 hereof.
SECTION 4.13 Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by any
amount for any period of time (including, without limitation, permanently) if
the period is at least 20 days and if the reduction is irrevocable during the
period.
Whenever the Exercise Price is reduced, the Company shall mail to the
Holders a notice of the reduction. The Company shall mail the notice at least 15
days before the date the reduced Exercise Price takes effect. The notice shall
state the reduced Exercise Price and the period it will be in effect.
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A reduction of the Exercise Price under this Section 4.13 (other than a
permanent reduction) does not change or adjust the Exercise Price otherwise in
effect for purposes of Sections 4.2, 4.3, 4.4, 4.5 or 4.6.
SECTION 4.14 Reorganizations.
In case of any capital reorganization, other than in the cases referred
to in Sections 4.2, 4.3, 4.4, 4.5 or 4.6 hereof, or the consolidation or merger
of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock
into shares of other stock or other securities or property), or the sale of the
property of the Company as an entirety or substantially as an entirety
(collectively, such actions being hereinafter referred to as "Reorganizations"),
there shall thereafter be deliverable upon exercise of any Warrant (in lieu of
the number of shares of Common Stock theretofore deliverable) the amount of
cash, the number of shares of stock or other securities or property to which a
holder of the number of shares of Common Stock that would otherwise have been
deliverable upon the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately prior to
such Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of the Company, whose determination shall
be described in a duly adopted resolution certified by The Company's Secretary
or Assistant Secretary, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Holders so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization or the corporation
purchasing or leasing such assets or other appropriate corporation or entity
shall expressly assume, by a supplemental Warrant Agreement or other
acknowledgment executed and delivered to the Holder(s), the obligation to
deliver to each such Holder such cash, such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase, and all other obligations and liabilities under this
Agreement.
SECTION 4.15 Form of Warrants.
Irrespective of any adjustments 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.
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SECTION 4.16 Other Dilutive Events.
In case any event shall occur as to which the provisions of this
Article IV are not strictly applicable but the failure to make any adjustment
would not fairly protect the purchase rights represented by the Warrants in
accordance with the essential intent and principles of such sections, then, in
each such case, the Company shall make a good faith adjustment to the Exercise
Price and Warrant Number into which each Warrant is exercisable in accordance
with the intent of this Article IV and, upon the written request of the holders
of a majority of the Warrants, shall appoint a firm of independent certified
public accountants of recognized national standing (which may be the regular
auditors of the Company), which shall give their opinion upon the adjustment, if
any, on a basis consistent with the essential intent and principles established
in this Article IV, necessary to preserve, without dilution, the purchase rights
represented by these Warrants. Upon receipt of such opinion, the Company shall
promptly mail a copy thereof to the Holder of each Warrant and shall make the
adjustments described therein.
SECTION 4.17 Miscellaneous.
For purpose of this Article IV the term "shares of Common Stock" shall
mean (i) shares of any class of stock designated as Common Stock of the Company
as of the date of this Agreement, (ii) shares of any other class of stock
resulting from successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value and (iii) shares of Common Stock of the Company issuable
upon exercise of options, warrants or rights to purchase Common Stock of the
Company or upon conversion or exchange of securities convertible into or
exchangeable for shares of Common Stock of the Company outstanding at the date
of determination. In the event that at any time, as a result of an adjustment
made pursuant to this Article IV, the holders of Warrants shall become entitled
to purchase any securities of The Company other than, or in addition to, shares
of Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in Sections 4.2 through
4.16 of this Article IV, inclusive, and the provisions of this Agreement with
respect to the Warrant Shares or the Common Stock shall apply on like terms to
any such other securities.
SECTION 4.18 Non-applicability of Article IV.
The provisions of this Article IV do not apply to (i) a change solely
in the par value or no par value of the Common Stock, provided that the Company
shall not increase the par value to exceed the Exercise Price, (ii) the
conversion or exchange (other than pursuant to a reclassification), in any case
on a share-for-share basis, of Common Stock for non-voting common stock that has
rights (other than voting rights) identical to the Common Stock, or of such
non-voting stock for Common Stock, (iii) the issuance to employees of
Transamerican Energy
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Corporation or any of its subsidiaries of stock or stock options in an amount
which, upon purchase or exercise, as the case may be, would represent in the
aggregate, less than 10% of the Company's Common Stock on a fully-diluted
basis, (iv) any distribution by the Company of Capital Stock of TransTexas Gas
Corporation to a holder or holders of Common Stock, or (v) any exercise of
Warrants.
