EXHIBIT 10.11
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made as of March 1,
1997, among Blue Rhino Corporation, a Delaware corporation (the "Corporation"),
and Platinum Propane Holding, L.L.C., a Delaware limited liability company (the
"Purchaser").
R E C I T A L S:
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The Corporation desires to sell to the Purchaser and the Purchaser desires
to purchase from the Corporation (a) 2,000,000 shares of Common Stock of the
Corporation, par value $0.01 per share at a price of $0.50 per share (the
"Shares") and (b) a Warrant to purchase 1,500,000 shares ("Warrant") of Common
Stock of the at a warrant price of $0.50 per share (together the Shares and
Warrant referred to herein as the "Securities")
NOW THEREFORE, the parties hereto agree as follows:
1. Authorization of the Securities. The Corporation has authorized the
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issuance and sale to the Purchaser of 2,000,000 Shares upon the execution of
this Agreement and an additional 1,500,000 shares of its Common Stock upon the
exercise of the Warrant. The Corporation has also authorized issuance of and
delivery to the Purchasers of the Warrant.
2. Subscriptions; Issuance; and Closing.
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A. Subscription. The Purchaser hereby agrees to purchase the Shares
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and the Warrant for a total purchase price of $1,000,000.00.
B. Delivery of Shares. At the Closing (as defined below) the
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Corporation shall deliver to the Purchaser a certificate representing the Shares
registered in the name of the Purchaser.
C. Warrant Issuance. In consideration of the Purchaser's
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subscription to purchase Shares, as described above, the Corporation agrees to
issue the Warrant to purchase an additional 1,500,000 shares of the
Corporation's Common Stock. The Warrant shall be in form and substance
substantially similar to Exhibit A attached hereto.
D. Closing Mechanics. The closing (the "Closing") for the purchase
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and sale of the Securities will take place at the offices of the Corporation on
March 1, 1997 (the "Closing Date"), or at such other place or on such other date
as may be mutually agreeable to the Corporation and the Purchaser. At the
Closing, the Corporation will deliver to the Purchaser the Shares and Warrant to
be purchased as part of the Securities, registered on the books of the
Corporation in the Purchaser's or its nominee's name. Payment of the purchase
price for the
Securities shall be by a cashier's or certified check, or by wire transfer of
immediately available funds to the Corporation's account at a bank specified by
the Corporation.
3. Conditions of the Purchaser's Obligation at the Closing.
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A. The obligation of Purchaser to purchase and pay for the
Securities at the Closing is subject to the satisfaction as of the Closing Date
of the following conditions:
(i) Representations and Warranties. The representations and
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warranties contained in Section 6 hereof will be true and correct in all
material respects at and as of the Closing as though then made.
(ii) Amendment and Restatement of Certificate of Incorporation.
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The Corporation's Certificate of Incorporation (the "Certificate of
Incorporation") will have been amended and restated in form and substance
as set forth in Exhibit B hereto, will be in full force and effect under
the laws of the State of Delaware as of the Closing as so amended and will
not have been further amended or modified.
(iii) Amendment and Restatement of Registration Rights Agreement.
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The Registration Rights Agreement (the "Registration Rights Agreement")
shall have been amended and restated in form and substance as set forth in
Exhibit C hereto, the Purchaser shall have become a party to the
Registration Rights Agreement, and the Registration Rights Agreement will
be in full force and effect.
(iv) Blue Sky Clearances. The Corporation will have made all
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filings under applicable state securities laws, and will have taken all
other action, necessary to consummate the issuance of the Securities
pursuant to this Agreement in compliance with such laws.
(v) Closing Documents. The Corporation will have delivered to
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the Purchaser at the Closing all of the following documents:
(a) copies of the resolutions duly adopted by the
Corporation's Board of Directors authorizing the execution, delivery
and performance of this Agreement, the Registration Rights Agreement,
the Amended and Restated Articles of Incorporation and each of the
other agreements contemplated hereby, the filing of the amendment to
the Certificate of Incorporation referred to in Section 3A(ii), the
issuance and sale of the Shares and Warrant, and the reservation for
issuance upon exercise of the Warrant of an aggregate of 1,500,000
shares of Common Stock;
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(b) Consent of a majority of the holders of the 10.5%
Senior Discount Notes issued by the Corporation authorizing execution
and delivery of the Registration Rights Agreement, the Amended and
Restated Articles of Incorporation and each of the other agreements
contemplated thereby, the filing of the amendment to the Certificate
of Incorporation referred to in Section 3A(ii), the issuance and sale
of the Shares and Warrant, and the reservation for issuance upon
exercise of the Warrant of an aggregate of 1,500,000 shares of Common
Stock;
(c) Consent of 66.7% of the Series A Preferred Shareholders
of the Corporation authorizing execution and delivery of the
Registration Rights Agreement, the Amended and Restated Articles of
Incorporation and each of the other agreements contemplated thereby,
the filing of the amendment to the Certificate of Incorporation
referred to in Section 3A(ii), the issuance and sale of the Shares and
Warrant, and the reservation for issuance upon exercise of the Warrant
of an aggregate of 1,500,000 shares of Common Stock;
(d) Consent of Forseyth/XxXxxxxx Associates, Inc.
authorizing execution and delivery of the Registration Rights
Agreement;
(e) copies of the Amended and Restated Certificate of
Incorporation and the Corporation's bylaws;
(f) such other documents relating to the transactions
contemplated by this Agreement as any Purchaser may reasonably
request.
(vi) Proceedings. All corporate and other proceedings taken or
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required to be taken in connection with the transactions contemplated
hereby to be consummated at or prior to the Closing and all documents
incident thereto will be satisfactory in form and substance to the
Purchaser.
B. Waiver. Any condition specified in this Section 3 may be waived
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if consented to by the Purchaser; provided that no such waiver will be effective
against any Purchaser unless it is set forth in a writing executed by the
Purchaser.
