EXHIBIT 6
WARRANT AGREEMENT
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This WARRANT AGREEMENT (this "Agreement") is made as of January 27,
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2000, by and among GTCR Capital Partners, L.P., a Delaware limited partnership
(the "Lender"), and Synagro Technologies, Inc., a Delaware corporation (the
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"Company"). Capitalized terms used herein and not otherwise defined shall have
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the meanings given to such terms in Section 5A hereof.
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WHEREAS, the Company and the Lender have entered into a Senior
Subordinated Loan Agreement, dated as of the date hereof (as the same shall be
modified, amended and supplemented from time to time, the "Loan Agreement");
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WHEREAS, pursuant to the Loan Agreement, the Lender will make a loan
to the Company on the date hereof in the principal amount of $20,000,000 (the
"Initial Loan") and, subject to the terms and conditions of the Loan Agreement,
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may make or arrange for loans to the Company from time to time after the date
hereof (each a "Subsequent Loan", and together with the Initial Loan, the
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"Loans") up to an aggregate principal amount (excluding the Initial Loan) of
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$105,000,000 (the "Aggregate Subsequent Loan Amount");
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WHEREAS, as an inducement and partial consideration to the Lender to
enter into the Loan Agreement and to make the Loans, the Company has agreed to
(i) issue to the Lender on the date hereof a warrant (the "Initial Warrant")
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representing the right to purchase the Initial Warrant Shares from the Company
and (ii) issue to the Lender on the date of each Subsequent Loan a warrant (each
a "Subsequent Warrant", and together with the Initial Warrant, the "Warrants")
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representing the right to purchase Subsequent Warrant Shares from the Company,
in each case pursuant to the terms and conditions of this Agreement and in the
form of Exhibit A attached hereto; and
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WHEREAS, the Company has authorized the issuance of the Warrants to
the Lender pursuant to the terms and conditions of this Agreement and each such
Warrant.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Issuance of Warrants; Closings.
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1A. Initial Closing. The issuance of the Initial Warrant to the
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Lender (the "Initial Closing") shall take place simultaneously with the closing
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of the Initial Loan pursuant to the Loan Agreement. The date of the Initial
Closing is hereinafter referred to as the "Initial Closing Date."
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1B. Issuance of Initial Warrant. At the Initial Closing, the
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Company shall issue to the Lender the Initial Warrant representing the right to
purchase the Initial Warrant Shares. The Initial Warrant shall be exercisable
immediately upon issuance thereof, and the Lender may exercise all or any
portion of the Initial Warrant at any time and from to time thereafter.
1C. Subsequent Closings. The issuance of each Subsequent Warrant to
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the Lender (each a "Subsequent Closing") shall take place simultaneously with
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the closing of each Subsequent
Loan. The date of each Subsequent Closing is hereinafter referred to as a
"Subsequent Closing Date").
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1D. Issuances of Subsequent Warrants. At each Subsequent Closing,
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the Company shall issue to the Lender a Subsequent Warrant representing the
right to purchase a number of Subsequent Warrant Shares equal to the product of
(A) the result of a fraction, the numerator of which is the dollar amount of
the subsequent Loans being made at such Subsequent Closing, and the denominator
of which is the dollar amount of the Convertible Preferred Stock being purchased
pursuant to the Preferred Stock Purchase Agreement at such Subsequent Closing,
and (B) the result of (1) the result of (x) the number of shares of Convertible
Preferred Stock being purchased pursuant to the Preferred Stock Purchase
Agreement, divided by (y) 0.875, minus (2) the number of shares of Convertible
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Preferred Stock being purchased pursuant to the Preferred Stock Purchase
Agreement at such Subsequent Closing.
SECTION 2. Representations and Warranties of the Company. As of the
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Initial Closing, and as of each Subsequent Closing, the Company represents and
warrants to the Lender as follows:
2A. Good Standing. The Company is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Delaware.