ARTICLE V
Transferability
SECTION 5.1 Transfer and Exchange. The Company shall cause to be
kept at the office of the Warrant Agent a register in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Warrant Certificates and transfers or exchanges of Warrant
Certificates as herein provided. All Warrant Certificates issued upon any
registration of transfer or exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefit under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.
A Holder may transfer its Warrants only by 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, any agent of the Company or the Warrant Agent may
treat the Person in whose name the Warrants are registered as the owner thereof
for all purposes and as the Person entitled to exercise the rights represented
thereby, any notice to the contrary notwithstanding. Furthermore, any Holder of
a Global Warrant shall, by acceptance of such Global Warrant, agree that
transfers of beneficial interests in such Global Warrant may be effected only
through a book-entry system maintained by the Holder of such Global Warrant (or
its agent), and that ownership of a beneficial interest in the Warrants
represented thereby shall be required to be reflected in a book entry. When
Warrant Certificates are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register the transfer or
make the exchange in accordance with the provisions hereof.
To permit registrations of transfer and exchanges, the Company
shall make available to the Warrant Agent a sufficient number of executed
Warrant Certificates to effect such registrations of transfers and exchanges. No
service charge shall be made to the Holder for any registration of transfer or
exchange of Warrants, but the Company may require from the transferring or
exchanging Holder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable upon exchanges pursuant to Section 2.4 and
exchanges in respect of portions of Warrants not exercised and the Company may
deduct such taxes from any payment of money to be made and such transfer or
exchange shall not be consummated (if such taxes are not deducted in full)
unless or until the Holder shall have paid to the Company the amount of such tax
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or shall have established to the satisfaction of the Company and the Warrant
Agent that such tax has been paid.
SECTION 5.2 Registration, Registration of Transfer and Exchange.
(a) Transfer and Exchange of Definitive Warrants. When Definitive Warrants
are presented to the Warrant Agent with a request (i) to register the transfer
of the Definitive Warrant or (ii) to exchange such Definitive Warrants for an
equal number of Definitive 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; provided, however, that the
Definitive Warrants so presented have been duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Warrant Agent, duly
executed by the holder thereof or by his attorney, duly authorized in writing;
(b) Transfer of a Definitive Warrant for a Beneficial Interest in Global
Warrant. A Definitive Warrant may be exchanged for a beneficial interest in the
Global Warrant only upon receipt by the Warrant Agent of a Definitive Warrant,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Warrant Agent, together with written instructions directing
the Warrant Agent to make an endorsement on the Global Warrant to reflect an
increase in the number of Warrants and Warrant Shares represented by the Global
Warrant, and then the Warrant Agent shall cancel such Definitive Warrant and
cause the number of Warrants and Warrant Shares represented by the Global
Warrant to be increased accordingly. If no Global Warrant is then outstanding,
the Company shall issue and the Warrant Agent shall countersign a new Global
Warrant representing the appropriate number of Warrants and Warrant Shares.
(c) Transfer and Exchange of Global Warrant. The transfer and exchange of
the Global Warrant or beneficial interests therein shall be effected through the
Depository, in accordance with this Warrant Agreement and the procedures of the
Depository therefor. Notwithstanding any other provisions of this Warrant
Agreement, the Global Warrant may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository: provided, that if:
(i) the Depository notifies the Company that the Depository is
unwilling or unable to continue as Depository for the Global Warrant and a
successor Depository for the Global Warrant is not appointed by the Company
within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants under
this Warrant Agreement.
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then the Company shall execute and the Warrant Agent shall countersign and
deliver, Definitive Warrants in an aggregate number equal to the number of
Warrants evidenced by the Global Warrant, in exchange for such Global
Warrant.
(d) Transfer of a Beneficial Interest in Global Warrant for a
Definitive Warrant. Upon receipt by the Warrant Agent of written transfer
instructions (or such other form of instructions as is customary for the
Depository) from the Depository (or its nominee) on behalf of any person having
a beneficial interest in the Global Warrant, the Warrant Agent shall cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Warrant Agent (the "Standing Instructions"), the number of
Warrants and Warrant Shares represented by the Global Warrant to be reduced and,
following such reduction, the Company shall execute and the Warrant Agent shall
countersign and deliver to the transferee, as the case may be, a Definitive
Warrant. Definitive Warrants issued in exchange for a beneficial interest in the
Global Warrant shall be registered in such names and in such authorized
denominations as the Depository shall instruct the Warrant Agent.
