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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 4, 1999
(Date of earliest event reported)
GAINSCO, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
TEXAS 001-09828 75-1617013
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
500 COMMERCE STREET, FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 336-2500
ITEM 5. OTHER EVENTS.
On October 4, 1999, GAINSCO, INC. (the "Company") issued a press
release announcing the closing of the transactions (the "Transactions")
contemplated by the Securities Purchase Agreement dated as of June 29, 1999
between the Company and Goff Moore Strategic Partners, L.P., a Texas limited
partnership ("GMSP"). The Transactions included (a) the sale to GMSP for an
aggregate purchase price of $31,620,000 of (i) 31,620 shares of GNA's Series A
Convertible Preferred Stock, which are convertible into shares of the Company's
Common Stock, par value $0.10 per share ("Common Stock"), at a conversion price
of $5.10 per share (subject to adjustment as described therein), (ii) a five
year Warrant to purchase an aggregate of 1,550,000 shares of Common Stock at an
exercise price of $6.375 per share (subject to adjustment as
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described therein) expiring October 4, 2004, and (iii) a seven year Warrant to
purchase an aggregate of 1,550,000 shares of Common Stock at an exercise price
of $8.50 per share (subject to adjustment as described therein) expiring October
4, 2006; and (b) the entry by the Company and certain of its subsidiaries into
Investment Management Agreements with GMSP, pursuant to which GMSP will manage
the respective investment portfolios of the Company and its insurance company
subsidiaries. Completion of the Transactions concluded the strategic
alternatives review process that the Company initiated in 1998.
A copy of the press release is filed as an exhibit hereto and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
No financial statements or pro forma financial statements are required
to be filed as a part of this report. The following is a list of exhibits filed
as part of this Current Report on Form 8-K:
EXHIBITS
EXHIBIT NO.
2.1 Securities Purchase Agreement dated as of June 29, 1999 between the
Company and GMSP (including exhibits). (1)
99.17 Press Release by the Company dated October 4, 1999 announcing the
consummation of the Transactions. (2)
99.18 Statement of Resolution Establishing and Designating Series A
Convertible Preferred Stock of the Company as filed with the Secretary
of State of the State of Texas on October 1, 1999. (2)
99.19 Series A Common Stock Purchase Warrant dated October 4, 1999. (2)
99.20 Series B Common Stock Purchase Warrant dated October 4, 1999. (2)
99.21 Amendment No. 4 to Rights Agreement dated June 29, 1999 between the
Company and Continental Stock Transfer & Trust Company. (2)
99.22 First Amendment to Revolving Credit Agreement dated October 4, 1999
among the Company, GAINSCO SERVICE CORP. and Bank One, N.A. (2)
(1) Filed as Exhibit 2.1 to the Company's Current Report on Form 8-K
dated June 29, 1999.
(2) Filed herewith.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
GAINSCO, INC.
BY: /s/ GLENN W. ANDERSON
-------------------------------
Glenn W. Anderson, President and Chief Executive
Officer
DATED: October 4, 1999
3
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GAINSCO, INC.
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Securities Purchase Agreement dated as of June 29, 1999
between the Company and GMSP (including exhibits). (1)
99.17 Press Release by the Company dated October 4, 1999 announcing
the consummation of the Transactions. (2)
99.18 Statement of Resolution Establishing and Designating Series A
Convertible Preferred Stock of the Company as filed with the
Secretary of State of the State of Texas on October 1, 1999.
(2)
99.19 Series A Common Stock Purchase Warrant dated October 4, 1999.
(2)
99.20 Series B Common Stock Purchase Warrant dated October 4, 1999.
(2)
99.21 Amendment No. 4 to Rights Agreement dated June 29, 1999
between the Company and Continental Stock Transfer & Trust
Company. (2)
99.22 First Amendment to Revolving Credit Agreement dated October 4,
1999 among the Company, GAINSCO SERVICE CORP. and Bank One,
N.A. (2)
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(1) Filed as Exhibit 2.1 to the Company's Current Report on Form 8-K
dated June 29, 1999.
(2) Filed herewith.
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EXHIBIT 99.17
PRESS RELEASE
GAINSCO COMPLETES STRATEGIC CAPITAL ALLIANCE
WITH GOFF MOORE STRATEGIC PARTNERS, L.P.
FORT WORTH, Texas, Oct. 4, 1999 -- GAINSCO, INC. (NYSE: GNA) today
announced that it has completed the strategic capital alliance transaction with
Goff Moore Strategic Partners, L.P. that was previously announced on June 29,
1999.
Completion of this transaction concludes the strategic alternatives
review process that GAINSCO initiated in 1998.
GAINSCO, INC. is a property and casualty insurance holding company that
underwrites specialty commercial automobile, auto garage, general liability and
property coverages through a general agency distribution network, as well as
nonstandard private passenger automobile insurance through the Lalande Group.
<PAGE> 1
EXHIBIT 99.18
STATEMENT OF RESOLUTION
ESTABLISHING AND DESIGNATING A SERIES OF SHARES
OF
GAINSCO, INC.
SERIES A CONVERTIBLE PREFERRED STOCK, PAR VALUE $100.00 PER SHARE
Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, and pursuant to Article 4 of its Articles of Incorporation, as
amended, the undersigned, GAINSCO, INC. (the "Company"), hereby submits the
following statement for the purposes of establishing and designating a series of
shares and fixing and determining the relative rights and preferences thereof:
I. The name of the Company is GAINSCO, INC.
II. The following resolution establishing and designating a series of
shares and fixing and determining the relative rights and preferences thereof
was duly adopted by the Board of Directors of the Company on June 29, 1999:
RESOLVED, by the Board of Directors (the "Board") of GAINSCO, INC., a
Texas corporation (the "Company"), that pursuant to authority expressly granted
to and vested in the Board by the provisions of the Articles of Incorporation of
the Company (the "Articles of Incorporation"), the Board hereby creates a first
series or the class of authorized Preferred Stock, par value $100.00 per share
(the "Preferred Stock"), of the Company, and authorizes the issuance thereof,
and hereby fixes the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof, as follows:
SECTION 1. Designation of Series. The shares of such series shall be
designated "Series A Convertible Preferred Stock" (hereinafter called "Series A
Preferred Stock")
SECTION 2. Number of Shares. The number of shares of Series A Preferred
Stock shall be 31,620, which number the Board may decrease (but not below the
number of shares of the series then outstanding).
SECTION 3. Dividends. Should the Company declare, pay or set apart for
payment any dividend or other distribution on or in respect of its common stock
("Common Stock"), including a dividend or other distribution payable in Common
Stock or other securities of the Company, or warrants or rights to purchase
Common Stock or other securities of the Company, the same dividend or
distribution concurrently shall be declared and paid with respect to each share
of
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Series A Preferred Stock outstanding as if such share of Series A Preferred
Stock had been converted into Common Stock pursuant to the terms of Section 6
hereof.
SECTION 4. No Sinking Fund. The Series A Preferred Stock shall not be
entitled to the benefits of any retirement or sinking fund.
SECTION 5. Liquidation. The holders of the Series A Preferred Stock
shall, in case of voluntary or involuntary liquidation dissolution or winding up
of the affairs of the Company, be entitled to receive in full out of the assets
of the Company, including its capital, before any amount shall be paid or
distributed among the holders of Common Stock, the amount of $1,000.00 per
share, plus an amount in cash equal to any dividends or other distributions
declared and not yet paid thereon pursuant to Section 3 (the "Liquidation
Value"). After payment to the holders of the Series A Preferred Stock of the
amount set forth in the preceding sentence, the remaining assets of the Company
shall be distributed to the holders of the Company's stock in accordance with
the Articles of Incorporation and applicable law. If upon any liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Series A Preferred Stock and any other stock ranking as to any such
distribution on a parity with the Series A Preferred Stock are not paid in full,
the holders of the Series A Preferred Stock and of such other stock will share
ratably in any such distribution of assets in proportion to the full respective
preferential amounts to which they are entitled. Neither the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation, merger or other business combination of the
Company with or into one or more corporations or other entities shall be deemed
to be a liquidation, dissolution or winding-up, voluntary or involuntary, of the
Company.
SECTION 6. Conversion Rights. The holders of shares of Series A
Preferred Stock shall have the right, at their option, to convert all or any
part of such shares into Common Stock at any time on and subject to the
following terms and conditions:
(a) Conversion Price. The number of shares of Common Stock issued upon
conversion of each share of the Series A Preferred Stock shall be equal to
$1,000.00 divided by the Conversion Price (as hereinafter defined) then in
effect. The price at which Common Stock shall be delivered upon conversion
(herein called the "Conversion Price") initially shall be $5.10; provided
however, that such Conversion Price shall be subject to adjustments from time to
time as hereinafter provided.
(b) Procedure. Each holder of Series A Preferred Stock may exercise
such conversion privilege by delivering to the Company the certificate for the
shares of Series A Preferred Stock to be converted into Common Stock and written
notice that the holder elects to convert such shares. Conversion shall be deemed
to have been effected immediately prior to the close of business on the date
when such delivery is made. On the conversion date or as promptly thereafter as
practicable, the Company shall deliver to the holder of the Series A Preferred
Stock surrendered for conversion, or as otherwise directed by such holder in
writing, a certificate for the number of shares of Common Stock deliverable upon
the conversion of such Series A
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Preferred Stock. No adjustment shall be made for any dividends on shares of
Series A Preferred Stock surrendered for conversion or for dividends on the
Common Stock delivered on conversion. No fractional shares of Common Stock will
be issued upon conversion; any fractional interest which would result from
conversion shall be rounded up or down to the nearest whole share and there
shall be no cash due by or to the Company in respect of such fractional
interest.
(c) Adjustments to Conversion Price. The Conversion Price in effect at
any time shall be subject to adjustment as follows:
(i) Adjustment for Change in Capital Stock. If the Company:
(A) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(B) combines its outstanding shares of Common Stock into a
smaller number of shares; or
(C) issues by reclassification of its Common Stock any shares
of its capital stock;
then the conversion privilege and the Conversion Price in effect immediately
prior to such action shall be adjusted so that the holder of shares of Series A
Preferred Stock thereafter converted may receive the number of shares of capital
stock of the Company which he would have owned immediately following such action
if the holder had converted the Series A Preferred Stock 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.