2B. Authority Relative to this Agreement. The Company has all
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requisite corporate power and authority to enter into and perform this Agreement
and to issue and deliver the Warrants to the Lender. The execution, delivery
and performance by the Company of this Agreement, including the issuance and
delivery of the Warrants to the Lender, have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
duly executed and delivered by the Company and is a legal, valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms (except as may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights).
2C. No Conflict or Violation. The execution and delivery of this
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Agreement by the Company, the performance by the Company of its obligations
hereunder and the issuance and delivery of the Warrants to the Lender does not
and will not conflict with or result in a violation of (i) the charter or bylaws
of the Company or (ii) any agreement, instrument, law, rule, regulation, order,
writ, judgment or decree to which the Company is a party or is subject, except
for such conflicts and violations which will not, individually or in the
aggregate, have a material adverse effect on the business, operations, assets or
condition (financial or otherwise) or business of the Company and will not
deprive the Lender of any material benefit under this Agreement.
2D. Validity of Issuance. The Warrants to be issued to the Lender
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pursuant to this Agreement and the Warrant Shares issued upon exercise of the
Warrants will, when issued, be duly and validly issued, fully paid and non-
assessable, and free and clear of all liens, claims and encumbrances.
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2E. Capital Structure (Initial Closing). The authorized and issued
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capital stock of the Company as of the Initial Closing and immediately
thereafter is as set forth on the Capitalization Schedule dated as of the
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Initial Closing Date and attached hereto.
2F. Capital Structure (Subsequent Closings). The authorized and
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issued capital stock of the Company as of any Subsequent Closing and immediately
thereafter will be as set forth on the Capitalization Schedule dated as of such
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Subsequent Closing Date and provided to the Lender prior to such Subsequent
Closing.
SECTION 3. Investment Representations; Legends.
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3A. Investment Representations. The Lender hereby represents and
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warrants to the Company that the Lender is acquiring the Warrants, and to the
extent any such Warrant has been exercised, the Warrant Shares, for its own
account and not with a view to, or for resale in connection with, the
distribution or other disposition thereof. The Lender agrees and acknowledges
that it will not, directly or indirectly, offer, transfer or sell any Warrant or
any Warrant Shares, or solicit any offers to purchase or acquire any Warrant or
any Warrant Shares, unless the transfer or sale is (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "Securities Act") and has been registered
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under any applicable state securities or "blue sky" laws or (ii) pursuant to an
exemption from registration under the Securities Act and all applicable state
securities or "blue sky" laws.
3B. Additional Investment Representations. The Lender hereby
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represents and warrants to the Company that (i) it has such knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment hereunder, (ii) it is able to incur a
complete loss of such investment, (iii) it is able to bear the economic risk of
such investment for an indefinite period of time and (iv) it is an "accredited
investor" as that term is defined in Regulation D under the Securities Act.
3C. Legend. The Lender hereby acknowledges that the Company will
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stamp or otherwise imprint each Warrant with a legend in substantially the
following form:
THIS WARRANT AND ANY SHARES OF STOCK OBTAINABLE UPON ITS EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE'S SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN
EXEMPTION THEREFROM.
In connection with the transfer of any Warrant or any Warrant Shares
(other than a transfer pursuant to a public offering registered under the
Securities Act, pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act (or any similar rules then in effect) or to an affiliate of the
Lender), the Lender shall deliver, upon the reasonable request of the Company,
an opinion of
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counsel, which counsel shall be knowledgeable in securities laws and which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer may be effected without registration under the Securities Act. Upon
receipt of an opinion of counsel reasonably satisfactory to the Company to the
effect that such legend no longer applies to any particular Warrant and/or
Warrant Shares, the Company shall promptly issue a replacement Warrant and/or
replacement certificate evidencing such Warrant Shares (as applicable), which
does not contain such legend.