(e) Cancellation and/or Adjustment of Global Warrant. At such time as
all beneficial interests in the Global Warrant have either been exchanged for
Definitive Warrants, exercised or cancelled, the Global Warrant shall be
returned to or retained and cancelled by the Warrant Agent. At any time prior to
such cancellation, if any beneficial interest in the Global Warrant is exchanged
for Definitive Warrants, exercised or cancelled, the number of Warrants and
Warrant Shares represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant by the Warrant Agent to reflect
such reduction.
SECTION 5.3 [INTENTIONALLY OMITTED].
SECTION 5.4 Special Transfer Provisions. The following provisions
shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
Subject to Section 2.5, the following provisions shall apply with respect to the
registration of any proposed transfer of Warrants to any Institutional
Accredited Investor that is not a QIB (excluding Non-U.S. Persons):
(i) The Warrant Agent shall register the transfer of any Warrant
Certificate, if (x)(A) the requested transfer is at least two years after
the Issue Date or (B) the proposed transferee has delivered to the Warrant
Agent certificates substantially in the forms of Exhibit B hereto and (y)
if requested by the Warrant Agent or the Company, the proposed transferee
has delivered to the Warrant Agent or the Company, an opinion of counsel
acceptable to the Warrant Agent or the Company that such transfer is in
compliance with the Securities Act.
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(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Warrant, upon receipt by the Warrant
Agent of (x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with DTC's and the Warrant Agent's
procedures, the Warrant Agent shall reflect on its books and records the
date and a decrease in the number of Warrants represented by the Global
Warrant in an amount equal to the number of Warrants represented by the
Global Warrant to be transferred, and the Company shall execute, and the
Warrant Agent shall countersign and deliver, one or more Restricted
Definitive Warrants of like tenor and amount.
(b) Transfers to QIBs. Subject to Section 2.5, the following
provisions shall apply with respect to the registration of any proposed transfer
of Warrants to a QIB:
(i) If the Warrants to be transferred are represented by (x)
Restricted Definitive Warrants, the Warrant Agent shall register the
transfer if it has received from such transferor a certificate
substantially in the form of Exhibit B hereto that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Warrant Certificate
stating, or has otherwise advised the Company and the Warrant Agent in
writing, that it is purchasing the Warrants for its own account or an
account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (y) an interest in the Global
Warrant, the transfer of such interest may be effected only through the
book-entry system maintained by DTC.
(ii) If the proposed transferee is an Agent Member, and the
Warrants to be transferred are represented by Restricted Definitive
Warrants, upon receipt by the Warrant Agent of the documents referred to in
clause (i) above and instructions given in accordance with DTC's and the
Warrant Agent's procedures, the Warrant Agent shall reflect on its books
and records the date and an increase in the number of Warrants represented
by the Global Warrant in an amount equal to the number of Warrants
represented by the Restricted Definitive Warrants, and the Warrant Agent
shall cancel the Restricted Definitive Warrant.
(c) General. By its acceptance of any Warrants represented by a
Warrant Certificate bearing the legend in Section 2.2, each Holder of such
Warrants acknowledges the restrictions on transfer of such Warrants set forth in
this Agreement and in the legend and agrees that it will transfer such Warrants
only as provided in this Agreement. The Warrant Agent shall not register a
transfer of any Warrants unless such transfer complies with the requirements of
this Section 5.4. In connection with any transfer of Warrants, each Holder
agrees by its acceptance of Warrants to furnish the Warrant Agent or the Company
such certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being
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made pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act; provided, however, that the
Warrant Agent shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information. The Warrant Agent's only
obligation to enforce the transfer restrictions of this Agreement shall be to
require the certifications and opinions specifically required by this Section
5.4 as a condition to a transfer.
(d) Records. The Warrant Agent shall retain copies of all letters,
notices and other written communications received pursuant to Section 5.3 hereof
or this Section 5.4. 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.
SECTION 5.5 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 canceled by
the Warrant Agent and shall not be reissued by the Company and, except as
provided in this Article V in case of an exchange or in Article III hereof in
case of the exercise or repurchase of less than all the Warrants represented
thereby or 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 canceled Warrant
Certificates as the Company may direct in writing.