4. Covenants.
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A. Negative Covenants. So long as any Shares or Warrants remain
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outstanding, the Corporation will not:
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(i) Mergers. Merge or consolidate with any Person or permit any
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subsidiary to merge or consolidate with any Person (other than, in the case
of a wholly-owned subsidiary, with or into the Corporation or any other
wholly-owned subsidiary);
(ii) Liquidations. Liquidate, dissolve or effect a
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recapitalization or reorganization in any form of transaction; and
(iii) Charter Amendments. Make any amendment to the
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Corporation's certificate of incorporation or by-laws, or file any
resolution of the Board with the Secretary of State of Delaware.
B. Affirmative Covenants. So long as any Shares or Warrants remain
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outstanding, the Corporation will:
(i) Preservation of Corporate Existence and Property;
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Operations. The Corporation agrees to preserve, protect, and maintain,
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and cause each subsidiary to preserve, protect, and maintain, (a) its
corporate existence, and (b) all rights, franchises, accreditations,
privileges, and properties the failure of which to preserve, protect, and
maintain could have a material adverse effect on the business, affairs,
assets, prospects, operations, or condition, financial or otherwise, of the
Corporation and its subsidiaries, if any, taken as a whole. The Corporation
and its subsidiaries, if any, will comply with all material agreements and
contracts, including, without limitation, all leases and loan agreements;
(ii) Reservation of Common Stock. The Corporation will at all
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times reserve and keep available out of its authorized but unissued shares
of Common Stock, solely for the purpose of issuance upon the exercise of
the Warrant, such number of shares of Common Stock issuable upon the
exercise of all outstanding Warrants. All shares of Common Stock which are
so issuable will, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation
will take all such actions as may be necessary to assure that all such
shares of Common Stock may be so issued without violation of any applicable
law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of common stock may be listed (except
for official notice of issuance which will be immediately transmitted by
the Corporation upon issuance); and
5. Transfer of Restricted Securities.
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A. Restricted Securities are transferable pursuant to (i) public
offerings registered under the Securities Act, (ii) Rule 144 of the Commission
(or any similar rule then in
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force) if such rule is available, (iii) the conditions specified in Subsection B
below, (iv) subject to Subsection D below, and (iv) subject to Subsection E
below.
B. In connection with the transfer of any Restricted Securities
(other than a transfer described in Subsection 5A(i) or (ii) above), the Holder
thereof will deliver written notice to the Corporation describing in reasonable
detail the transfer or proposed transfer, together with an opinion of counsel
which (to the Corporation's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the Holder of the Restricted Securities
delivers to the Corporation an opinion of counsel acceptable to the Corporation
that no subsequent transfer of such Restricted Securities will require
registration under the Securities Act, the Corporation will promptly upon such
contemplated transfer deliver new certificates for such Restricted Securities
which do not bear the Securities Act legend set forth in Section 5C. If the
Corporation is not required to deliver new certificates for such Restricted
Securities not bearing such legend, the Holder thereof will not transfer the
same until the prospective transferee has confirmed to the Corporation in
writing its agreement to be bound by the conditions contained in this Section
and Section 5C.
C. The Corporation shall place, and shall instruct any transfer
agent of the Corporation to place, a stop-transfer order on the Corporation's
shareholder record books which prohibits the Corporation, or any transfer agent
of the Corporation, from registering on the Corporation's books (i) any transfer
of the shares of Restricted Securities and (ii) the issuance of shares of Common
Stock upon any exercise of the Warrants that, in each case, were originally
granted or sold to Purchasers who are not "U.S. Persons" (as defined in Rule
902 under the Securities Act) unless such transfer or conversion is made in
accordance with the provisions of Regulation S (17 CFR (S)(S) 230.902 - 230.904)
under the Securities Act.
6. Representations and Warranties of the Corporation. As a material
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inducement to the Purchasers to enter into this Agreement and purchase the
Units, the Corporation hereby represents and warrants that:
A. Organization and Corporate Power. The Corporation is a
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corporation duly organized, validly existing and in good standing under the laws
of Delaware and is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify, except
where the failure to so qualify could not reasonably be expected to have a
material adverse effect on the financial condition, operating results, assets,
operations or business prospects of the Corporation. The Corporation has all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and to carry out the transactions contemplated by
this Agreement.
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B. Corporate Power; Successor Corporation. The Corporation has all
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requisite legal and corporate power and authority to enter into this Agreement
and all other agreements entered into pursuant hereto, to issue and sell the
Units and to carry out and perform its obligations under the terms of this
Agreement and all other agreements entered into pursuant hereto. The Corporation
is the successor corporation of Blue Rhino Corporation, a North Carolina
corporation ("BRC - North Carolina") pursuant to a statutory merger under
Delaware Law in which the Corporation is the survivor and is successor to all
rights, titles and interest of BRC-North Carolina. Where appropriate, references
to the Corporation in this Section 6 shall mean both the Corporation and BRC-
North Carolina as its predecessor.
C. Capitalization. As of the Closing Date, the Corporation's
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authorized capital stock will consist of (a) 64,500,000 Common Shares, and (b)
20,796,172 Series A Preferred Shares. As of the Closing Date, there shall be no
declared but unpaid dividends or undeclared dividend arrearage on any shares of
capital stock of the Corporation. After giving effect to the consummation of
the transactions contemplated by this Agreement, the only shares of capital
stock issued and outstanding, reserved for issuance or committed to be issued
will be:
(i) 21,385,341 issued and outstanding shares of Common Stock;
(ii) 1,502,745 shares of Common Stock reserved for issuance upon
the exercis e of the Warrant;
(iii) 16,344,294 shares of Common Stock reserved for issuance
upon th e exercise of the Existing Warrants;
(iv) 1,405,000 shares of Common Stock reserved for future grants
pursuant to the Corporation's stock option plan;
(v) 1,010,000 shares of Common Stock reserved for issuance upon
exercise of outstanding grants pursuant to the Corporation's stock option
plan.
(vi) 20,796,172 shares of Common Stock reserved for issuance
upon the conversions of the Series A Preferred Stock; and
(vii) 20,796,172 issued and outstanding shares of Series A
Preferred Stock.
There are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon the Corporation for
the purchase or acquisition of any shares of its capital stock, other than those
issued, reserved or committed to be issued pursuant to or listed in this
Agreement or as provided for in the Shareholders' Agreement or the
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Amended and Restated Certificate of Incorporation. All outstanding securities of
the Corporation were issued in compliance with all federal and state securities
laws.