SECTION 4. Inspection Rights. The Company shall permit any
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representatives designated by the Lender (so long as the Lender or any affiliate
of the Lender holds any Warrant Shares), any holder of at least 50% of the
Warrant Shares that are Common Stock or any holder of at least 50% of the
Warrant Shares that are Convertible Preferred Stock, upon reasonable notice and
during normal business hours and at such other times as any such holder may
reasonably request, to (i) visit and inspect any of the properties of the
Company and its subsidiaries, (ii) examine the corporate and financial records
of the Company and its subsidiaries and make copies thereof or extracts
therefrom and (iii) discuss the affairs, finances and accounts of the Company
and/or any of its subsidiaries with their respective directors, officers, key
employees and independent accountants (it being understood that such
representatives will keep all non-public information confidential to the full
extent permitted by applicable law).
SECTION 5. Miscellaneous
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5A. Definitions. For the purposes of this Agreement, the following
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terms shall have the following meanings:
"Convertible Preferred Stock" means the Company's Series D Convertible
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Preferred Stock, par value $.002 per share, and each series of the Company's
Convertible Preferred Stock issued, or from time to time issuable, pursuant to
the Preferred Stock Purchase Agreement with substantially the same rights and
preferences as the Company's Series D Convertible Preferred Stock, par value
$.002 per share (except that the number of shares of the Company's Common Stock
into which such securities are convertible shall be determined as set forth in
the Preferred Stock Purchase Agreement).
"Initial Warrant Shares" means 2,857.143 shares of the Company's
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Series D Convertible Preferred Stock, par value $.002 per share, obtained or
obtainable upon exercise of the Initial Warrant, as such number of shares shall
be adjusted from time to time in accordance with Section 2 of the Initial
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Warrant.
"Preferred Stock Purchase Agreement" means that certain Purchase
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Agreement by and between the Company and GTCR Fund VII, L.P., a Delaware limited
partnership, dated as of the date hereof.
"Subsequent Warrant Shares" means, with respect to a Subsequent
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Warrant, the shares issuable upon exercise of such Subsequent Warrant which
shares shall be Convertible Preferred Stock of the same series as the
Convertible Preferred Stock being issued pursuant to the Preferred Stock
Purchase Agreement at such Subsequent Closing.
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"Warrant Shares" means, collectively, the Initial Warrant Shares and
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any Subsequent Warrant Shares then outstanding.
5B. Notices. All notices and other communications provided for
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herein shall be dated and in writing and shall be deemed to have been duly given
(i) when delivered, if delivered personally, sent by registered or certified
mail, return receipt requested and postage prepaid, or sent via nationally
recognized overnight courier or via facsimile with confirmation of receipt and
(ii) when received if delivered otherwise, to the party to whom it is directed:
If to the Company:
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Synagro Technologies, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
With a copy to:
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Xxxxx Xxxxxxx & Xxxx LLP
3400 Chase Tower
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to the Lender:
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GTCR Capital Partners, L.P.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
With a copy to:
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
or to such other address as any party hereto shall have provided in a written
notice to the others.
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5C. Assignment. This Agreement and all the provisions hereof shall
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be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Agreement
nor any rights or obligations hereunder shall be assigned by the Company without
the prior written consent of the Lender.
5D. Amendment. This Agreement may be amended only by a written
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instrument signed by the Company, the holders of a majority of the Warrant
Shares.
5E. Waiver. Any party hereto may (a) extend the time for the
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performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions herein. Any agreement on the part of a
party hereto to any such extension or waiver shall only be valid as to such
party if set forth in an instrument in writing signed by such party.
5F. Severability. In the event that any one or more of the
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provisions hereof, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired; it being
intended that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
5G. Governing Law. All questions concerning the construction,
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validity and interpretation of this Agreement shall be governed by and construed
in accordance with the internal laws of the State of Illinois, without giving
effect to any choice of law or other conflict of law provision or rule (whether
of the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
5H. Counterparts. This Agreement may be executed in two or more
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counterparts (including by means of facsimile), each of which when so executed
and delivered shall be deemed to be an original and all of which together shall
be deemed to be one and the same agreement.