If, after an adjustment, a holder of shares of Series A Preferred Stock
upon conversion of such shares may receive shares of two or more classes of
capital stock of the Company, the Company shall determine the allocation of the
adjusted Conversion Price between the classes of capital stock. After such
allocation the conversion privilege and the Conversion Price of each class of
capital stock thereafter shall be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section.
(ii) When Adjustment May Be Deferred. No adjustment in the Conversion
Price need be made unless the adjustment would require an increase or decrease
of at least one percent (1%) in the Conversion Price. Any adjustments that are
not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Section shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
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(iii) When No Adjustment Required. No adjustment need be made for a
change in the par value or no par value of the Common Stock. To the extent the
shares of Series A Preferred Stock become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(iv) Notice of Adjustment. Whenever the Conversion Price is adjusted,
the Company shall promptly mail to all holders of shares of Series A Preferred
Stock a notice and description of the adjustment.
(v) Notice of Certain Transactions. If there is a liquidation or
dissolution of the Company, the Company shall mail to all holders of the Series
A Preferred Stock a notice thereof stating the proposed record date for the
dividend or distribution or the proposed effective date of the subdivision,
combination or reclassification. The Company shall mail the notice at least 15
days before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
(vi) Fundamental Change Transaction. In case at any time after the
issuance of the Series A Preferred Stock, the Company shall be a party to any
transaction (including without limitation, a merger, consolidation, statutory
share exchange, sale of all or substantially all of the Company's assets or
capitalization of the Common Stock), in each case as a result of which shares of
Common Stock (or any other securities of the Company then issuable upon
conversion of the Series A Preferred Stock) shall be converted to the right to
receive stock, securities or other property (including cash or any combination
thereof) (each of the foregoing transactions being referred to as a "Fundamental
Change Transaction"), then the shares of Series A Preferred Stock remaining
outstanding will thereafter no longer be subject to conversion into Common Stock
(or such other securities) pursuant to this Section 6, but instead each share
shall be convertible into the kind and amount of stock and other securities and
property receivable (including cash) upon the consummation of such Fundamental
Change Transaction by a holder of that number of shares or fraction thereof of
Common Stock (or such other securities) into which one share of Series A
Preferred Stock was convertible immediately prior to such Fundamental Change
Transaction assuming such holder of Common Stock failed to exercise any right of
election as to the kind of consideration to be received in such Fundamental
Change Transaction. The Company shall not be a party to any Fundamental Change
Transaction after which shares of the Series A Preferred Stock shall remain
outstanding unless the terms of such Fundamental Change Transaction are
consistent with the provisions of this Section 6(c), and it shall not consent or
agree to the occurrence of any such Fundamental Change Transaction until the
Company has entered into an agreement with the successor or purchasing entity,
as the case may be, for the benefit of the holders of the shares of Series A
Preferred Stock which will contain provisions enabling the holders of shares of
the Series A Preferred Stock which remain outstanding after such Fundamental
Change Transaction to convert such shares into the consideration received by
holders of Common Stock (or any other securities of the Company then issuable
upon conversion of the Series A Preferred Stock) at a Conversion Price
immediately after such Fundamental Change Transaction. In the event that at any
time, as a result of an adjustment made pursuant to this Section 6, the Series A
Preferred Stock shall become subject to conversion into any securities other
than shares of Common Stock, thereafter
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the number of such other securities so issuable upon conversion of the shares of
Series A Preferred Stock shall be subject to adjustment from time to time in a
manner and on terms nearly equivalent as practicable to the provisions with
respect to the shares of Series A Preferred Stock contained in this Section 6.
The provisions of this Section 6(c)(ix) shall similarly apply to successive
Fundamental Change Transactions.
(vii) Par Value. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value (if any) of
the Common Stock deliverable upon conversion of the Series A Preferred Stock,
the Company will take any corporate action which may, in the opinion of its
counsel be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Common Stock at such adjusted Conversion Price.
(d) Reservation of Shares. The Company shall at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock and issued Common Stock held in its
treasury, solely for the purpose of effecting the conversion of the shares of
Series A Preferred Stock, the full number of shares of Common Stock then
issuable upon the conversion of all outstanding shares of Series A Preferred
Stock. For the purpose of this paragraph (d), the full number of shares of
Common Stock issuable upon the conversion of all outstanding shares of Series A
Preferred Stock shall be computed as if at the time of computation of such
number of shares of Common Stock, all outstanding shares of Series A Preferred
Stock were held by a single holder. The Company shall, from time to time, in
accordance with the laws of the State of Texas, increase the authorized number
of shares of its Common Stock if at any time the aggregate of the authorized
number of shares of its Common Stock remaining unissued and its issued Common
Stock held in its treasury (other than any such shares reserved for issuance in
any other connection) shall not be sufficient to permit the conversion of all
shares of Series A Preferred Stock at the time outstanding.
(e) Taxes. The Company will pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the issue or
delivery of Common Stock on conversion of shares of Series A Preferred Stock
pursuant hereto. The Company shall not, however, be required to pay any such tax
which may be payable in respect of any transfer involved in the issue or
transfer and delivery of Common Stock in a name other than that in which the
shares of Series A Preferred Stock so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax or has established to
the satisfaction of the Company that such tax has been paid.
(f) Issuance of Shares. The Company covenants and agrees that all
shares of Common Stock that may be issued upon exercise of the conversion rights
of shares of Series A Preferred Stock will, upon issuance, be fully-paid and
nonassessable.
(g) Listing. The Company will endeavor to make the shares of stock that
may be issued upon exercise of the conversion rights of shares of Series A
Preferred Stock eligible for trading upon any national securities exchange, or
any automated quotation system of a registered
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securities association, upon and through which the Common Stock shall then be
traded prior to such delivery.
(h) Conversion at Company's Option. After June 30, 2005, the Company
shall have the right and option, at any time within five (5) business days after
any date on which the Current Market Price of the Common Stock is equal to or
greater than $7.65, to convert all outstanding shares of Series A Preferred
Stock into Common Stock at the Conversion Price in effect on the date the
Company determines to exercise such right by giving notice of such conversion to
the holders of the Series A Preferred Stock not later than five (5) days
following the date of such determination.
(i) Board Determination. Any determination that the Company or the
Board makes pursuant to this Section 6 is conclusive.
SECTION 7. Voting Rights.
(a) Generally. The holders of the Series A Preferred Stock shall be
entitled to vote on all matters for which holders of the Common Stock may vote
and shall be entitled to one vote per share of Common Stock into which the
Series A Preferred Stock then held is convertible at the record date for the
determination of shareholders entitled to vote on such matter, or if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. For the purposes of this paragraph, the
Series A Preferred Stock and the Common Stock and any other stock having similar
voting rights shall vote as one class. The holders of shares of the Series A
Preferred Stock shall not be entitled to vote as a class on any matters except
as required by law.
(b) Amendments. So long as any shares of the Series A Preferred Stock
are outstanding, the Company shall not, without the affirmative vote of the
holders of shares representing at least two-thirds of the Series A Preferred
Stock outstanding on the record date for such meeting and present in person or
by proxy, adopt any amendment to its Articles of Incorporation if such amendment
would (i) increase the authorized number of shares of Series A Preferred Stock,
or (ii) change any of the rights or preferences of the then outstanding Series A
Preferred Stock.
SECTION 8. Action by Consent. Any action required or permitted to be
taken at any meeting of the holders of the Series A Preferred Stock may be taken
without such a meeting if a consent or consents in writing, setting forth the
actions so taken, is signed by the holders of two-thirds of the outstanding
shares of Series A Preferred Stock.
SECTION 9. Preemptive Rights. The holders of the Series A Preferred
Stock will have no preemptive rights whatsoever except as may be set forth in a
separate written instrument executed by the Company and one or more holders of
the Series A Preferred Stock.
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SECTION 10. Redemption Rights.
(a) Optional Redemption.
(i) The Series A Preferred Stock is not redeemable prior
to June 30, 2005.
(ii) On and after June 30, 2005, the Series A Preferred
Stock is redeemable, in whole at any time or from
time to time in part, at the option of the Company at
a redemption price equal to the Liquidation Value.
(b) Effects. At the close of business on the business day immediately
preceding the date fixed for redemption, the rights of holders of shares of
Series A Preferred Stock to convert such shares into Common Stock of the Company
shall expire. Upon the redemption date, the holders of the shares of Series A
Preferred Stock called for redemption shall cease to be shareholders with
respect to such shares and shall have no interest in or claim against the
Company with respect to such shares except only the right to receive the
applicable Liquidation Value.
(c) Procedure. If less than all of the outstanding shares of Series A
Preferred Stock are to be redeemed, the shares to be so redeemed shall be chosen
pro rata or by lot; provided, however, that the Company may elect to redeem all
of the Series A Preferred Stock of any holder who after the redemption of part
of his Series A Preferred Stock would hold less than 100 shares of Series A
Preferred Stock. The Company may deposit the aggregate Liquidation Value for all
shares of Series A Preferred Stock called for redemption prior to the date fixed
for redemption in a trust with any commercial bank in Fort Worth or Dallas,
Texas having a capital and surplus of more than $100,000,000. If such deposit is
made, then from and after the date so fixed for redemption holders of Series A
Preferred Stock called for redemption shall cease to be shareholders in respect
of the shares so called for redemption, all dividends on the shares of Series A
Preferred Stock so called for redemption shall cease to accrue, such shares
shall no longer be transferrable on the books of the Company, and such holders
shall have no interest in or claim against the Company, and such holders shall
have no interest in or claim against the Company with respect to such shares
except the right to receive payment of the Liquidation Value upon surrender of
their certificates. The Board may cause the stock transfer books of the Company
to be closed as to the shares so called for redemption. If the holder of shares
of Series A Preferred Stock which have been called for redemption shall not,
within two years after the redemption date, claim the redemption funds, then
such funds will be paid over to the Company.