D. Authorization. All corporate action on the part of the
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Corporation, its directors and shareholders necessary for the authorization,
execution, delivery and performance by the Corporation of this Agreement and all
other agreements entered into pursuant hereto and the consummation of the
transactions contemplated hereby and thereby, and for the authorization,
issuance and delivery of the Shares and Warrant, has been taken. This
Agreement and all other agreements entered into pursuant hereto, including the
Warrant, are legal, valid and binding obligations of the Corporation,
enforceable against the Corporation in accordance with their terms.
E. No Violation. The execution and delivery of this Agreement and
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all other agreements entered into pursuant hereto, the consummation of the
transactions provided for herein and therein or contemplated hereby and thereby,
and the fulfillment by the Corporation of the terms hereof or thereof, will not
(with or without notice or passage of time or both) (i) conflict with or result
in a breach of any provision of the certificate of incorporation or bylaws of
the Corporation, (ii) result in a default, give rise to any right of
termination, cancellation or acceleration, or require any consent or approval
which has not been obtained under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, loan, factoring arrangement, license,
agreement, lease or other instrument or obligation to which the Corporation is a
party or by which it or any of its assets may be bound or (iii) violate any law,
judgment, order, writ, injunction, decree, statute, rule or regulation of any
court, administrative agency, bureau, board, commission, office, authority,
department or other governmental entity applicable to the Corporation or any of
its assets.
F. Validity of Securities. The Shares and Warrant, when issued,
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sold and delivered in accordance with the terms of this Agreement, will be duly
and validly issued, fully paid, non-assessable and free and clear of all liens.
The underlying Common Stock issuable upon exercise of the Warrant has been duly
and validly reserved and, upon issuance in accordance with the exercise
provisions of the Warrant, will be duly and validly issued, fully paid, non-
assessable and free and clear of all liens.
G. Title to Properties; Liens and Encumbrances. The Corporation has
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good and marketable title to all of the assets necessary to conduct its business
as presently conducted or as proposed to be conducted.
H. Compliance with Law and Other Instruments. The Corporation is not
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in violation of any term of its Certificate of Incorporation or by-laws or of
the provisions of any mortgage, indenture, contract, agreement, instrument,
judgment, decree, order, statute, rule or regulation to which it is subject and
a violation of which could have a material adverse effect on
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its business, affairs, assets, prospects, operations, employee relations or
condition, financial or otherwise, or the Corporation's ability to perform its
obligations hereunder or under any agreement entered pursuant hereto. The
Corporation has all franchises, permits, licenses and approvals, necessary to
conduct its business as presently conducted. The Corporation has no knowledge of
or reason to expect any change to any law, statute, rule or regulation which
could adversely affect the ability of the Corporation to conduct its business as
presently conducted or as proposed to be conducted.
I. Registration Rights. Except as provided for in the Registration
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Rights Agreement, the Corporation is not under any obligation to register under
the Securities Act any of its currently outstanding securities or any of its
securities which may hereafter be issued.
7. Definitions. For the purpose of this Agreement, the following terms
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have the meanings set forth below:
"Affiliate" of particular person or entity means any other person
or entity controlling, controlled by or under common control with such
particular person or entity.
"Board of Directors" means the Corporation's duly elected Board of
Directors.
"Commission" means the Securities and Exchange Commission and any
governmental body or agency succeeding to the functions thereof.
"Default" means the failure of the Corporation or any subsidiary to
duly observe or perform any covenant, condition or agreement required to be
performed by the Corporation or a subsidiary under this Agreement, any agreement
entered into pursuant hereto or the certificates of Incorporation.
"Existing Warrants" means the Warrants to purchase (i) 4,214,185
shares of Common Stock at $0.0347037 per share, issued to certain investors on
December 1, 1994, (ii) 115,264 shares of Common Stock at $0.347037 per share,
issued to Xxxxx Xxxxxxxx ("Xxxxxxxx"), Xxxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxx
Xxxxxxxxxx ("Xxxxxxxxxx") and Xxxxxx X. Xxxxxx ("Xxxxxx") in connection with a
bridge loan in May 1995, (iii) 2,593,385 shares of Common Stock at $0.347037 per
share issued to Huizenga, Filipowski, Duchossois, Steele, and Xxxxx X. Xxxx
("Prim") in connection with their guarantee of loan to the Corporation in June
1995, (iv) 86,446 shares of Common Stock at $0.347037 per share issued to
Platinum Venture Partners I, L.P. in connection with a loan to the Corporation
in May 1995, (v) 259,338 shares of Common Stock at $0.347037 per share issued to
Platinum Venture Partners I, L.P. in connection with the extension of the
maturity on its loan to the Corporation on August 14, 1995, (vi) 6,612,926
shares of Common Stock at $0.347037 per share to be issued to the purchasers of
the 10.5% Senior Discount Notes and Warrants pursuant to that certain Unit
Purchase Agreement
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dated November 4, 1995 (the "Unit Purchase Agreement"), (vii) 960,000 shares of
Common Stock at $0.347037 per share issued to Xxxxxxxx, Xxxxxxxxxx and Peer
Xxxxxxxx or their assigns pursuant to the Unit Purchase Agreement and (viii)
1,502,745 shares of Common Stock at $0.50 per share issued to Xxxx/Forseyth L.P.
upon the extension of lease financing to the Corporation.
"Holder" of at least a certain percentage or number of Warrants,
Common Stock, or other securities shall mean any single Holder beneficially
owning at least such designated percentage or number of such securities, or each
member of a Group (hereinafter defined) if the Group has beneficial ownership
of, in the aggregate, at least such percentage or number of such securities.
"Person" means any individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Registration Rights Agreement" means that certain Amended and
Restated Registration Rights Agreement dated of even date herewith which amends
and restates in its entirety that certain Registration Rights Agreement dated
December 1, 1994 by and between the Corporation and certain of its investors.