5I. Descriptive Headings. The headings in this Agreement are for
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convenience of reference only and shall not limit or otherwise affect the
meaning of the terms contained herein.
5J. Survival of Representations and Warranties. All representations
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and warranties made in writing by any party in connection herewith shall survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (including each Subsequent Closing), regardless
of any investigation made by the Lender or on its behalf.
5K. Purchase Prices for Initial Warrant. The Company and the Lender
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hereby agree that for purposes of Sections 1271 through 1275 of the Internal
Revenue Code of 1986, as amended (or any successor statute), the aggregate
original purchase price of the Initial Warrant is $2,857,143, which purchase
prices will be used by the Company and the Lender, as appropriate, for financial
reporting and income tax purposes.
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5L. Entire Agreement. Except as otherwise expressly set forth
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herein, this Agreement, the Loan Agreement and the Warrants embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be signed by its duly authorized officers as of the date first
written above.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Its: Chairman/CEO
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GTCR CAPITAL PARTNERS, L.P.
By: GTCR Mezzanine Partners, L.P.
Its: General Partner
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Its: Principal
Capitalization Schedule
EXHIBIT A
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THIS WARRANT AND ANY SHARES OF STOCK OBTAINABLE UPON ITS EXERCISE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE'S SECURITIES LAWS
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR
PURSUANT TO AN EXEMPTION THEREFROM.
SYNAGRO TECHNOLOGIES, INC.
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STOCK PURCHASE WARRANT
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Date of Issuance: ___________ Certificate No. W-______
FOR VALUE RECEIVED, Synagro Technologies, Inc., a Delaware corporation
(the "Company"), hereby grants to GTCR Capital Partners, L.P., a Delaware
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limited partnership, or its registered assigns (the "Registered Holder") the
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right to purchase from the Company, at any time or from time to time during the
Exercise Period (as defined in Section 1A below), up to ____________ shares (as
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such number of shares shall be adjusted from time to time in accordance with
Section 2 hereof) of the Company's [name of series of Convertible Preferred
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Stock], par value $.002 per share (the "Convertible Preferred"), at a per share
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purchase price equal to the "Exercise Price" (as defined in Section 5 below).
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This Warrant is issued pursuant to the terms of that certain Warrant Agreement,
dated as of January 27, 2000 (as amended and modified from time to time),
between the Company and GTCR Capital Partners, L.P. (the "Warrant Agreement")
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and is one of the "Warrants" described therein. Certain capitalized terms used
herein and not otherwise defined are defined in Section 5 hereof. Any
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capitalized terms used in this Warrant but not defined herein shall have the
meaning ascribed to such term in the Warrant Agreement. The amount and kind of
securities obtainable pursuant to the rights granted hereunder and the purchase
price to be paid for such securities are subject to adjustment pursuant to the
provisions contained in this Warrant.
For income tax purposes, the value of this Warrant on the date hereof
is $_______________.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
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1A. Exercise Period. The Registered Holder may exercise, in whole or
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part, the purchase rights represented by this Warrant at any time and from time
to time after the Date of Issuance hereof and prior to the tenth anniversary
thereof (the "Exercise Period"). The Company shall give the Registered Holder
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written notice of the expiration of the Exercise Period at least 30 days but not
more than 90 days prior to the end of the Exercise Period.
1B. Exercise Procedure.
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(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
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(a) a completed Exercise Agreement, as described in Section 1C
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below, executed by the Person exercising all or any portion of the purchase
rights represented by this Warrant (the "Purchaser");
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(b) this Warrant; and
(c) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in Exhibit II
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hereto evidencing the assignment of this Warrant to the Purchaser, in which
case the Registered Holder shall have complied with the provisions set
forth in Section 7 hereof.
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(ii) Certificates evidencing the Warrant Shares purchased upon
exercise of all or any portion of this Warrant shall be delivered by the Company
to the Purchaser within five business days after date of the Exercise Time.