ARTICLE VI
Warrant Agent
SECTION 6.1 Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
provisions of this Agreement and the Warrant Agent hereby accepts such
appointment.
SECTION 6.2 Rights and Duties of Warrant Agent.
(a) Agent for the Company. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligation or
relationship or agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(b) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and complete
authorization and protection in respect
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of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice of such counsel.
(c) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.
(d) No Implied Obligations. The Warrant Agent shall be obligated
to perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it in any expense or liability for which it does not
receive indemnity if such indemnity is reasonably requested. The Warrant Agent
shall not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates countersigned by the Warrant Agent
and delivered by it to the Holders or on behalf of the Holders pursuant to this
Agreement or for the application by the Company of the proceeds of the Warrants.
The Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of the receipt of any written
demand from a Holder with respect to such default, including any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise.
(e) Not Responsible for Adjustments or Validity of Stock. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require an adjustment of
the Warrant Number or the Exercise Price, or with respect to the nature or
extent of any adjustment when made, or with respect to the method employed, or
herein or in any supplemental agreement provided to be employed, in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value of any shares of Common Stock or of any securities or property which may
at any time be issued or delivered upon the exercise of any Warrant or upon any
adjustment pursuant to Article IV, and it makes no representation with respect
thereto. 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 upon the surrender of any Warrant Certificate
for the purpose of exercise or upon any adjustment pursuant to Article IV, or to
comply with any of the covenants of the Company contained in Article IV.
SECTION 6.3 Individual Rights of Warrant Agent. 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 its
affiliates or become pecuniarily interested in transactions in which the Company
or its affiliates may be interested, or contract with or lend money to the
Company or its affiliates or otherwise act as fully and freely as though it were
not
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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 6.4 Warrant Agent's Disclaimer. The Warrant Agent shall
not be responsible for and makes no representation as to the validity or
adequacy of this Agreement or the Warrant Certificates and it shall not be
responsible for any statement in this Agreement or the Warrant Certificates
other than its countersignature thereon.
SECTION 6.5 Compensation and Indemnity. The Company agrees to pay
the Warrant Agent from time to time reasonable compensation for its services and
to reimburse the Warrant Agent upon request for all reasonable out-of-pocket
expenses incurred by it, including the reasonable compensation and expenses of
the Warrant Agent's agents and counsel, in connection with the services rendered
hereunder. The Company shall indemnify the Warrant Agent against any loss,
liability or expense (including reasonable agents' and attorneys' fees and
expenses) incurred by it without negligence or bad faith on its part arising out
of or in connection with the acceptance or performance of its duties under this
Agreement. The Warrant Agent shall notify the Company promptly of any claim for
which it may seek indemnity. The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Warrant Agent through
willful misconduct, negligence or bad faith. The Company's payment obligations
pursuant to this Section 6.5 shall survive the termination of this Agreement.
To secure the Company's payment obligations under this Agreement,
the Warrant Agent shall have a lien prior to the Warrant Holders on all money or
property held or collected by the Warrant Agent.
SECTION 6.6 Successor Warrant Agent.
(a) The Company To Provide Warrant Agent. The Company agrees for
the benefit of the Holders that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) Resignation and Removal. The Warrant Agent may at any time
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 60 days after the date
on which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective, which date shall not be
less than 60 days after such notice is given unless the Warrant Agent otherwise
agrees. Any removal under this Section 6.6 shall take effect upon the
appointment by the Company as hereinafter provided of a successor Warrant Agent
(which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent.
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(c) The Company To Appoint Successor. In case at any time the
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Warrant Agent or its property or affairs, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered in
respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law; or a decree order by a court having
jurisdiction in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar
official) of the Warrant Agent or of its property or affairs, or any public
officer shall take charge or control of the Warrant Agent or of its property or
affairs for the purpose of rehabilitation, conservation, winding up of or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent (or, in the absence of such appointment within 60 days after the
notice of resignation or removal, either party hereto may petition the
appointment of a successor by a court of competent jurisdiction.) Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease to be
Warrant Agent hereunder; provided, however, that in the event of the resignation
of the Warrant Agent under this subsection (c), such resignation shall be
effective on the earlier of (i) the date specified in the Warrant Agent's notice
of resignation and (ii) the appointment and acceptance of a successor Warrant
Agent hereunder. As soon as practicable after appointment of the successor
Warrant Agent, the Company shall cause written notice of the change in the
Warrant Agent to be given to each of the registered holders of the Warrants in
the manner provided for in Section 7.7 hereof. However, failure to give any
notice provided for in this clause (c) or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be.