(d) Notice. Notice of the redemption of any shares of Series A
Preferred Stock shall be mailed by first-class mail to each holder of record of
shares of Series A Preferred Stock to be redeemed at the address of each such
holder shown on the Company's stock transfer books, not less than 60 days prior
to the date fixed for redemption (but no failure to mail such notice or any
defect therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to any holder to whom the Company has
failed to mail such notice and who has no knowledge of such redemption or except
as to the holder whose notice was defective and who had no knowledge of such
redemption). If less than all the shares owned by a holder are to
<PAGE> 8
be redeemed, the notice shall specify the number of shares and the certificate
numbers thereof which are to be redeemed. Upon mailing any such notice of
redemption, the Company shall become obligated to redeem at the time of
redemption specified therein all shares called for redemption. In case less than
all the shares represented by any certificate are redeemed pursuant to this
Section, a new certificate to the Company or any person designated by the Board
to serve as its agent for such purpose, be issued to the holder thereof
representing the unredeemed shares without cost to such holder.
(e) Restoration. Upon redemption of shares of Series A Preferred Stock,
the shares so redeemed shall have the status of authorized but unissued shares
of Preferred Stock but shall not be reissued as shares of Series A Preferred
Stock.
IN WITNESS WHEREOF, this Statement of Resolution is executed on behalf
of the Company by its President and attested by its Secretary this 1st day of
October, 1999.
GAINSCO, INC.
By: /s/ Glenn W. Anderson
----------------------------------
Glenn W. Anderson,
President and Chief Executive
Officer
<PAGE> 1
EXHIBIT 99.19
SERIES A WARRANT
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE
DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS
AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
THE RIGHT TO SELL OR OTHERWISE TRANSFER THIS WARRANT IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN A SECURITIES PURCHASE AGREEMENT DATED JUNE 29, 1999,
BETWEEN THE COMPANY AND THE INITIAL BUYER OF THE WARRANT, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. THIS WARRANT MAY
NOT BE SOLD OR TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THE
SECURITIES PURCHASE AGREEMENT AND IN THIS WARRANT, AND NO SALE OR TRANSFER OF
THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL
HAVE BEEN COMPLIED WITH.
-----------------------------------------------
GAINSCO, INC.
(Incorporated under the laws of the State of Texas)
Void after 5:00 p.m., Fort Worth, Texas time,
on October 4, 2004
No. A-1 Right to Purchase
1,550,000 Shares
SERIES A COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Goff Moore Strategic Partners,
L.P., a Texas limited partnership (the "Holder"), or registered assigns, is
entitled to purchase from GAINSCO, INC., a Texas corporation (the "Company"), at
any time or from time to time during the period specified in Paragraph 2 hereof,
one million five hundred fifty thousand (1,550,000) fully paid and nonassessable
shares of the Company's Common Stock, par value $0.10 per share (the "Common
Stock"), at an exercise price per share of $6.375 (the "Exercise Price"). The
term "Warrant Shares", as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof.
SERIES A WARRANT - PAGE 1
<PAGE> 2
This Warrant is one of two Warrants (the "Warrants") issued pursuant
to, and is subject to all terms, provisions, and conditions contained in, that
certain Securities Purchase Agreement dated June 29, 1999 (the "Purchase
Agreement"), by and between the Company and the Holder. This Warrant is subject
to the following additional terms, provisions, and conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR
SHARES. Subject to the provisions hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this Warrant, together
with a completed Exercise Agreement in the form attached hereto, to the Company
during normal business hours on any business day at the Company's principal
office in Fort Worth, Texas (or such other office or agency of the Company as it
may designate by notice to the holder hereof), during the Exercise Period (as
defined in Paragraph 2), and upon payment to the Company of the Exercise Price
for the Warrant Shares specified in said Exercise Agreement, which such payment
shall be made (i) in cash or by certified or official bank check, or (ii) by
surrender of shares of Common Stock owned by the holder hereof (the "Payment
Shares"), the aggregate Current Market Price of which shall be credited against
the Exercise Price; provided, however, that in lieu of actually tendering the
Payment Shares, the holder hereof may make a constructive exchange by
relinquishing a number of Warrant Shares ("Constructive Exchange") represented
by the then exercisable portion of this Warrant. The holder hereof shall notify
the Company in writing of any election to pay all or a portion of the Exercise
Price using a Constructive Exchange. Such notice shall specify the number of
Payment Shares to be used in the Constructive Exchange. Upon receipt of such
notice and the required information referred to herein, the Company shall
confirm ownership of the Payment Shares by reference to Company records. Upon
such confirmation, the Company shall treat the Payment Shares as being
constructively exchanged, and accordingly, the Company shall issue to the holder
hereof a net number of shares of Common Stock equal to (i) the number of shares
subject to the exercise for which the Constructive Exchange is being exercised,
less (ii) the number of Payment Shares. The holder hereof may elect to exercise
using a Constructive Exchange any number of times in succession, subject to
compliance with the procedures set forth herein. The Company shall not be
required to issue fractional Warrant Shares upon any exercise of the Warrant,
but instead shall pay to the holder of this Warrant the cash value of any such
fractional Warrant Shares. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or its designee as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement delivered, and payment made for
such shares as aforesaid. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in said Exercise
Agreement, shall be delivered to the holder hereof within a reasonable time, not
exceeding ten business days, after this Warrant shall have been so exercised.
The certificates so delivered shall be in such denominations as may be
reasonably requested by the holder hereof, shall, unless the Warrant Shares
evidenced by such certificate have previously been registered under the
Securities Act of 1933, as amended (the "Securities Act") be imprinted with a
restrictive legend substantially similar to the legend appearing on the face of
this Warrant, and shall be registered in the name of said holder or such other
name as shall be designated by said holder. If this Warrant shall have been
exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of said certificates, deliver to
said holder a new Warrant representing the number of shares with respect to
which this Warrant shall not then have been exercised, which Warrant shall be
imprinted on its face with the same legend appearing on the face of this
Warrant. The Company shall pay all taxes and other expenses and charges payable
in connection with the preparation, execution, and delivery of stock
certificates (and any new Warrants) pursuant to this Paragraph 1 except that, in
case such stock certificates shall be registered in a name or names other than
the holder of this Warrant, funds sufficient to pay all stock transfer taxes
which shall be payable in connection with the execution and delivery of such
stock certificates shall
SERIES A WARRANT - PAGE 2
<PAGE> 3
be paid by the holder hereof to the Company at the time of the delivery of such
stock certificates by the Company as mentioned above.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or
from time to time during the period commencing on October 4, 1999 and ending at
5:00 p.m. Fort Worth, Texas time, on October 4, 2004 (the "Exercise Period").
3. CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant.
Without limiting the generality of the foregoing,
(i) the Company will not increase the par value of the shares
of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect;
(ii) before taking any action which would cause an adjustment
reducing the Exercise Price below the then par value of the shares of
Common Stock so receivable, the Company will take all such corporate
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common
Stock at such adjusted Exercise Price upon the exercise of this
Warrant; and
(iii) the Company will not take any action which results in
any adjustment of the Exercise Price if the total number of shares of
Common Stock issuable after the action upon the exercise of this
Warrant would exceed the total number of shares of Common Stock then
authorized by the Company's charter and available for issuance upon
such exercise.
4. ADJUSTMENTS TO EXERCISE PRICE. The Exercise Price in effect at
any time shall be subject to adjustment as follows:
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(i) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares;
(iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(v) issues by reclassification of its Common Stock any shares
of its capital stock;
SERIES A WARRANT - PAGE 3
<PAGE> 4
then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the holder of this Warrant may receive the number of shares of
capital stock of the Company upon the exercise hereof which the holder would
have owned immediately following such action if the holder had executed the
Warrant 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.
If, after an adjustment, the holder of this Warrant upon exercise
hereof may receive shares of two or more classes of capital stock of the
Company, the Company shall determine the allocation of the adjusted Exercise
Price between the classes of capital stock. After such allocation the Exercise
Price of each class of capital stock thereafter shall be subject to adjustment
on terms comparable to those applicable to Common Stock in this Paragraph.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any
rights or warrants to all holders of its Common Stock entitling them for a
period expiring within 90 days after the record date for the determination of
shareholders entitled to receive the rights or warrants to purchase shares of
Common Stock at a price per share less than the Current Market Price per share
on that record date, the Exercise Price shall be adjusted in accordance with the
following formula:
N x P
---------
C x O + M
--------------
C' = O + N
where:
C' = the adjusted Exercise Price.
C = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the Current Market Price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such rights or
warrants are issued and shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights or
warrants. If at the end of the period during which such warrants or rights are
exercisable not all warrants or rights shall have been exercised, the Exercise
Price shall be immediately readjusted to what it would have been if "N" in the
above formula had been the number of shares actually issued.
This subsection does not apply to any rights or other securities issued
under or in respect of any rights plan or poison pill adopted by the Company.
SERIES A WARRANT - PAGE 4
<PAGE> 5
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. In case the Company at any
time after the date hereof during the course of a calendar year shall declare,
order, pay or make any dividend(s) or other distribution(s) payable in cash to
all holders of the Common Stock exceeding (in the aggregate) $.14 per share of
outstanding Common Stock (proportionately adjusted to reflect any stock
dividends, splits or combinations), the Exercise Price shall be adjusted in
accordance with the formula:
C' = C - D
where:
C' = the adjusted Exercise Price.
C = the current Exercise Price.
D = the amount by which the cash dividend(s) or distribution(s)
for the given calendar year exceeds (in the aggregate) $.14
per share of outstanding Common Stock (proportionately
adjusted to reflect any stock dividends, splits or
combinations)
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 shareholders entitled to receive the distribution.