Unless this Warrant has expired or all of the purchase rights represented hereby
have been exercised, the Company shall prepare a new Warrant, substantially
identical hereto, representing the rights formerly represented by this Warrant
which have not expired or been exercised and shall, within such five-day period,
deliver such new Warrant to the Person designated for delivery in the Exercise
Agreement.
(iii) The Warrant Shares issuable upon the exercise of this Warrant
shall be deemed to have been issued to the Purchaser at the Exercise Time, and
the Purchaser shall be deemed for all purposes to have become the record holder
of such Warrant Shares at the Exercise Time.
(iv) The issuance of certificates evidencing Warrant Shares upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such exercise and the related issuance of
Warrant Shares. Each Warrant Share issuable upon exercise of this Warrant shall
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be fully paid and nonassessable and free from all liens and charges with respect
to the issuance thereof.
(v) The Company shall not close its books against the transfer of
this Warrant or of any Warrant Share issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Warrant Shares
obtainable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(vi) The Company shall assist and cooperate with any Registered
Holder or Purchaser required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).
(vii) Notwithstanding any other provision hereof, if an exercise of
any portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company (whether by merger, sale of stock or
otherwise), the exercise of any portion of this Warrant may, at the election of
the holder hereof, be conditioned upon the consummation of the public offering
or the sale of the Company in which case such exercise shall not be deemed to be
effective until the consummation of such transaction.
(viii) The Company shall at all times reserve and keep available out
of its authorized capital stock the number of shares of its Convertible
Preferred issuable upon the exercise of this Warrant solely for the purpose of
issuance upon the exercise of this Warrant. The Company shall take all such
actions as may be necessary to assure that all such Warrant Shares may be so
issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which the Warrant Shares
may be listed (except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance). The Company shall not take
any action which would cause the number of authorized but unissued shares of its
Convertible Preferred to be less than the number of such shares required to be
reserved hereunder for issuance upon exercise of this Warrant.
1C. Exercise Agreement. Upon any exercise of this Warrant, a
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completed Exercise Agreement substantially in the form of Exhibit I attached
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hereto, executed by the Person exercising all or any portion of the purchase
rights represented by this Warrant, shall be delivered to the Company; provided
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that, if the Warrant Shares are to be issued to a Person other than the Person
whose name this Warrant is registered, the Exercise Agreement shall also state
the name of the Person to whom the certificates evidencing the Warrant Shares
are to be issued; provided further, if the number of Warrant Shares to be issued
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does not include all the Warrant Shares obtainable hereunder, the Exercise
Agreement shall also state the name of the Person to whom a new Warrant for the
unexercised portion of the rights hereunder is to be delivered. Such Exercise
Agreement shall be dated the actual date of execution thereof.
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Section 2. Adjustment of Exercise Price and Number of Shares. In
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order to prevent dilution of the rights granted under this Warrant, the Exercise
Price and the number of Warrant Shares obtainable upon exercise of this Warrant
shall each be subject to adjustment from time to time as provided in this
Section 2.
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2A. Subdivision or Combination of Stock. If the Company at any time
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subdivides (by any stock split, stock dividend, recapitalization or otherwise)
its outstanding shares of Convertible Preferred, then the Exercise Price in
effect immediately prior to such subdivision shall be proportionately reduced
and the number of Warrant Shares obtainable upon exercise of this Warrant shall
be proportionately increased. If the Company at any time combines (by reverse
stock split or otherwise) its outstanding shares of Convertible Preferred, then
the Exercise Price in effect immediately prior to such combination shall be
proportionately increased and the number of Warrant Shares obtainable upon
exercise of this Warrant shall be proportionately decreased.