(d) Successor Expressly To Assume Duties. Any successor Warrant
Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the rights and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Successor by Merger. Any corporation into which the Warrant
Agent hereunder may be merged or consolidated, or any corporation resulting from
any merger or
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consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all of its corporate trust business; provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VII
Miscellaneous
SECTION 7.1 [INTENTIONALLY OMITTED.]
SECTION 7.2 SEC Reports and Other Information. Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall, for all periods ending after
the date of this Warrant Agreement, file with the SEC and thereupon provide the
Warrant Agent and Holders with such annual reports and such information,
documents and other reports are as specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed at the times specified
for the filing of such information, documents and reports under such Sections,
and within 5 Business Days thereafter such information, documents and other
reports shall be provided to the Warrant Agent and the Holders.
SECTION 7.3 Rule 144A. The Company hereby agrees with each Holder,
for so long as any Warrants or Warrant Shares remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to any Holder or
beneficial owner of Warrants or Warrant Shares in connection with any sale
thereof and any prospective purchaser of such Warrants or Warrant Shares from
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Warrants or Warrant
Shares pursuant to Rule 144A.
SECTION 7.4 Persons Benefitting. 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 any right, remedy or claim under or by reason
of this agreement or any part hereof.
SECTION 7.5 Rights of Holders. Except as expressly contemplated
herein, holders of unexercised Warrants are not entitled (i) to receive
dividends or other distributions, (ii) to receive notice of or vote at any
meeting of the stockholders, (iii) to consent to any action of the stockholders,
(iv) to exercise any preemptive right or to receive notice of any other
proceedings of the Company or (v) to exercise any other rights whatsoever as
stockholders of the Company.
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SECTION 7.6 Amendment. This Agreement may be amended by the
parties hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent may
deem necessary or desirable; provided however, that the Company determines, and
the Warrant Agent may rely on such determination, that such action shall not
affect adversely the rights of the Holders. Any amendment or supplement to this
Agreement that has a material adverse effect on the interests of the Holders
shall require the written consent of the Holders of a majority of the then
outstanding Warrants. The consent of each Holder affected shall be required for
any amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (other than pursuant to adjustments provided in Article IV as of the
Issue Date of the Warrants). In determining whether the Holders of the required
number of Warrants have concurred in any direction, waiver or consent, Warrants
owned by the Company or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company shall
be disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Warrant Agent shall be protected in relying on any such
direction, waiver or consent, only Warrants which the Warrant Agent knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination.
SECTION 7.7 Notices. Any notice or communication shall be in
writing and delivered in Person or mailed by first-class mail addressed as
follows:
if to the Company:
TransAmerican Refining Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇
Vice President
with a copy to:
Gardere & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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if to the Warrant Agent:
First Union National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
The Company or the Warrant Agent by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to
the Holder at the Holder's address as it appears on the register in which the
Company shall provide for the registration of Warrants and Warrant Shares and of
transfers and exchanges of Warrants and Warrant Shares and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 7.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY, ON BEHALF OF
ITSELF, HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY
SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY,
ON BEHALF OF ITSELF, IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 7.9 Successors. All agreements of the Company in this
Agreement and the Warrant Certificates shall bind its successors. All agreements
of the Warrant Agent in this Agreement shall bind its successors.
SECTION 7.10 Multiple Originals. The parties may sign any number
of copies of this Agreement. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Agreement.
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SECTION 7.11 Table of Contents. The table of contents and headings
of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 7.12 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
SECTION 7.13 Further Assurances. From time to time on and after
the date hereof, the Company shall deliver or cause to be delivered to the
Warrant Agent such further documents and instruments and shall do and cause to
be done such further acts as the Warrant Agent shall reasonably request (it
being understood that the Warrant Agent shall have no obligation to make such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
TRANSAMERICAN REFINING CORPORATION
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK, as
Warrant Agent,
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER
THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH TRANSAMERICAN REFINING CORPORATION ("THE
COMPANY") ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D),(E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
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EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE WARRANT AGENT.