"Restricted Securities" means (i) the Warrant, (ii) the Common Stock
issued upon exercise of Warrants, (iii) any securities issued with respect to
the securities referred to in clauses (i) through (ii) above by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, and (iv) if
applicable, the Notes. As to any particular Restricted Securities, such
securities will cease to be Restricted Securities when they have (a) been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, (b) become eligible for sale
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or (c) been otherwise transferred and new certificates for them
not bearing the Securities Act legend set forth in Section 8C herein have been
delivered by the Corporation in accordance with Section 5B. Whenever any
particular securities cease to be Restricted Securities under (a) or (b) above,
the Holder thereof will be entitled to receive from the Corporation, without
expense, new securities of like tenor not bearing a Securities Act legend of the
character set forth in Section 8C.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal law then in force.
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"Series A Preferred Stock" means the Corporation's Series A
Convertible Participating Preferred Stock.
"Shareholder's Agreement" means that certain Shareholder's Agreement
dated December 1, 1994 by and between the Corporation and its shareholders, as
amended.
"Underlying Common Stock" means (i) the Corporation's Common Stock
issued or issuable upon exercise of the Warrant, and (ii) any Common Stock
issued or issuable with respect to the securities referred to in clause (i)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. Any Person who holds the Warrant will be deemed to be the Holder
of the Common Stock obtainable upon the exercise of the Warrant in connection
with the transfer thereof or otherwise regardless of any restriction or
limitation on the conversion. As to any particular shares of Underlying Common
Stock, such shares will cease to be Underlying Common Stock when they have been
(a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (b) distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act (or any similar provision then in force).
8. Miscellaneous.
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A. Expenses. The Corporation agrees to pay, and hold each Purchaser
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and all Holders of the Warrants, Underlying Common Stock and the Notes harmless
against liability for the payment of, (i) the reasonable fees and expenses
incurred with respect to any amendments or waivers (whether or not the same
become effective) under or in respect of this Agreement, the agreements
contemplated hereby, the Certificate of Incorporation (including, without
limitation, in connection with any proposed merger or sale of the Corporation),
(ii) stamp and other taxes which may be payable in respect of the execution and
delivery of this Agreement or the issuance, delivery or acquisition of any
Warrants, any Notes or any shares of Common Stock issuable upon exercise of the
Warrants, (iii) reasonable fees and expenses incurred with respect to the
enforcement of the rights granted under this Agreement, the agreements
contemplated hereby, the Certificate of Incorporation, the Shareholders'
Agreement or the Registration Rights Agreement (iv) reasonable fees and expenses
of counsel for a Purchaser or such Holder in rendering a legal opinion in
connection with the sale or assignment of a Purchaser's or such Holder's
Warrants or Notes if a Purchaser or such Holder desires to sell or otherwise
transfer any or all of the Warrants or Notes held by it and counsel for the
Corporation declines to render a legal opinion to such Purchaser or such Holder,
whether or not registration under the Securities Act will be required for such
sale or transfer and (v) the reasonable fees and expenses incurred by any such
Person in connection with any transaction, claim or event which such Person
reasonably believes affects its investment in the Corporation and as to which
such Person seeks advice of counsel.
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B. Remedies. Each Holder will have all rights and remedies set
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forth in this Agreement, the Certificate of Incorporation and all rights and
remedies which such Holders have been granted at any time under any other
agreement or contract and all of the rights which such Holders have under any
law. Any Person having any rights under any provision of this Agreement will be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.
C. Purchaser's Investment Representations. Each Purchaser hereby
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severally represents to the Corporation the following:
(i) the Purchaser is a "U.S. Person" (as defined in Rule 902
(17 CFR (S) 230.902) under the Securities Act);
(ii) the Purchaser's state of residency for security law
purposes is the state referred to next to the Purchaser's name on the
signature pages hereto;
(iii) (a) the Purchaser is acquiring the Restricted
Securities purchased hereunder or acquired pursuant hereto for its own
account with the present intention of holding such securities for purposes
of investment, and that it has no intention of selling such securities in a
public distribution in violation of the federal securities laws or any
applicable state securities laws; provided that nothing contained herein
will prevent any Purchaser and subsequent Holders of Restricted Securities
from transferring such securities in compliance with the provisions hereof.
Each certificate for Restricted Securities purchased hereunder will be
imprinted with a legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be sold or offered for sale unless registered under said Act
or unless the holder of this certificate delivers to Blue Rhino
Corporation an opinion of counsel reasonably acceptable to Blue
Rhino Corporation stating that an exemption from such
registration is available.
(b) The Purchaser has the financial ability to bear
the economic risk of an investment in the Restricted Securities, has
adequate means of providing for its current needs and personal
contingencies, has no need for liquidity in such investment and could
afford a complete loss of such investment.
(c) The Purchaser was not formed for the specific
purpose of acquiring the Restricted Securities offered in this
transaction.
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(d) The Purchaser is an "accredited investor" as
defined in Rule 501(a) of Regulation D of the Securities Act.
(iv) The Purchaser's overall commitment to investments which
are not readily marketable is not disproportionate to its net worth and its
investment in the Corporation will not cause such overall commitment to
become excessive;
(v) The Purchaser has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of its investment in the Restricted Securities; and
(vi) (a) The Purchaser expressly acknowledges receipt of
the financial information distributed in connection with this offering. The
Purchaser acknowledges and agrees that the Purchaser has read and
understood the terms and conditions set forth in the financial information.
(b) The Purchaser has been given full opportunity to
ask questions of and to receive answers from representatives of the
Corporation concerning the terms and conditions of the investment and
the business of the Corporation and such other information as it
desires in order to evaluate an investment in the Restricted
Securities, and all such questions have been answered to the full
satisfaction of the Purchaser.
(c) In making its decision to acquire the Restricted
Securities, the Purchaser has relied solely upon independent
investigations made by it. In addition, the Purchaser initially
learned of the investment through a direct communication, and was
never presented or solicited by (x) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, (y) any seminar or
meeting whose attendees, including the Purchaser, had been invited as
a result of, subsequent to or pursuant to any of the foregoing, or (z)
any other form of general solicitation.