2B. Reorganization, Reclassification, Consolidation, Merger or
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Sale. Any recapitalization, reorganization, reclassification, consolidation,
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merger, sale of all or substantially all of the Company's assets or other
transaction, which in each case is effected in such a way that the holders of
its outstanding shares of Convertible Preferred are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for such Convertible Preferred, is referred to herein
as an "Organic Change." Prior to the consummation of any Organic Change, the
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Company shall make appropriate provision (in form and substance reasonably
satisfactory to the Registered Holder of this Warrant) to insure that the
Registered Holder of this Warrant shall thereafter have the right to obtain and
receive, in lieu of or in addition to (as the case may be) the Warrant Shares
immediately theretofore obtainable and receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of Warrant Shares immediately
theretofore acquirable and receivable upon exercise of this Warrant had this
Warrant been exercised immediately prior to the Organic Change taking place. In
any such case, the Company shall make appropriate provision (in form and
substance satisfactory to the Registered Holder of this Warrant) with respect to
the Registered Holder's rights and interests to insure that the provisions of
this Section 2 and Sections 3 and 4 hereof shall thereafter be applicable to
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this Warrant (including, without limitation, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing entity
is other than the Company and in which the value of the Warrant Shares as
reflected by the terms of such transaction is less than the Exercise Price in
effect immediately prior to such transaction, an immediate adjustment of the
Exercise Price and a corresponding immediate adjustment in the number of Warrant
Shares obtainable and receivable upon exercise of this Warrant). The Company
shall not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the Company) resulting
from consolidation or merger or the entity purchasing such assets assumes by
written instrument (in form and substance satisfactory to the Registered Holder
of this Warrant), the obligation to deliver to the Registered Holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
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2C. Certain Events. If any event occurs of the type contemplated by
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the provisions of this Section 2 but not expressly provided for by such
provisions, then the Company's board of directors shall make an appropriate
adjustment in the Exercise Price and an appropriate adjustment in the number of
Warrant Shares obtainable upon exercise of this Warrant so as to protect the
rights of the holders of this Warrant; provided that no such adjustment shall
increase the Exercise Price or decrease the number of Warrant Shares obtainable
as otherwise determined pursuant to this Section 2.
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2D. Notices.
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(i) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Registered Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall give written notice to the Registered
Holder at least 20 days prior to the date on which the Company closes its books
or takes a record (A) with respect to any dividend or distribution upon the
Convertible Preferred, (B) with respect to any pro rata subscription offer to
holders of the Convertible Preferred or (C) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation. The Company shall
also give written notice to the Registered Holder at least 20 days prior to the
date on which any Organic Change, dissolution or liquidation shall take place.
Section 3. Liquidating Dividends. If the Company declares or pays a
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dividend upon the Convertible Preferred payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with generally accepted
accounting principles, consistently applied) except for a stock dividend payable
in shares of Convertible Preferred (a "Liquidating Dividend"), then the Company
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shall pay to the Registered Holder of this Warrant at the time of payment
thereof the Liquidating Dividend which would have been paid to the Registered
Holder on the Warrant Shares had this Warrant been fully exercised immediately
prior to the date on which the record was taken for such Liquidating Dividend
or, if no record was taken, the date as of which the record holders of
Convertible Preferred entitled to such dividends are to be determined.
Section 4. Purchase Rights. If at any time the Company grants,
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issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of its
shares of Convertible Preferred (the "Purchase Rights"), then the Registered
---------------
Holder of this Warrant shall be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such holder could
have acquired if such holder had held the number of Warrant Shares obtainable
upon complete exercise of this Warrant immediately before the date on which the
record is taken for the grant, issuance or sale of such Purchase Rights or, if
no such record is taken, the date as of which the record holders of its shares
of Convertible Preferred are to be determined for the grant, issue or sale of
such Purchase Rights.
Section 5. Definitions. The following terms have meanings set forth
-----------
below:
-5-
"Exercise Price" means $.01 per share, which is deemed paid upon the
--------------
issuance of this Warrant by virtue of the making of the Loan on the date hereof.
"Convertible Securities" means any stock or securities (directly or
----------------------
indirectly) convertible into or exchangeable for shares of Convertible
Preferred.
"Options" means any rights or options to subscribe for or purchase
-------
shares of Convertible Preferred and/or Convertible Securities.