[Unless and until it is exchanged in whole or in part for Warrants
in definitive form, this Warrant may not be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor depository or a nominee of such successor
depository. The Depository Trust Company ("DTC") (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) shall act as the depository until a successor shall be appointed by the
Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]*
No. [ ] Certificate for Warrants
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* To be included only if the Warrant is in global form.
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WARRANTS TO PURCHASE COMMON STOCK OF
TRANSAMERICAN REFINING CORPORATION
THIS CERTIFIES THAT, [ ], or its registered assigns, is the
registered holder of the number of Warrants set forth above (the "Warrants").
Each Warrant entitles the holder thereof (the "Holder"), at its option and
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from TransAmerican Refining Corporation, a Texas
corporation ("the Company"), initially 13.344257 shares of Common Stock, $0.01
par value, of the Company (the "Common Stock") at the per share exercise price
of $0.01 (the "Exercise Price"). This Warrant Certificate shall terminate and
become void as of the close of business on June 30, 2003 (the "Expiration Date")
or upon the exercise hereof as to all the shares of Common Stock subject hereto.
The number of shares purchasable upon exercise of the Warrants and the Exercise
Price per share shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of December 30, 1997 (the "Warrant Agreement"),
between the Company and First Union National Bank (the "Warrant Agent," which
term includes any successor Warrant Agent under the Warrant Agreement), and is
subject to the terms and provisions contained in the Warrant Agreement, 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 statement of the respective rights, limitations of rights,
duties and obligations of the Company, the Warrant Agent and the Holders of the
Warrants. Capitalized terms used but not defined herein shall have the meanings
ascribed thereto in the Warrant Agreement. A copy of the Warrant Agreement may
be obtained for inspection by the Holder hereof upon written request to the
Warrant Agent at First Union National Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, attention of Corporate Trust Administration.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time or
from time to time on any Business Day only on or after December 30, 1998;
provided, however, that no Warrant shall be exercisable after June 30, 2003.
The Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with the transfer
or exchange of the Warrant Certificates pursuant to Section 5.2 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
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Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants shall not have
been exercised. This Warrant Certificate may be exchanged at the office of the
Warrant Agent by presenting this Warrant Certificate properly endorsed with a
request to exchange this Warrant Certificate for other Warrant Certificates
evidencing an equal number of Warrants. No fractional Warrant Shares will be
issued upon the exercise of the Warrants, but the Company shall pay an amount in
cash equal to the Market Price for one Warrant Share on the trading day immedi-
ately preceding the date the Warrant is exercised, multiplied by the fraction of
a Warrant Share that would be issuable on the exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the
exercise of the Warrants shall, upon such issue, be duly and validly issued and
fully paid and nonassessable.
The Holder in whose name the Warrant Certificate is registered may
be deemed and treated by the Company and the Warrant Agent as the absolute owner
of the Warrant Certificate for all purposes whatsoever and neither the Company
nor the Warrant Agent shall be affected by notice to the contrary.
The Warrants do not entitle any holder hereof to any of the rights
of a stockholder of the Company.
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This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
TRANSAMERICAN REFINING CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Attest:
---------------------------
Secretary
DATED:
Countersigned:
FIRST UNION NATIONAL BANK,
as Warrant Agent,
By:
------------------------
Authorized Signatory
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SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS*
The following exchanges of a part of this Global Warrant for definitive
Warrants have been made:
Number of
Warrants in
Amount of this Global
increase/ Warrant Signature of
decrease in Number following authorized
Date of of Warrants in such increase/ officer of
Exchange this Global Warrant decrease Warrant Agent
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* To be included only if the Warrant is in global form.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of
TransAmerican Refining Corporation (the "Company")
This Certificate relates to Warrants held in definitive form
by _______________ (the "Transferor").
The Transferor has requested the Warrant Agent by
written order to exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and that the transfer of
this Warrant does not require registration under the Securities Act of 1933
(the "Securities Act") because *:
[_] Such Warrant is being acquired for the Transferor's
own account without transfer.
[_] Such Warrant is being transferred to the Company.
[_] Such Warrant is being transferred pursuant to an
effective registration statement pursuant to the Securities Act.
[_] Such Warrant is being transferred in a transaction
meeting the requirements of Rule 144 under the Securities Act.
--------
* Please check applicable box.
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The Warrant Agent and the Company are entitled to rely upon
this Certificate and are irrevocably authorized to produce this Certificate or
a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
-------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------
Date:
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