(d) CURRENT MARKET PRICE. In Paragraphs 4(b) and 4(c), the
"Current Market Price" per share of Common Stock on any date is the average of
Quoted Prices of the Common Stock during the two trading weeks before the date
in question. In the absence of one or more such quotations the Company shall
determine the current market price on the basis of such quotations as it
considers appropriate. As used herein, the "Quoted Price" of the Common Stock is
the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the closing bid and asked prices regular
way for such day, in each case on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if not
listed or admitted to trading, the last sale price regular way for the Common
Stock as published by NASDAQ or if such last price is not so published by NASDAQ
or if no such sale takes place on such day, the mean between the closing bid and
asked prices for the Common Stock as published by NASDAQ or in the absence of
any of the foregoing, the fair market value as determined by the Board of
Directors.
(e) WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the Exercise
Price need be made unless the adjustment would require an increase or decrease
of at least one percent (1%) in the Exercise Price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Paragraph shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
(f) WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends. No adjustment need be made for a change in the par value or no par
value of the Common Stock. To the extent the Warrant becomes exercisable for
cash, no adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
SERIES A WARRANT - PAGE 5
<PAGE> 6
(g) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is adjusted,
the Company shall promptly mail to the holder of this Warrant a notice and
description of the adjustment.
(h) NOTICE OF CERTAIN TRANSACTIONS. If there is a liquidation or
dissolution of the Company, or in the event of any Fundamental Change
Transaction (as defined in paragraph 4(i) below), or in the event of the
declaration of any dividend or distribution, the Company shall mail to the
holder of this Warrant a notice thereof stating the proposed effective date of
such event. The Company shall mail the notice at least 15 days before such date.
Failure to mail the notice or any defect in it shall not affect the validity of
the transaction.
(i) FUNDAMENTAL CHANGE TRANSACTION. In case at any time after the
date hereof a purchase, tender, or exchange offer shall have been made to and
accepted by the holders of more than 50% of the outstanding shares of Common
Stock, or the Company is otherwise a party to any transaction (including,
without limitation, a merger, consolidation, sale of all or substantially all of
the Company's assets, liquidation, or recapitalization of the Common Stock)
which is to be effected in such a way that as a result of such transaction or
offer (x) the holders of Common Stock (or any other securities of the Company
then issuable upon the exercise of this Warrant) shall be entitled to receive
stock or other securities or property (including cash) with respect to or in
exchange for Common Stock (or such other securities), or (y) the Common Stock
ceases to be a publicly traded security either listed on the New York Stock
Exchange, the NASDAQ National Market System or the American Stock Exchange or
any successor thereto or comparable system (each such transaction being herein
called a "Fundamental Change Transaction"), then, as a condition of such
Fundamental Change Transaction, lawful and adequate provision shall be made
whereby the holder of this Warrant shall thereafter have the right to purchase
and receive upon the basis and upon the terms and conditions specified in this
Warrant, and in lieu of the shares of Common Stock (or such other securities)
purchasable immediately before such transaction upon the exercise hereof, such
stock or other securities or property (including cash) as may be issuable or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock (or such other securities) purchasable immediately before such
transaction upon the exercise hereof, had such Fundamental Change Transaction
not taken place. In any such case appropriate provision shall be made with
respect to the rights and interests of the holder of this Warrant to the end
that the provisions hereof (including, without limitation, the provisions for
adjustments of the Exercise Price and of the number of Warrant Shares
purchasable upon exercise hereof) shall thereafter be applicable, as nearly as
reasonably may be, in relation to the stock or other securities or property
thereafter deliverable upon the exercise hereof (including an immediate
adjustment of the Exercise Price if by reason of or in connection with such
Fundamental Change Transaction any securities are issued or event occurs which
would, under the terms hereof, require an adjustment of the Exercise Price). In
the event of a consolidation or merger of the Company with or into another
corporation or entity as a result of which a greater or lesser number of shares
of common stock of the surviving corporation or entity are issuable to holders
of Common Stock in respect of the number of shares of Common Stock outstanding
immediately prior to such consolidation or merger, then the Exercise Price in
effect immediately prior to such consolidation or merger shall be adjusted in
the same manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company shall not effect any such
Fundamental Change Transaction unless prior to or simultaneously with the
consummation thereof the successor corporation or entity (if other than the
Company) resulting from such consolidation or merger or the corporation or
entity purchasing such assets and any other corporation or entity the shares of
stock or other securities or property of which are receivable thereupon by the
holder of this Warrant shall expressly assume, by written instrument executed
and delivered (and satisfactory in form) to the holder of this Warrant, (i) the
obligation to deliver to such holder such stock or other securities or property
as, in accordance with
SERIES A WARRANT - PAGE 6
<PAGE> 7
the foregoing provisions, such holder may be entitled to purchase and (ii) all
other obligations of the Company hereunder.
(j) PAR VALUE. Before taking any action which would cause an
adjustment reducing the Exercise Price below the then par value (if any) of the
Common Stock deliverable upon exercise of this Warrant, the Company will take
any corporate action which may, in the opinion of its counsel be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Stock at such adjusted Exercise Price.
(k) CERTAIN EVENTS. If any event occurs as to which, in the good
faith judgment of the Board, the other provisions of this Paragraph 4 are not
strictly applicable or if strictly applicable would not fairly protect the
exercise rights of the holder of this Warrant in accordance with the essential
intent and principles of such provisions, then the Board shall make such
adjustment, if any, on a basis consistent with such essential intent and
principles, necessary to preserve, without dilution, the rights of the holder of
this Warrant; provided, that no such adjustment shall have the effect of
increasing the Exercise Price as otherwise determined pursuant to this Paragraph
4.
5. ISSUE TAX. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the holder of
this Warrant or such shares for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any warrant or
certificate in a name other than the holder of this Warrant.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT; REGISTRATION
RIGHTS.
(a) WARRANT TRANSFERABLE. This Warrant may not be transferred or
assigned except in accordance with the provisions of the Purchase Agreement. The
transfer of this Warrant and all rights hereunder, in whole or in part, is
registrable at the office or agency of the Company referred to in Paragraph 7(e)
hereof by the holder hereof in person or by his duly authorized attorney, upon
surrender of this Warrant properly endorsed. Upon any transfer of this Warrant
to any person, other than a person who is at that time a holder of other
Warrants, the Company shall have the right to require the holder and the
transferee to make customary representations to the extent reasonably necessary
to assure that the transfer will comply with the Securities Act and any
applicable state securities laws. Each holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed, may be treated by the Company and all other persons
dealing with this Warrant as the absolute owner and holder hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant and to the registration of transfer hereof on the books of the Company;
but until due presentment for registration of transfer on such books the Company
may treat the registered holder hereof as the owner and holder hereof for all
purposes, and the Company shall not be affected by any notice to the contrary.
SERIES A WARRANT - PAGE 7
<PAGE> 8
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) hereof, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to be imprinted with the same legend appearing on the face of this
Warrant and to represent the right to purchase such number of shares as shall be
designated by said holder hereof at the time of such surrender. For purposes
hereof, the term "Warrant" shall be deemed to include any and all such
replacement Warrants, whether issued pursuant to this subparagraph (b) or any
other Paragraph hereof.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Paragraph 7, this Warrant shall be promptly cancelled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution, and
delivery of Warrants pursuant to this Paragraph 7.
(e) REGISTER. The Company shall maintain, at its principal office
in Fort Worth, Texas (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
(f) REGISTRATION RIGHTS. The issuance of any Warrant Shares
required to be reserved for purposes of exercise of this Warrant and the public
distribution of such Warrant Shares are entitled to the benefits of the
registration rights set forth in the Purchase Agreement.
8. NOTICES. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the holder of this
Warrant shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail, postage prepaid and addressed, to such holder
at the address shown for such holder on the books of the Company, or at such
other address as shall have been furnished to the Company by notice from such
holder. All notices, requests, and other communications required or permitted to
be given or delivered hereunder to the Company shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail, postage
prepaid and addressed, to the office of the Company at 500 Commerce Street, Fort
Worth, Texas, 76102-5439, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by telegram or telex, but shall in such case be subsequently confirmed by a
writing personally delivered or sent by certified or registered mail as provided
above. All notices, requests, and other communications shall be deemed to have
been given either at the time of the delivery thereof to (or the receipt by, in
the case of a telegram or telex) the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 8, or, if mailed, at
the completion of the third full day following the time of such mailing thereof
to such address, as the case may be.
SERIES A WARRANT - PAGE 8
<PAGE> 9
9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF TEXAS, WITHOUT REGARD TO ANY CHOICE
OF LAW PRINCIPLES OF SUCH STATE.
10. REMEDIES. The Company stipulates that the remedies at law of
the holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific enforcement of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may not be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall, to the extent
provided in Section 4(e), be binding upon any entity succeeding to the Company
by merger, consolidation, or acquisition of all or substantially all the
Company's assets.
SERIES A WARRANT - PAGE 9
<PAGE> 10
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on this 4th day of October, 1999.
GAINSCO, INC.
By: /s/ Glenn W. Anderson
-------------------------------------
Glenn W. Anderson,
President and Chief Executive Officer
SERIES A WARRANT - PAGE 10
<PAGE> 11
FORM OF EXERCISE AGREEMENT
Dated: _____________, _______
To:
Attention:
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase ______ shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant (in cash or by certified or official bank check in the
amount of $____________) held by the undersigned and any applicable taxes
payable by undersigned. Please issue a certificate or certificates for such
shares of Common Stock in the name of and pay any cash for any fractional share
to:
Name:
Signature:
Title of Signing Officer or Agent (if any):
Note: The above signature should correspond exactly with the name on
the face of the attached Warrant or with the name of the
assignee appearing in the assignment form.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.
SERIES A WARRANT - PAGE 11
<PAGE> 12
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights represented by and under the attached Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
<TABLE>
<CAPTION>
Name of Assignee Address No. of Shares
---------------- ------- -------------
<S> <C> <C>
</TABLE>
, and hereby irrevocably constitutes and appoints _______________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: _______________, _______
Name:
Signature:
Title of Signing Officer or Agent
(if any):
Address:
Note: The above signature should correspond
exactly with the name on the face of the
within Warrant.