(d) The Purchaser understands that the shares of the
Restricted Securities have not been registered under the Securities
Act, the securities laws of any state, and are being issued in
reliance upon specific exemptions from registration thereunder, and
the Purchaser agrees that the shares of the Restricted Securities may
not be sold, offered for sale, transferred, pledged, hypothecated or
otherwise disposed of except pursuant to (x) a registration statement
with respect to such securities which is effective under the
Securities Act or under the securities act of any state, (y) Rule 144
under the Securities Act
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or (z) any other exemption from registration under the Securities Act
or under the securities act of any state relating to the disposition
of securities, provided an opinion of counsel is furnished, reasonably
satisfactory in form and substance to the Corporation, that an
exemption from the registration requirements of the Securities Act of
such state act is available. The Purchaser understands the legal
consequences of the foregoing to mean that he, she or it may be
required to bear the economic risk of its investment in the shares of
the Restricted Securities for an indefinite period or time. The
Purchaser understands that any instruments initially representing the
shares of the Restricted Securities shall bear legends restricting the
transfer thereof. The Purchaser agrees not to resell or otherwise
dispose of all or any shares of Restricted Securities acquired by the
Purchaser, except as permitted by law, including, without limitation,
any and all applicable provisions of this Section, the Agreement and
any regulations under the Securities Act and any state law or
regulations.
(e) The Purchaser understands that no federal or state
agency has made any finding or determination as to the fairness of an
investment in, or any recommendation or endorsement of, the shares of
the Restricted Securities.
D. Shareholders' Agreement. Each certificate for shares of Common
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Stock issued upon exercise of the Warrants shall bear any legends required under
the Shareholders' Agreement to the extent required thereof. Any certificate
issued at any time in exchange or substitution for any certificate bearing such
legend shall also bear such legend unless in the opinion of counsel elected by
the holder of such certificate (who may be an employee of such holder) and
reasonably acceptable to the Corporation, the restrictions contained in such
Shareholders' Agreement no longer apply because of the occurrence of one or more
events described therein.
E. Consent to Amendments/Waivers. Except as otherwise expressly
-----------------------------
provided herein, the provisions of this Agreement may be amended or waived and
the Corporation may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if and only if the Corporation has
obtained the written consent of the Purchaser. No other course of dealing
between the Corporation and the Purchaser or any delay in exercising any rights
hereunder or under the Certificate of Incorporation will operate as a waiver of
any rights of the Purchaser.
F. Survival of Representations and Agreements. All representations,
------------------------------------------
warranties and agreements contained herein or made in writing by any party in
connection herewith will survive the execution and delivery of this Agreement
and the consummation of the
- 13 -
transactions contemplated hereby, regardless of any investigation made by the
Purchaser or on its behalf.
G. Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and may be enforced by the respective
successors and assigns of the parties hereto whether so expressed or not. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the Purchaser's benefit as a
purchaser or Holder of the Warrant, Shares, or the Underlying Common Stock are
also for the benefit of, and enforceable by, any Affiliate of the Purchaser
which becomes the Holder of the Warrant, the Shares or the Underlying Common
Stock or any part thereof (whether by sale, assignment or otherwise).
H. Capital and Surplus. The Corporation agrees that the capital of
-------------------
the Corporation (as such term is used in Section 154 of the General Corporation
Law of Delaware) in respect of the Common Stock issued pursuant to this
Agreement will be equal to the aggregate par value of such shares. The
Corporation further agrees that, except as contemplated herein, it will not
increase the capital of the Corporation with respect to any shares of the
Corporation's capital stock at any time on or after the date of this Agreement.
I. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
J. Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
K. Descriptive Headings. The descriptive headings of this
--------------------
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
L. Governing Law. This agreement shall be governed by the corporate
-------------
law of Delaware.
M. Notices. All notices, demands or other communications to be
-------
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable express courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
- 14 -
communications will be sent to the Purchaser and to the Corporation at the
address indicated below:
Blue Rhino Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Chief Executive Officer
Platinum Propane Holding, L.L.C.
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxxx X. XxXxxxxxx
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
- 15 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
BLUE RHINO CORPORATION
By /s/ Xxxxx X. Xxxx
-------------------------------
Xxxxx X. Xxxx, President
PLATINUM PROPANE HOLDING, L.L.C.
By: /s/ Xxxxx X. XxXxxxxxx
-------------------------------
Xxxxx X. XxXxxxxxx, Manager
- 16 -
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR
SALE UNLESS REGISTERED UNDER SAID ACT OR UNLESS THE HOLDER OF THIS WARRANT
DELIVERS TO BLUE RHINO CORPORATION AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO BLUE RHINO CORPORATION STATING THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER
ARE ALSO BENEFITED BY AND SUBJECT TO A SERIES A SECURITIES PURCHASE AGREEMENT, A
REGISTRATION RIGHTS AGREEMENT EACH DATED AS OF DECEMBER 1, 1994, AND EACH BY AND
AMONG BLUE RHINO CORPORATION, A DELAWARE CORPORATION, PLATINUM VENTURE PARTNERS
I, L.P., A DELAWARE LIMITED PARTNERSHIP, AND CERTAIN OTHER INVESTORS, AND A
SHAREHOLDERS' AGREEMENT DATED THE SAME DATE, BY AND AMONG BLUE RHINO
CORPORATION, A DELAWARE CORPORATION, THE INVESTORS AND THE MANAGEMENT
STOCKHOLDERS, COPIES OF WHICH ARE ON FILE WITH THE CORPORATION.
Dated: December 1, 1994
WARRANT
To Purchase _______ Shares of Common Stock (Subject to adjustment herein)
____________________________
Expiring December 1, 2004
THIS IS TO CERTIFY THAT, for value received, _________________________ or
registered assigns is entitled to purchase from Blue Rhino Corporation, a
Delaware corporation (the "CORPORATION"), at any time and from time to time
prior to 5:00 p.m., Chicago, Illinois time, on December 1, 1994, at the
principal office of the Corporation which is currently 000 Xxxxxxxxx Xxxx,
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000 (or such other address as the Corporation
shall specify by notice to all Warrantholders), at the Exercise Price, the
number of shares of Common Stock, $0.001 par value (the "COMMON STOCK"), of the
Corporation shown above, all subject to adjustment and upon the terms and
conditions as hereinafter provided, and is entitled also to exercise the other
appurtenant rights, powers and privileges hereinafter described.