"Person" means an individual, a partnership, a joint venture, a
------
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Warrant Share" means any share of Convertible Preferred obtained or
-------------
obtainable upon the exercise of this Warrant; provided that, if there is a
--------
change such that the securities issuable upon exercise of this Warrant are
issued by an entity other than the Company or there is a change in the type or
class of securities so issuable, then the term "Warrant Share" shall mean one
share of the security issuable upon exercise of the Warrants if such security is
issuable in shares, or shall mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
"Warrant Shares" means, collectively, each Warrant Share obtained or
--------------
obtainable upon the exercise of this Warrant.
Section 6. No Voting Rights; Limitations of Liability. This Warrant
------------------------------------------
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Registered Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of the Registered Holder shall give rise to
any liability of the Registered holder for any further payment in respect of the
Warrant Shares or as a stockholder of the Company.
Section 7. Warrant Transferable. Subject to the transfer conditions
--------------------
referred to in the legend imprinted hereon and in the Stockholders Agreement,
this Warrant and all rights hereunder are transferable, in whole or in part,
without charge to the Registered Holder, upon surrender of this Warrant with a
properly executed Assignment (in the form of Exhibit II attached hereto) at the
----------
principal office of the Company.
Section 8. Warrant Exchangeable for Different Denominations. This
------------------------------------------------
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each such new Warrant shall
represent such portion of such rights as is designated by the Registered Holder
at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
----------------
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant
-6-
shall be issued. All Warrants representing portions of the rights hereunder are
referred to herein collectively as the "Warrant."
-------
Section 9. Replacement. Upon receipt of evidence reasonably
-----------
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
this Warrant and/or any certificate evidencing Warrant Shares, and in the case
of any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Company (provided that, if the holder is a financial
--------
institution or other institutional investor, its own agreement shall be
satisfactory) or, in the case of any such mutilation, upon surrender of this
Warrant and/or such certificate (as applicable), the Company shall (at its
expense) execute and deliver, in lieu of this Warrant and/or such certificate, a
new Warrant and/or certificate of like kind representing the same rights
represented by, and dated the date of, such lost, stolen, destroyed or mutilated
Warrant and/or certificate (as applicable).
Section 10. Notices. Except as otherwise expressly provided herein,
-------
all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
certified or registered mail (i) to the Company at its principal executive
offices and (ii) to the Registered Holder of this Warrant, at such holder's
address as it appears in the records of the Company (unless otherwise indicated
by any such holder).
Section 11. Amendment and Waiver. Except as otherwise provided
--------------------
herein, the provisions of this Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the prior written consent of
the holder(s) of a majority of the purchase rights represented by this Warrant.
Section 12. Descriptive Headings. The descriptive headings of the
--------------------
several Sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.
Section 13. Governing Law. This Warrant shall be governed by, and
-------------
shall be construed and enforced in accordance with, the laws of the State of
Illinois without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of Illinois or any other jurisdictions) that would
cause the application of the laws of any jurisdiction other than the State of
Illinois.
* * * *
-7-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers and dated as of the Date of
Issuance.
SYNAGRO TECHNOLOGIES, INC.
By: ___________________________________
Its: ___________________________________
Attest:
By: ____________________________
Its: Secretary
EXHIBIT I
---------
EXERCISE AGREEMENT
------------------
To: Synagro Technologies, Inc. Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-____), hereby elects to purchase ________ shares of
[name of series of Convertible Preferred Stock] obtainable under such Warrant,
the purchase price of $.01 per share having previously been paid.
Signature: ____________________________
Name: ____________________________
On behalf of: ____________________________
Its: ____________________________
Address:
EXHIBIT II
----------
ASSIGNMENT
----------
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W-_____) with respect to the number of Warrant Shares
set forth below and covered thereby, unto:
Names of Assignee Address Class of Shares No. of Shares
----------------- ------- --------------- -------------
Dated: Signature _______________________
_______________________
Witness _______________________