SERIES A WARRANT - PAGE 12
<PAGE> 1
EXHIBIT 99.20
SERIES B WARRANT
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE
DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS
AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH
AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
THE RIGHT TO SELL OR OTHERWISE TRANSFER THIS WARRANT IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN A SECURITIES PURCHASE AGREEMENT DATED JUNE 29, 1999,
BETWEEN THE COMPANY AND THE INITIAL BUYER OF THE WARRANT, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. THIS WARRANT MAY
NOT BE SOLD OR TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THE
SECURITIES PURCHASE AGREEMENT AND IN THIS WARRANT, AND NO SALE OR TRANSFER OF
THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL
HAVE BEEN COMPLIED WITH.
-----------------------------------------------
GAINSCO, INC.
(Incorporated under the laws of the State of Texas)
Void after 5:00 p.m., Fort Worth, Texas time,
on October 4, 2006
No. B-1 Right to Purchase
1,550,000 Shares
SERIES B COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Goff Moore Strategic
Partners, L.P., a Texas limited partnership (the "Holder"), or registered
assigns, is entitled to purchase from GAINSCO, INC., a Texas corporation (the
"Company"), at any time or from time to time during the period specified in
Paragraph 2 hereof, one million five hundred fifty thousand (1,550,000) fully
paid and nonassessable shares of the Company's Common Stock, par value $0.10
per share (the "Common Stock"), at an exercise price per share of $8.50 (the
"Exercise Price"). The term "Warrant Shares", as used herein, refers to the
shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof.
This Warrant is one of two Warrants (the "Warrants") issued pursuant
to, and is subject to all terms, provisions, and conditions contained in, that
certain Securities Purchase Agreement dated June 29, 1999 (the
SERIES B WARRANT - PAGE 1
<PAGE> 2
"Purchase Agreement"), by and between the Company and the Holder. This Warrant
is subject to the following additional terms, provisions, and conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed Exercise Agreement in the form attached hereto, to the Company during
normal business hours on any business day at the Company's principal office in
Fort Worth, Texas (or such other office or agency of the Company as it may
designate by notice to the holder hereof), during the Exercise Period (as
defined in Paragraph 2), and upon payment to the Company of the Exercise Price
for the Warrant Shares specified in said Exercise Agreement, which such payment
shall be made (i) in cash or by certified or official bank check, or (ii) by
surrender of shares of Common Stock owned by the holder hereof (the "Payment
Shares"), the aggregate Current Market Price of which shall be credited against
the Exercise Price; provided, however, that in lieu of actually tendering the
Payment Shares, the holder hereof may make a constructive exchange by
relinquishing a number of Warrant Shares ("Constructive Exchange") represented
by the then exercisable portion of this Warrant. The holder hereof shall notify
the Company in writing of any election to pay all or a portion of the Exercise
Price using a Constructive Exchange. Such notice shall specify the number of
Payment Shares to be used in the Constructive Exchange. Upon receipt of such
notice and the required information referred to herein, the Company shall
confirm ownership of the Payment Shares by reference to Company records. Upon
such confirmation, the Company shall treat the Payment Shares as being
constructively exchanged, and accordingly, the Company shall issue to the
holder hereof a net number of shares of Common Stock equal to (i) the number of
shares subject to the exercise for which the Constructive Exchange is being
exercised, less (ii) the number of Payment Shares. The holder hereof may elect
to exercise using a Constructive Exchange any number of times in succession,
subject to compliance with the procedures set forth herein. The Company shall
not be required to issue fractional Warrant Shares upon any exercise of the
Warrant, but instead shall pay to the holder of this Warrant the cash value of
any such fractional Warrant Shares. The Warrant Shares so purchased shall be
deemed to be issued to the holder hereof or its designee as the record owner of
such shares as of the close of business on the date on which this Warrant shall
have been surrendered, the completed Exercise Agreement delivered, and payment
made for such shares as aforesaid. Certificates for the Warrant Shares so
purchased, representing the aggregate number of shares specified in said
Exercise Agreement, shall be delivered to the holder hereof within a reasonable
time, not exceeding ten business days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may
be reasonably requested by the holder hereof, shall, unless the Warrant Shares
evidenced by such certificate have previously been registered under the
Securities Act of 1933, as amended (the "Securities Act") be imprinted with a
restrictive legend substantially similar to the legend appearing on the face of
this Warrant, and shall be registered in the name of said holder or such other
name as shall be designated by said holder. If this Warrant shall have been
exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of said certificates, deliver to
said holder a new Warrant representing the number of shares with respect to
which this Warrant shall not then have been exercised, which Warrant shall be
imprinted on its face with the same legend appearing on the face of this
Warrant. The Company shall pay all taxes and other expenses and charges payable
in connection with the preparation, execution, and delivery of stock
certificates (and any new Warrants) pursuant to this Paragraph 1 except that,
in case such stock certificates shall be registered in a name or names other
than the holder of this Warrant, funds sufficient to pay all stock transfer
taxes which shall be payable in connection with the execution and delivery of
such stock certificates shall be paid by the holder hereof to the Company at
the time of the delivery of such stock certificates by the Company as mentioned
above.
SERIES B WARRANT - PAGE 2
<PAGE> 3
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from
time to time during the period commencing on October 4, 1999 and ending at 5:00
p.m. Fort Worth, Texas time, on October 4, 2006 (the "Exercise Period").
3. CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment of
articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the exercise privilege of the holder
of this Warrant against dilution or other impairment, consistent with the tenor
and purpose of this Warrant.
Without limiting the generality of the foregoing,
(i) the Company will not increase the par value of the shares
of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect;
(ii) before taking any action which would cause an adjustment
reducing the Exercise Price below the then par value of the shares of
Common Stock so receivable, the Company will take all such corporate
action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Exercise Price upon the exercise of this
Warrant; and
(iii) the Company will not take any action which results in
any adjustment of the Exercise Price if the total number of shares of
Common Stock issuable after the action upon the exercise of this
Warrant would exceed the total number of shares of Common Stock then
authorized by the Company's charter and available for issuance upon
such exercise.
4. ADJUSTMENTS TO EXERCISE PRICE. The Exercise Price in effect at any
time shall be subject to adjustment as follows:
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(i) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares;
(iv) makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock; or
(v) issues by reclassification of its Common Stock any shares
of its capital stock;
then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the holder of this Warrant may receive the number of shares of
capital stock of the Company upon the exercise hereof which
SERIES B WARRANT - PAGE 3
<PAGE> 4
the holder would have owned immediately following such action if the holder had
executed the Warrant 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.
If, after an adjustment, the holder of this Warrant upon exercise
hereof may receive shares of two or more classes of capital stock of the
Company, the Company shall determine the allocation of the adjusted Exercise
Price between the classes of capital stock. After such allocation the Exercise
Price of each class of capital stock thereafter shall be subject to adjustment
on terms comparable to those applicable to Common Stock in this Paragraph.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any rights
or warrants to all holders of its Common Stock entitling them for a period
expiring within 90 days after the record date for the determination of
shareholders entitled to receive the rights or warrants to purchase shares of
Common Stock at a price per share less than the Current Market Price per share
on that record date, the Exercise Price shall be adjusted in accordance with
the following formula:
N x P
---------
C x O + M
-------------
C' = O + N
where:
C' = the adjusted Exercise Price.
C = the current Exercise Price.
O = the number of shares of Common Stock
outstanding on the record date.
N = the number of additional shares of Common
Stock offered.
P = the offering price per share of the additional
shares.
M = the Current Market Price per share of Common Stock
on the record date.
The adjustment shall be made successively whenever any such rights or
warrants are issued and shall become effective immediately after the record
date for the determination of shareholders entitled to receive the rights or
warrants. If at the end of the period during which such warrants or rights are
exercisable not all warrants or rights shall have been exercised, the Exercise
Price shall be immediately readjusted to what it would have been if "N" in the
above formula had been the number of shares actually issued.
This subsection does not apply to any rights or other securities
issued under or in respect of any rights plan or poison pill adopted by the
Company.
SERIES B WARRANT - PAGE 4
<PAGE> 5
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. In case the Company at any
time after the date hereof during the course of a calendar year shall declare,
order, pay or make any dividend(s) or other distribution(s) payable in cash to
all holders of the Common Stock exceeding (in the aggregate) $.14 per share of
outstanding Common Stock (proportionately adjusted to reflect any stock
dividends, splits or combinations), the Exercise Price shall be adjusted in
accordance with the formula:
C' = C - D
where:
C' = the adjusted Exercise Price.
C = the current Exercise Price.
D = the amount by which the cash dividend(s) or
distribution(s) for the given calendar year exceeds
(in the aggregate) $.14 per share of outstanding
Common Stock (proportionately adjusted to reflect any
stock dividends, splits or combinations)
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 shareholders entitled to receive the
distribution.
(d) CURRENT MARKET PRICE. In Paragraphs 4(b) and 4(c), the "Current
Market Price" per share of Common Stock on any date is the average of Quoted
Prices of the Common Stock during the two trading weeks before the date in
question. In the absence of one or more such quotations the Company shall
determine the current market price on the basis of such quotations as it
considers appropriate. As used herein, the "Quoted Price" of the Common Stock
is the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the closing bid and asked prices
regular way for such day, in each case on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if not listed or admitted to trading, the last sale price regular way for
the Common Stock as published by NASDAQ or if such last price is not so
published by NASDAQ or if no such sale takes place on such day, the mean
between the closing bid and asked prices for the Common Stock as published by
NASDAQ or in the absence of any of the foregoing, the fair market value as
determined by the Board of Directors.
(e) WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the Exercise
Price need be made unless the adjustment would require an increase or decrease
of at least one percent (1%) in the Exercise Price. Any adjustments that are
not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Paragraph shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(f) WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for rights
to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends. No adjustment need be made for a change in the par value or no par
value of the Common Stock. To the extent the Warrant becomes exercisable for
cash, no adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
SERIES B WARRANT - PAGE 5
<PAGE> 6
(g) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is adjusted, the
Company shall promptly mail to the holder of this Warrant a notice and
description of the adjustment.