This Warrant is one of the one or more warrants (the "WARRANTS"), of the
same form and having substantially the same terms as this Warrant, which have
been or will be issued pursuant to the Securities Purchase Agreement.
Certain terms used in this Warrant are defined in Article VI.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise and Payment.
------------------------------
(a) Method of Exercise. To exercise this Warrant in whole or in part,
------------------
the Holder shall deliver to the Corporation, at the principal office of the
Corporation, (a) this Warrant, (b) a written notice, in substantially the form
of the Subscription Notice attached hereto, of such Holder's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased or converted into, as the case may be, the denominations
of the share certificate or certificates desired and the name or names in which
such certificates are to be registered, and (c) payment to the Corporation of
the amount equal to the product of the then applicable Exercise Price multiplied
by the number of shares of Common Stock then being purchased pursuant to one of
the payment methods permitted under Section 1.l(b) below.
(b) Method of Payment. Payment shall be made either (1) by cash,
-----------------
money order, certified or bank cashier's check, (2) by wire transfer, (3) by
converting the Warrant, or any portion thereof, into Common Stock pursuant to
Section 1.1 (c) below ("WARRANT CONVERSION") or (4) any combination of the
foregoing at the option of the Holder.
(c) Payment by Warrant Conversion. Subject to any limitations set
-----------------------------
forth in this Warrant, the Holder may exercise the purchase right represented by
this Warrant with respect to a particular number of shares of Common Stock
subject to this Warrant ("CONVERTED WARRANT STOCK") and elect to pay for the
Converted Warrant Stock through Warrant Conversion as defined in Section 1.1(b),
by specifying such election in the Subscription Notice. In such event, the
Corporation shall deliver to the Holder (without payment by the Holder of any
Exercise Price or any cash or other consideration) that number of shares of
Common Stock equal to the quotient obtained by dividing (x) the value of this
Warrant (or the specified portion hereof) on the Exercise Date, which value
shall be determined by subtracting (A) the aggregate Exercise Price of the
Converted Warrant Stock immediately prior to the exercise of the Warrant from
(B) the aggregate Fair Market Value of the Converted Warrant Stock issuable upon
exercise of this Warrant (or the specified portion hereof) on the Exercise Date,
by (y) the Fair Market Value of one share of Common Stock on the Exercise Date.
For purposes of this Section 1, "FAIR MARKET VALUE" of a share of Common Stock
as of a particular date shall mean:
(i) If the Corporation's registration under the Securities Act,
covering its initial underwritten public offering of stock had been
declared effective by the Commission, then the fair market value of a share
of Common Stock as of the last Business Day immediately prior to the
Exercise Date.
(ii) If such a registration statement has not been declared effective,
or if it has been declared effective but the offering is not consummated in
accordance with the terms of
the underwriting agreement between the Corporation and its underwriters
relating to such registration statement, then as determined in good faith
by the Board upon review of the relevant factors; provided, however, that
if the Exercise Date falls within one day prior to the effective date of
such registration statement, the fair market value of a share of Common
Stock will be deemed to be the public offering price per share provided for
in such registration statement.
(d) Mechanics. The Corporation shall as promptly as practicable and
---------
in any event within three days after delivery of a Subscription Notice as
described above, execute and deliver or cause to be executed and delivered,
in accordance with such Subscription Notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in
said Subscription Notice. The share certificate or certificates so
delivered shall be in such denominations as may be specified in such
Subscription Notice or, if such Subscription Notice shall not specify
denominations, in denominations of 100 shares each, and shall be issued in
the name of the Holder or such other name or names as shall be designated
in such Subscription Notice. Such certificate or certificates shall be
deemed, to have been issued (and this Warrant or the portion thereof
specified in the Subscription Notice shall be deemed to have been
exercised) and such Holder or any other Person so designated to be named
therein shall be deemed for all purposes to have become a holder of record
of such shares, as of the date the aforementioned Subscription Notice is
received by the Corporation, or delivery thereof is refused (the "EXERCISE
DATE"). If this Warrant shall have been exercised only in part, the
Corporation shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing the rights to
purchase or convert the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with
this Warrant, or, at the request of the Holder, appropriate notation may be
made on this Warrant which shall then be returned to the Holder. The
Corporation shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of share
certificates and new Warrants, except that, if share certificates or new
Warrants shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a result of
such transfer shall be paid by the Holder at the time of delivering the
aforementioned notice of exercise or promptly upon receipt of a written
request of the Corporation for payment.
1.2 Shares to Be Fully Paid and Nonassessable. All shares of Common Stock
-----------------------------------------
issued upon the exercise of this Warrant shall be validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder, and from
all taxes, liens and charges with respect to the issue thereof (other than
transfer taxes) and, if the Common Stock is then listed on any national
securities exchanges (as defined in the Exchange Act) or quoted on NASDAQ, shall
be duly listed or quoted thereon, as the case may be.
- 2 -
1.3 No Fractional Shares to Be Issued. The Corporation shall, not be
---------------------------------
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the
Corporation may pay to the Holder, in cash, an amount equal to such share of
fraction of the fair market value (as determined in good faith by the Board) per
share of outstanding Common Stock of the Corporation in the Business Day
immediately prior to the date of such exercise.
1.4 Share Legends. Each certificate for shares of Common Stock issued
-------------
upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
"This security has not been registered under the Securities Act of
1933 and may not be sold or offered for sale unless registered pursuant to
such Act or unless the holder hereof delivers to Blue Rhino Corporation an
opinion of counsel reasonably acceptable to Blue Rhino Corporation stating
that an exemption from such registration is available."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the holder of such certificate (who may be an employee of such
holder) and reasonably acceptable to the Corporation, the securities represented
thereby need no longer be subject to restrictions on resale under the Securities
Act. Each certificate for shares of Common Stock issued upon exercise of this
Warrant shall also bear any legends required under the Shareholders' Agreement,
to the extent required thereby. Any certificate issued at any time in exchange
or substitution for any certificate bearing such legend shall also bear such
legend unless in the opinion of counsel selected by the holder of such
certificate (who may be an employee of such holder) and reasonably acceptable to
the Corporation, the restrictions contained in such Shareholders' Agreement no
longer apply because of the occurrence of one or more of certain events
described therein.