(h) NOTICE OF CERTAIN TRANSACTIONS. If there is a liquidation or
dissolution of the Company, or in the event of any Fundamental Change
Transaction (as defined in paragraph 4(i) below), or in the event of the
declaration of any dividend or distribution, the Company shall mail to the
holder of this Warrant a notice thereof stating the proposed effective date of
such event. The Company shall mail the notice at least 15 days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.
(i) FUNDAMENTAL CHANGE TRANSACTION. In case at any time after the date
hereof a purchase, tender, or exchange offer shall have been made to and
accepted by the holders of more than 50% of the outstanding shares of Common
Stock, or the Company is otherwise a party to any transaction (including,
without limitation, a merger, consolidation, sale of all or substantially all
of the Company's assets, liquidation, or recapitalization of the Common Stock)
which is to be effected in such a way that as a result of such transaction or
offer (x) the holders of Common Stock (or any other securities of the Company
then issuable upon the exercise of this Warrant) shall be entitled to receive
stock or other securities or property (including cash) with respect to or in
exchange for Common Stock (or such other securities), or (y) the Common Stock
ceases to be a publicly traded security either listed on the New York Stock
Exchange, the NASDAQ National Market System or the American Stock Exchange or
any successor thereto or comparable system (each such transaction being herein
called a "Fundamental Change Transaction"), then, as a condition of such
Fundamental Change Transaction, lawful and adequate provision shall be made
whereby the holder of this Warrant shall thereafter have the right to purchase
and receive upon the basis and upon the terms and conditions specified in this
Warrant, and in lieu of the shares of Common Stock (or such other securities)
purchasable immediately before such transaction upon the exercise hereof, such
stock or other securities or property (including cash) as may be issuable or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock (or such other securities) purchasable immediately before such
transaction upon the exercise hereof, had such Fundamental Change Transaction
not taken place. In any such case appropriate provision shall be made with
respect to the rights and interests of the holder of this Warrant to the end
that the provisions hereof (including, without limitation, the provisions for
adjustments of the Exercise Price and of the number of Warrant Shares
purchasable upon exercise hereof) shall thereafter be applicable, as nearly as
reasonably may be, in relation to the stock or other securities or property
thereafter deliverable upon the exercise hereof (including an immediate
adjustment of the Exercise Price if by reason of or in connection with such
Fundamental Change Transaction any securities are issued or event occurs which
would, under the terms hereof, require an adjustment of the Exercise Price). In
the event of a consolidation or merger of the Company with or into another
corporation or entity as a result of which a greater or lesser number of shares
of common stock of the surviving corporation or entity are issuable to holders
of Common Stock in respect of the number of shares of Common Stock outstanding
immediately prior to such consolidation or merger, then the Exercise Price in
effect immediately prior to such consolidation or merger shall be adjusted in
the same manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company shall not effect any such
Fundamental Change Transaction unless prior to or simultaneously with the
consummation thereof the successor corporation or entity (if other than the
Company) resulting from such consolidation or merger or the corporation or
entity purchasing such assets and any other corporation or entity the shares of
stock or other securities or property of which are receivable thereupon by the
holder of this Warrant shall expressly assume, by written instrument executed
and delivered (and satisfactory in form) to the holder of this Warrant, (i) the
obligation to deliver
SERIES B WARRANT - PAGE 6
<PAGE> 7
to such holder such stock or other securities or property as, in accordance
with the foregoing provisions, such holder may be entitled to purchase and (ii)
all other obligations of the Company hereunder.
(j) PAR VALUE. Before taking any action which would cause an
adjustment reducing the Exercise Price below the then par value (if any) of the
Common Stock deliverable upon exercise of this Warrant, the Company will take
any corporate action which may, in the opinion of its counsel be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Stock at such adjusted Exercise Price.
(k) CERTAIN EVENTS. If any event occurs as to which, in the good faith
judgment of the Board, the other provisions of this Paragraph 4 are not
strictly applicable or if strictly applicable would not fairly protect the
exercise rights of the holder of this Warrant in accordance with the essential
intent and principles of such provisions, then the Board shall make such
adjustment, if any, on a basis consistent with such essential intent and
principles, necessary to preserve, without dilution, the rights of the holder
of this Warrant; provided, that no such adjustment shall have the effect of
increasing the Exercise Price as otherwise determined pursuant to this
Paragraph 4.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax in respect thereof, provided that
the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any warrant or
certificate in a name other than the holder of this Warrant.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
SERIES B WARRANT - PAGE 7
<PAGE> 8
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT; REGISTRATION
RIGHTS.
(a) WARRANT TRANSFERABLE. This Warrant may not be transferred or
assigned except in accordance with the provisions of the Purchase Agreement.
The transfer of this Warrant and all rights hereunder, in whole or in part, is
registrable at the office or agency of the Company referred to in Paragraph
7(e) hereof by the holder hereof in person or by his duly authorized attorney,
upon surrender of this Warrant properly endorsed. Upon any transfer of this
Warrant to any person, other than a person who is at that time a holder of
other Warrants, the Company shall have the right to require the holder and the
transferee to make customary representations to the extent reasonably necessary
to assure that the transfer will comply with the Securities Act and any
applicable state securities laws. Each holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in
blank, shall be deemed negotiable, and that the holder hereof, when this
Warrant shall have been so endorsed, may be treated by the Company and all
other persons dealing with this Warrant as the absolute owner and holder hereof
for any purpose and as the person entitled to exercise the rights represented
by this Warrant and to the registration of transfer hereof on the books of the
Company; but until due presentment for registration of transfer on such books
the Company may treat the registered holder hereof as the owner and holder
hereof for all purposes, and the Company shall not be affected by any notice to
the contrary.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) hereof, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to be imprinted with the same legend appearing on the face of this
Warrant and to represent the right to purchase such number of shares as shall
be designated by said holder hereof at the time of such surrender. For purposes
hereof, the term "Warrant" shall be deemed to include any and all such
replacement Warrants, whether issued pursuant to this subparagraph (b) or any
other Paragraph hereof.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided
in this Paragraph 7, this Warrant shall be promptly cancelled by the Company.
The Company shall pay all taxes (other than securities transfer taxes) and all
other expenses and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.
(e) REGISTER. The Company shall maintain, at its principal office in
Fort Worth, Texas (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(f) REGISTRATION RIGHTS. The issuance of any Warrant Shares required
to be reserved for purposes of exercise of this Warrant and the public
distribution of such Warrant Shares are entitled to the benefits of the
registration rights set forth in the Purchase Agreement.
SERIES B WARRANT - PAGE 8
<PAGE> 9
8. NOTICES. All notices, requests, and other communications required
or permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail, postage prepaid and addressed, to such holder at
the address shown for such holder on the books of the Company, or at such other
address as shall have been furnished to the Company by notice from such holder.
All notices, requests, and other communications required or permitted to be
given or delivered hereunder to the Company shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail, postage
prepaid and addressed, to the office of the Company at 500 Commerce Street,
Fort Worth, Texas, 76102-5439, Attention: Chief Executive Officer, or at such
other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may
be sent by telegram or telex, but shall in such case be subsequently confirmed
by a writing personally delivered or sent by certified or registered mail as
provided above. All notices, requests, and other communications shall be deemed
to have been given either at the time of the delivery thereof to (or the
receipt by, in the case of a telegram or telex) the person entitled to receive
such notice at the address of such person for purposes of this Paragraph 8, or,
if mailed, at the completion of the third full day following the time of such
mailing thereof to such address, as the case may be.
9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF TEXAS, WITHOUT REGARD TO ANY CHOICE OF
LAW PRINCIPLES OF SUCH STATE.
10. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific enforcement of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may not be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall, to the extent provided
in Section 4(e), be binding upon any entity succeeding to the Company by
merger, consolidation, or acquisition of all or substantially all the Company's
assets.
SERIES B WARRANT - PAGE 9
<PAGE> 10
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on this 4th day of October, 1999.
GAINSCO, INC.
By: /s/ Glenn W. Anderson
-----------------------------------------
Glenn W. Anderson,
President and Chief Executive Officer
SERIES B WARRANT - PAGE 10
<PAGE> 11
FORM OF EXERCISE AGREEMENT
Dated: ,
------------- -------
To:
Attention:
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase ______ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per
share provided by such Warrant (in cash or by certified or official bank check
in the amount of $____________) held by the undersigned and any applicable
taxes payable by undersigned. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:
Name:
Signature:
Title of Signing Officer or Agent (if any):
Note: The above signature should correspond exactly with the name
on the face of the attached Warrant or with the name of the
assignee appearing in the assignment form.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.
SERIES B WARRANT - PAGE 11
<PAGE> 12
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights represented by and under the attached Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
<TABLE>
<CAPTION>
Name of Assignee Address No. of Shares
---------------- ------- -------------
<S> <C> <C>
</TABLE>
, and hereby irrevocably constitutes and appoints _______________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: ,
------------- -------
Name:
Signature:
Title of Signing Officer or Agent
(if any):
Address:
Note: The above signature should
correspond exactly with the name
on the face of the within Warrant.
SERIES B WARRANT - PAGE 12
<PAGE> 1
EXHIBIT 99.21
AMENDMENT NO. 4
TO
RIGHTS AGREEMENT
AMENDMENT NO. 4 TO RIGHTS AGREEMENT, dated as of June 29, 1999 (the
"Amendment"), between GAINSCO, INC., a Texas corporation (the "Company"), and
Continental Stock Transfer & Trust Company (the "Rights Agent").
WITNESSETH
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of March 3, 1988 (as subsequently amended, the "Rights
Agreement") (terms defined in the Rights Agreement are used herein with the same
meaning unless otherwise defined herein);
WHEREAS, the Company and Goff Moore Strategic Partners, L.P., a Texas
limited partnership ("GMSP"), have entered into a Securities Purchase Agreement
dated as of June 29, 1999; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the Rights Agreement be amended as hereinafter set forth:
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
SECTION 1. The definition of Acquiring Person in the Rights Agreement
is hereby amended to read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Stock then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company or an
entity holding shares of Common Stock for, or pursuant to the terms of,
any such plan or (iv) any GMSP Entity until the GMSP Exclusion
Termination Date. For purposes of this Agreement, any calculation of
the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any
AMENDMENT NO. 4 TO RIGHTS AGREEMENT
<PAGE> 2
Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of the dividend. As used in
this Agreement, (i) "GMSP" means Goff Moore Strategic Partners, a Texas
limited partnership, (ii) "GMSP Entity" means one or more of GMSP and
any Affiliate or Associate of GMSP (individually or collectively),
(iii) "Securities Purchase Agreement" means the Securities Purchase
Agreement dated June 29, 1999, between the Company and GMSP, and (iv)
"GMSP Exclusion Termination Date" means the earlier to occur of (A) the
termination (other than pursuant to the successful consummation of the
transactions contemplated thereby) of the Securities Purchase Agreement
and (B) such time as one or more of the GMSP Entities (individually or
collectively) become(s) the Beneficial Owner of more than 35% of the
Common Stock then outstanding (other than to the extent that any GMSP
Entity becomes the Beneficial Owner of more than 35% of the Common
Stock then outstanding (i) as a direct result of the repurchase or
purchase by the Company or any Subsidiary of the Company of Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock, unless thereafter any GMSP Entity purchases additional
shares of Common Stock, or (ii) as a result of acquiring Beneficial
Ownership of additional shares of Common Stock pursuant to any stock
option or other employee benefit plan of the Company).
SECTION 2. Except as expressly amended hereby, the Rights Agreement is
hereby ratified and confirmed and shall remain in full force and effect.
AMENDMENT NO. 4 TO RIGHTS AGREEMENT
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: GAINSCO, INC.
By /s/ Sam Rosen By /s/ Glenn W. Anderson
------------------------------- ---------------------------------
Name: Sam Rosen Name: Glenn W. Anderson,
Title: Secretary Title: President and Chief
Executive Officer
Attest: CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By /s/ Thomas Jennings By /s/ W.F. Seegraber
------------------------------- ---------------------------------
Name: Thomas Jennings Name: W.F. Seegraber
Title: Assistant Secretary Title: Vice President
AMENDMENT NO. 4 TO RIGHTS AGREEMENT
3
<PAGE> 1
EXHIBIT 99.22
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (the "Amendment") dated
as of October 4, 1999, among GAINSCO, INC. and GAINSCO SERVICE CORP.
("Borrowers") and BANK ONE, NA ("Lender"), a national banking association with
its principal office in Chicago, Illinois.
R E C I T A L S:
1. Borrowers and Bank One, Texas, N.A. ("Bank One Texas") have entered
into the Revolving Credit Agreement dated November 13, 1998 (the "Loan
Agreement") wherein Bank One Texas made the Loan to Borrowers for the purposes
described in the Loan Agreement.
2. Immediately before the execution of this Amendment, Bank One Texas
has sold and assigned to Lender (the "Assignment") all right, title and interest
of Bank One Texas in the Loan and all rights and obligations of Bank One Texas
under the Loan Agreement and Loan Documents.
3. GAINSCO has as of the date of this Amendment, pursuant to the
Securities Purchase Agreement dated as of June 29, 1999 (the "Purchase
Agreement") between GAINSCO and Goff Moore Strategic Partners, L.P.("GMSP"),
issued and sold 31,620 shares of its Series A Convertible Preferred Stock and
warrants to purchase up to 3,100,000 shares of GAINSCO common stock to GMSP (the
"Transaction"), which constitutes a Change in Control.
4. Borrowers have requested Lender to consent to the Transaction and to
make certain amendments to the Loan Agreement, which Lender is willing to do
upon the conditions and subject to the provisions hereof.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Loan Agreement, as amended hereby.
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 1
<PAGE> 2
ARTICLE II
Amendments
Section 2.1 Definitions. Effective as of the date hereof,
(a) the following definitions in Section 1.1 of the Loan
Agreement are amended to read in their entirety as follows:
"Acquired Companies" means National Specialty Lines,
Inc., Lalande Financial Group, Inc. and DLT Insurance
Adjusters, Inc.
"Agreement" means the Loan Agreement, as amended by
the First Amendment.
"Lender" means Bank One, NA, a national banking
association.
(b) the definition of "Change in Control" is amended by adding
a sentence at the end thereof to read as follows:
Notwithstanding any other provision hereof, except for
additional purchases of Common Stock by GMSP of up to an
aggregate of 35% of the issued and outstanding Common Stock to
the extent permitted by Section 6.9 of the GMSP Purchase
Agreement as in effect on the date of the First Amendment, any
acquisition by GMSP or any Affiliate of GMSP of any Common
Stock, preferred stock or other equity securities of GAINSCO,
any warrants or other rights to purchase or otherwise acquire
any such securities or any securities or instruments
convertible into such securities, other than the securities
purchased in the GMSP Transaction, shall constitute a Change
in Control.
(c) the following definitions are added to Section 1.1 of the
Loan Agreement:
"First Amendment" means the First Amendment to
Revolving Credit Agreement dated as of October 4, 1999 among
Borrowers and Lender.
"GMSP" means Goff Moore Strategic Partners, L.P.
"GMSP Purchase Agreement" means the Securities
Purchase Agreement dated as of June 29, 1999 between GAINSCO
and GMSP.
"GMSP Transaction" means the purchase by GMSP on
October 4, 1999 of 31,620 shares of Series A Convertible
Preferred Stock of
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 2
<PAGE> 3
GAINSCO and warrants to purchase up to 3,100,000 shares of
Common Stock pursuant to the GMSP Purchase Agreement.
"Net Worth" means net worth as shown on a balance
sheet prepared in accordance with GAAP.
Section 2.2 Limitation on Indebtedness. Section 7.1 of the Loan
Agreement is amended to read in its entirety as follows:
7.1 LIMITATION ON INDEBTEDNESS. Borrowers shall not,
and shall not permit any of the other Companies to, incur,
guarantee, or otherwise be or become, directly or indirectly,
liable in respect of any Indebtedness, except (a) Indebtedness
arising out of this Agreement and (b) other Indebtedness not
exceeding $1,000,000 in the aggregate outstanding at any date.
Section 2.3 Investments. Section 7.5 of the Loan Agreement is amended
by adding new subsections (h) and (i) thereto to read in their entirety as
follows:
(h) with respect to GAINSCO, Investments and
re-Investments of the proceeds of the sale by it of the
securities to GMSP in the GMSP Transaction and of the type
described in the Policy Letter dated October 4, 1999 between
GAINSCO and GMSP (it being understood that this subsection (h)
shall not permit any Investments by GAINSCO of any assets
other than such proceeds),
(i) the acquisition disclosed to Lender in connection
with the execution and delivery of the First Amendment for a
purchase price of up to $7,000,000.
Section 2.4 Surplus Debenture. Section 7.13 of the Loan Agreement is
amended to read in its entirety as follows:
7.13 SURPLUS DEBENTURE. GSC shall not at any time
amend, modify, cancel, terminate or discharge, or waive
compliance with, or fail to enforce, the terms of the Surplus
Debenture; provided, however, that GCMIC may make prepayments
thereon in the aggregate amount of up to $1,000,000.
Section 2.5 Minimum Consolidated Net Worth. Section 7.15 of the Loan
Agreement is amended by deleting the dollar amount "$85,000,000" in subsection
(a) thereof and inserting "$100,000,000" in the place thereof.
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 3
<PAGE> 4
Section 2.6 Risk-Based Capital Ratio. Section 7.18 of the Loan
Agreement is amended by deleting the ratio "2.25 to 1.0" where it appears in
such section and inserting "2.00 to 1.0" in the place thereof.
Section 2.7 Statutory Surplus. Section 7.19 of the Loan Agreement is
amended to read in its entirety as follows:
7.19 MINIMUM STATUTORY SURPLUS. Borrowers shall not
permit, (a) as of the end of the fiscal quarters ending
September 30, 1999 and December 31, 1999, the Statutory
Surplus of GAIC to be less than $64,700,000 or (b) as of the
end of the fiscal quarter ending March 31, 2000 and of each
fiscal quarter thereafter, the Statutory Surplus of GAIC to be
less than the sum of (i) $64,700,000, (ii) an amount equal to
50% of the cumulative Statutory Earnings of GAIC beginning
with the fiscal quarter which begins on April 1, 2000 through
the last day of the most recent fiscal quarter ending on or
prior to the determination date and (iii) an amount equal to
100% of all capital contributions and other Investments made
in GAIC after the date of the First Amendment.
Section 2.8 Events of Default. Section 8.1(j) of the Loan Agreement is
amended to read in its entirety as follows:
(j) GCMIC shall fail to request, on a timely basis
and in proper form, the approval of the Commissioner of
Insurance of the State of Texas to make scheduled payments on
the Surplus Debenture.
Section 2.9 Limitation on Creation of Subsidiaries. A new Section 7.23
is added to the Loan Agreement to read in its entirety as follows:
7.23 LIMITATION ON CREATION OF SUBSIDIARIES.
Notwithstanding anything to the contrary contained in this
Agreement, Borrowers shall not, and shall not permit any of
the other Companies to, establish, create, acquire or permit
to exist any new Material Subsidiary unless (a) at least 10
Business Days prior written notice thereof is given to Lender,
(b) such new Material Subsidiary is a wholly owned Subsidiary
of GAINSCO or another Subsidiary that is a wholly owned
Subsidiary of GAINSCO, (c) each such new Material Subsidiary
that is not an insurance company shall, concurrently with the
creation or acquisition thereof enter into a guaranty of the
full payment and performance of the Obligation in form and
substance satisfactory to
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 4
<PAGE> 5
Lender and (d) GAINSCO and/or each Subsidiary directly owning
all or any portion of the capital stock of such new Material
Subsidiary shall execute and deliver to Lender a pledge
agreement in form and substance satisfactory to Lender wherein
such owner(s) shall grant to Lender a security interest in all
such capital stock together with the delivery to Lender of
certificates representing 100% of such capital stock, with
stock powers duly executed in blank. In addition, such new
Material Subsidiary shall execute and deliver or cause to be
executed and delivered, all other relevant documentation
(including, without limitation, such legal opinions as shall
have been reasonably requested by Lender) of the type as such
new Material Subsidiary would have had to deliver if such new
Subsidiary were a Subsidiary on the Closing Date. All actions
required by this Section 7.23 shall be taken to the
satisfaction of Lender and shall be at the sole cost and
expense of Borrowers. As used herein, "Material Subsidiary"
shall mean a Subsidiary of GAINSCO having assets with a fair
market value of $1,500,000 or a Net Worth of $1,500,000.