1.5 Reservation; Authorization. The Corporation has reserved and will
--------------------------
keep available for issuance upon exercise of the Warrants the total number of
shares of Common Stock deliverable upon exercise of all Warrants from time to
time outstanding. The issuance of the shares of Common Stock upon exercise of
the Warrants has been duly and validly authorized and, when issued and sold in
accordance with the Warrants, such shares of Common Stock will be duly and
validly issued, fully paid and nonassessable. The Corporation will take all
such actions as are necessary in order to insure the foregoing.
1.6 Result of Exercise. On the Exercise Date the rights of the holder of
------------------
such Warrant as such holder will cease and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock are to be
issued upon such exercise will be deemed to have become the holder or holders of
record of the shares of Common Stock represented thereby.
- 3 -
1.7 Not Close Books Until Exercise. The Corporation will not close its
------------------------------
books against the transfer of this Warrant or shares of Common Stock issued or
issuable upon exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
ARTICLE II
TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS
2.1 Ownership of Warrant. The Corporation may deem and treat the Person
--------------------
in whose name this Warrant is registered as the holder and owner hereof for all
purposes and shall not be affected by any notice to the contrary, until this
Warrant is presented for registration of transfer as provided in this Article
II.
2.2 Transfer of Warrant. The Corporation agrees to maintain books for the
-------------------
registration of transfers of the Warrants, and any transfer, in whole or in
part, of this Warrant and all rights hereunder shall be registered on such
books, upon surrender of this Warrant at the principal office of the Corporation
together with a written assignment of this Warrant duly executed by the Holder
or his, her or its duly authorized agent or attorney and funds sufficient to pay
any transfer taxes payable upon such transfer. Upon surrender the Corporation
shall execute and deliver a new Warrant or Warrants in the name of the assignee
or assignees and in the denominations specified in the instrument of assignment,
and this Warrant shall promptly be canceled. Notwithstanding the foregoing, a
Warrant may be exercised by a new holder without having a new Warrant issued.
This Warrant may not be transferred in whole or in part, and the Corporation
shall not be required to register any transfers unless the Corporation has
received an opinion of counsel selected by the transferor (who may be an
employee of such party) and reasonably satisfactory to the Corporation that such
transfer is exempt from the registration requirements of the Securities Act.
If the Warrantholder delivers to the Corporation an opinion of counsel
selected by such holder (who may be an employee of such holder) and reasonably
acceptable to the Corporation, that no subsequent transfer of the Warrant will
require registration under the Securities Act, the Corporation will promptly
deliver to such holder or his, her or its designee, new Warrants in exchange for
the Warrant delivered by such holder, which will not bear the Securities Act
legend set forth at the beginning of the first page of the Warrant, and
thereafter no further opinions of counsel shall be required in connection with
the subsequent transfer of such Warrant.
2.3 Division or Combination of Warrants. This Warrant may be divided or
-----------------------------------
combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Corporation, together
with a written notice specifying the names and denominations in which the new
Warrant or Warrants are to be issued, signed by the holders hereof and thereof
or their respective duly authorized agents or attorneys. Subject to compliance
with Section 2.2 as to any transfer which may be involved in the division or
combination, the Corporation
- 4 -
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.
2.4 Loss, Theft, Destruction of Warrant Certificates. Upon receipt of
------------------------------------------------
evidence reasonably satisfactory to the Corporation (an affidavit of the
registered holder will be satisfactory) of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Corporation (an Original Warrantholder's indemnity being satisfactory
indemnity in the event of loss, theft or destruction of any Warrant owned by
such holder), or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Corporation will (at its expense) make and
deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the same aggregate
number of shares of Common Stock.
2.5 Expenses of Delivery of Warrants. The Corporation shall pay all
--------------------------------
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants and Warrant
Stock hereunder. If, pursuant to Section 2.2, the opinion of counsel provides
that registration is not required for the proposed exercise or transfer of this
Warrant or the proposed transfer of the Warrant Stock and that the proposed
exercise or transfer in the absence of registration would require the
Corporation to take any action including executing and filing forms or other
documents with the Commission or any state securities agency, or delivering to
the Warrantholder any form or document in order to establish the right of the
Warrantholder to effectuate the proposed exercise or transfer, the Corporation
agrees promptly, at its expense, to take any such action; and provided, further,
that the Corporation will reimburse the Warrantholder in full for any expenses
(including but not limited to the fees and disbursements of such counsel, but
excluding brokers' commissions) incurred by the Warrantholder or owner of
Warrant Stock on his, her or its behalf in connection with such exercise or
transfer of the Warrant or transfer of Warrant Stock.
ARTICLE III
CERTAIN RIGHTS
3.1 Rights Under Securities Purchase Agreement, Registration Agreement and
----------------------------------------------------------------------
Shareholders' Agreement. This Warrant and the Warrant Stock are entitled to the
-----------------------
benefits of and are subject to the Securities Purchase Agreement, Registration
Agreement and the Shareholders' Agreement to the extent provided therein. The
Corporation shall keep a copy of the Securities Purchase Agreement, Registration
Agreement, the Shareholders' Agreement, and any amendments, restatements,
modifications and supplements thereto, at the principal office of the
Corporation and shall furnish copies thereof to any Holder or any transferee
upon request.
- 5 -
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1 Adjustments Generally. The Exercise Price and the number of shares of
---------------------
Common Stock (or other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events, as provided in this Article IV.
4.2 Exercise of Warrant. At any time and from time to time, any holder of
-------------------
this Warrant may exercise all or any portion of this Warrant into the number of
shares of Common Stock computed by (i) multiplying the number of shares of
Common Stock sought to be purchased pursuant to this Warrant by $0.0347037 and
(ii) dividing the resulting product by the Exercise Price then in effect.