Section 2.10 Notice Address. The address for notices to Lender referred
to in Section 9.4 of the Loan Agreement is amended to read as set forth on the
signature page to this Amendment.
Section 2.11 Assignment. In order to acknowledge the Assignment,
Lender, Bank One Texas, Borrowers and the other parties thereto shall have
executed the Notice of Assignment (the "Assignment Acknowledgment") in the form
of Exhibit 1 hereto.
Section 2.12 Exhibits and Schedules; Modifications to Representations
and Warranties. Exhibits A and E and Schedule 5.20 to the Loan Agreement are
amended to read in their entirety in the forms of Exhibits 2 , 3 and 4 hereto.
With respect to Section 5.19 of the Loan Agreement, Lender acknowledges the De
La Torre Insurance Adjusters, Inc. has changed its name to DLT Insurance
Adjusters, Inc. Section 5.23 of the Loan Agreement is modified to reflect the
Purchase Agreement as a material contract.
ARTICLE III
Limited Waiver
Section 3.1 Limited Waiver. By its execution of this Amendment, Lender
hereby consents to GAINSCO entering into the Transaction and hereby waives any
Event of Default that would otherwise occur under Section 8.1(m) of the Loan
Agreement solely by reason of the consummation of the Transaction, the
conversion of the Series A Preferred Stock (as such term is defined in the
Purchase Agreement) into GAINSCO Common Stock or the exercise of the Series A
Warrant or the Series B Warrant (as such terms are defined in the Purchase
Agreement) in accordance with their terms and additional purchases of Common
Stock by GMSP of up to an aggregate of 35% of the issued and
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 5
<PAGE> 6
outstanding Common Stock to the extent permitted by Section 6.9 of the Purchase
Agreement as in effect on the date of this Amendment.
ARTICLE IV
Conditions Precedent
Section 4.1 Conditions Precedent. The obligation of Lender to enter
into this Amendment is subject to the conditions precedent that on or before the
date hereof Lender shall have received all of the following in form and
substance acceptable to it and its counsel: (a) this Amendment, duly executed by
Borrowers and the other parties hereto; (b) the Assignment Acknowledgment, duly
executed by Borrowers and the other parties thereto; (c) a certificate of the
secretary of each Borrower setting forth resolutions of its board of directors
with respect to the authorization, execution, delivery and performance of this
Amendment and the other loan documents to which Borrowers are a party, the
officers of Borrowers authorized to sign such instruments, and specimen
signatures of the officers so authorized; (d) evidence satisfactory to Lender
that the Transaction has been consummated in accordance with the Purchase
Agreement, including evidence of the receipt of all necessary regulatory
approvals, together with copies of the Purchase Agreement and all documents and
agreements executed in connection therewith, including all Investment Management
Agreements and Policy Letters, certified to be true and correct by an officer of
Borrowers; (e) a legal opinion of counsel to Borrowers in form and substance
satisfactory to Lender; (f) Uniform Commercial Code financing statement
amendments executed by the Borrowers reflecting the Assignment and the name
change of De La Torre Insurance Adjusters, Inc.; (g) payment of all reasonable
fees and out-of-pocket expenses incurred by Lender, including without limitation
the reasonable fees and expenses of Lender's counsel, in connection with the
preparation and negotiation of this Amendment; and (h) such other documents,
opinions, certificates, agreements, instruments and evidences as Lender may
reasonably request.
ARTICLE V
Ratifications, Representations and Warranties
Section 5.1 Ratifications. The terms and provisions of the Loan
Agreement, as modified by this Amendment, and the other Loan Papers are hereby
ratified and confirmed and shall continue in full force and effect. By executing
this Amendment, Borrowers and each other party hereto acknowledges and agrees
that (a) the term "Loan" as defined in the Loan Agreement includes without
limitation all obligations, liabilities and indebtedness of Borrowers under the
Loan Agreement, as amended hereby; (b) each of the security and pledge
agreements included in the Loan Documents secures, among other indebtedness, the
payment and performance of all indebtedness, liabilities and obligations of
Borrowers under the Loan Agreement as amended by this Amendment; (c) each of the
Loan Agreement, as amended hereby, and the other Loan Documents is and shall
remain in full force and effect and is and shall continue to be the legal, valid
and binding obligation of Borrowers, enforceable against it in accordance with
its terms except to the extent such enforcement may be limited by applicable
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally.
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 6
<PAGE> 7
Section 5.2 Representations and Warranties. Borrowers hereby represents
and warrants to Lender that (a) the execution, delivery and performance of this
Amendment and all other documents executed and/or delivered in connection
herewith and all transactions and documents contemplated hereby and thereby have
been authorized by all requisite corporate action on the part of Borrowers; (b)
each of this Amendment and all other documents executed and/or delivered in
connection herewith constitute legal, valid and binding obligations of
Borrowers, as applicable, enforceable against each of them in accordance with
its terms, except to the extent such enforcement may be limited by applicable
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally; (c) there is no provision of law, in the articles of incorporation or
bylaws of either Borrower and no provision of any existing mortgage, contract,
lease, indenture or agreement binding on either Borrower which would be
contravened by the making or delivery of this Amendment, or any other document
executed and/or delivered in connection herewith, or by the performance or
observance of any of the terms hereof or thereof; (d) the execution, delivery
and performance of this Amendment and the transactions contemplated hereby and
thereby do not require any approval or consent of, or filing or registration
with, any governmental or any other agency or authority, of stockholders, or of
any other party or, if such approval or consent is required, the same has been
obtained; (e) each of the representations and warranties of Borrowers contained
in Article 5 of the Loan Agreement, as amended hereby, are true and correct on
and as of the date hereof as though made on such date; (f) as of the date hereof
no Default or Event of Default is in existence and Borrowers is not otherwise in
default of any provision of the Loan Agreement or the other Loan Documents; (g)
as of the date hereof, there has been no material adverse change in the
financial condition or operations of Borrowers or any Subsidiary since December
31, 1998.
ARTICLE VI
Miscellaneous
Section 6.1 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants made in this Amendment or any other
document furnished in connection with this Amendment shall survive the execution
and delivery of this Amendment, and no investigation by Lender or any closing
shall affect the representations, warranties and covenants or the right of
Lender to rely upon them.
Section 6.2 References to Loan Agreement. The Loan Agreement and any
and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Loan
Agreement, as amended hereby, are hereby amended so that any reference therein
to the Loan Agreement shall mean a reference to the Loan Agreement as amended
hereby.
Section 6.3 Further Assurances. Borrowers agrees that at any time and
from time to time, upon the written request of Lender, it will execute and
deliver such further documents and do such further acts and things as Lender may
reasonably request in order to fully effect the purposes of this Amendment and
to provide for the continued perfection and priority of the security interests
granted to Lender in the Loan Papers.
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 7
<PAGE> 8
Section 6.4 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 6.5 Applicable Law. This Amendment and all other documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Dallas, Dallas County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas except to the extent that federal
laws governing national banks shall have superseding application.
Section 6.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender and Borrowers, and their respective
successors and assigns, except Borrowers may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
Section 6.7 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 6.8 Effect of Waiver. No consent or waiver, express or implied,
by Lender to or for any breach of or deviation from any covenant, condition or
duty by Borrowers shall be deemed a consent or waiver to or of any other breach
of the same or any other covenant, condition or duty.
SECTION 6.9 ENTIRE AGREEMENT. THE LOAN AGREEMENT AS AMENDED HEREBY, THE
OTHER LOAN DOCUMENTS PROVIDED FOR HEREIN AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 6.10 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
[SIGNATURE PAGE FOLLOWS]
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 8
<PAGE> 9
EXECUTED as of the date first written above.
GAINSCO, INC.
By: /s/ Glenn W. Anderson
------------------------------
Its: President
GAINSCO SERVICE CORP.
By: /s/ Glenn W. Anderson
------------------------------
Its: President
BANK ONE, NA
By: /s/ Thomas W. Doddridge
------------------------------
Its: First Vice President
Address for Notices:
1 Bank One Plaza
Chicago, Illinois 60670-0085
Attn: Thomas W. Doddridge IL1-0085
Facsimile: (312) 732-4033
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 9
<PAGE> 10
ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned, a party to a Security Agreement dated as of
November 13, 1998, does hereby (i) consent to the amendments made in the
foregoing First Amendment to Revolving Credit Agreement, (ii) confirm its
continuing obligations under such Security Agreement for the benefit of Lender,
and (iii) agree that such Security Agreement shall continue in full force and
effect as to it.
AGENTS PROCESSING SYSTEMS, INC.
By: /s/ Glenn W. Anderson
--------------------------------
Its: President
RISK RETENTION ADMINISTRATORS, INC.
By: /s/ Glenn W. Anderson
--------------------------------
Its: President
GENERAL AGENTS PREMIUM FINANCE COMPANY
By: /s/ Glenn W. Anderson
--------------------------------
Its: President
MGA PREMIUM FINANCE COMPANY
By: /s/ Glenn W. Anderson
--------------------------------
Its: President
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 10
<PAGE> 11
NATIONAL SPECIALTY LINES, INC.
By: /s/ Glenn W. Anderson
---------------------------------
Its: President
DLT INSURANCE ADJUSTERS, INC.
By: /s/ Glenn W. Anderson
---------------------------------
Its: President
LALANDE FINANCIAL GROUP, INC.
By: /s/ Glenn W. Anderson
---------------------------------
Its: President
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT - PAGE 11