4.3 Exercise Price.
--------------
(a) Exercise Price Based on Conversion Price. The "EXERCISE PRICE"
----------------------------------------
shall be one-tenth of the Conversion Price then in effect pursuant to the
Certificate of Incorporation of the Corporation. In order to prevent dilution
of the exercise rights granted to the holder of this Warrant, the Conversion
Price and consequently the Exercise Price will be subject to adjustment from
time to time pursuant to this Section 4.3 and Sections 4.5 and 4.6 below. For
purposes of this Section 4.3, the Corporation shall be deemed to have issued or
sold Common Stock as set forth in Section 4.4 below.
(b) Adjustment for Dilutive Events. If and whenever on or after the
------------------------------
original date of issuance of this Warrant the Corporation issues or sells, or in
accordance with Section 4.4 below is deemed to have issued or sold, any shares
of Common Stock for consideration per share less than the Conversion Price (the
"DILUTED SHARE PRICE") in effect immediately prior to the time of such issue or
sale (a "DILUTIVE EVENT"), then forthwith upon the occurrence of any such
Dilutive Event the Conversion Price will be reduced so that the Conversion Price
in effect immediately following the Dilutive Event will equal the Diluted Share
Price. Notwithstanding the foregoing, the issuance by the Corporation of up to
2,000,000 shares of Common Stock, or securities convertible into or options to
acquire up to 2,000,000 shares of Common Stock, issued pursuant to stock option
plans or grants to officers or employees approved by the Board or the issuance
of Common Stock upon conversion of the Series A Preferred Shares issued pursuant
to the Securities Purchase Agreement shall not constitute a Dilutive Event. As
used in this Section 4.3(b) and in Section 4.4 below, the term "COMMON STOCK"
shall include Common Stock Equivalents. Notwithstanding anything contained
herein to the contrary, the Exercise Price of this Warrant held by a particular
holder shall not be adjusted pursuant to this Article 4 in connection with a
particular Dilutive Event, or any subsequent Dilutive Event, if such holder of
this Warrant fails to purchase, after being offered by the Corporation the
opportunity to purchase, a percentage of the securities, rights or options, or
any
- 6 -
combination thereof, the sale of which constitute the Dilutive Event, which is
equal to or greater than 75 % of the percentage ownership of the Corporation's
Common Stock on a fully diluted basis held by such holder immediately prior to
such Dilutive Event. A Warrant which is no longer subject to adjustment as a
result of the preceding sentence shall remain subject to such limitation
regardless of any subsequent transfers, and at each time that any Warrant so
loses its rights to such adjustment, all Warrants which have lost their right to
such adjustment as of such time shall be automatically classified into (and the
outstanding Warrant representing such Warrant will automatically be deemed to
represent) new sub-series X-0, X-0, X-0, etc. , consecutively, beginning with X-
0. The holders of Warrants of each such sub-series shall promptly deliver such
Warrants to the Corporation upon the Corporation's request, for exchange or
notation to reflect such sub-series. If any such Warrants are not delivered to
the Corporation, the Corporation shall make appropriate notations on its stock
records, which may include stop transfer instructions, and may place in escrow,
pending receipt of such Warrants, all dividend payments or other distributions
owing with respect to the Warrants represented by such Warrants.
4.4 Issuance and Sale of Common Stock. For purposes of determining the
---------------------------------
adjusted Exercise Price pursuant to Sections 4.3 above the following events
shall be deemed to be an issuance and sale of Common Stock by the Corporation:
(a) Issuance of Rights or Options. If (i) the Corporation in any
-----------------------------
manner grants any rights or options to subscribe for or to purchase shares of
Common Stock or any securities convertible into or exchangeable for shares of
Common Stock (such rights or options referred to herein as "OPTIONS" and such
convertible or exchangeable stock or securities referred to herein as
"CONVERTIBLE SECURITIES") and (ii) the Price Per Share of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities is less than the Conversion Price in effect
immediately prior to the time of the granting of such Options then the shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities will be deemed to have been issued and
sold by the Corporation for such Price Per Share. For the purposes of this
Section 4.4(a), the "PRICE PER SHARE" is determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon exercise of all such Options, plus
in the case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to the Corporation
upon the issuance or sale of such Convertible Securities and the conversion or
exchange thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Conversion Price will be made when Convertible
Securities are actually issued upon the exercise of such Options or when Common
Stock is actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
- 7 -
(b) Issuance of Convertible Securities. If (i) the Corporation in any
----------------------------------
manner issues or sells any Convertible Securities and (ii) the Price Per Share
of shares of Common Stock issuable upon such conversion or exchange is less than
the Conversion Price in effect immediately prior to the time of such issue or
sale then the shares of Common Stock issuable upon the conversion or exchange of
such Convertible Securities will be deemed to have been issued and sold by the
Corporation for such Price Per Share. For the purposes of this Section 4.4(b),
the "PRICE PER SHARE" will be determined by dividing (i) the total amount
received or receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price will be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments to the Conversion Price had been
or are to be made pursuant to Section 4.4(a) above, no further adjustment of the
Conversion Price will be made by reason of such issue or sale.
(c) Change in Option Price or Conversion Price. If at any time there
------------------------------------------
is a change in (i) the purchase price provided for in any Options, (ii) the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities, or (iii) the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock, then the Conversion Price
in effect at the time of such change will be readjusted to the Conversion Price
which would have been in effect had those Options or Convertible Securities
still outstanding at the time of such change provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time such Options or Convertible Securities were initially granted,
issued or sold; provided that if such adjustment would result in an increase of
the Conversion Price then in effect, such adjustment will not be effective until
30 days after written notice thereof has been given by the Corporation to all
holders of Warrants.
(d) Calculation of Consideration Received. If any shares of Common
-------------------------------------
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor or the Price Per
Share, as the case may be, will be deemed to be the net amount received or to be
received, respectively, by the Corporation therefor. In case any shares of
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Corporation or the non-cash portion of the Price Per Share, as
the case may be, will be the fair value of such consideration received or to be
received, respectively, by the Corporation; except where such consideration
consists of securities, in which case the amount of consideration received or to
be received, respectively, by the Corporation will be the Market Price thereof
as of the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued in connection with any merger in which the
Corporation is the surviving corporation, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving
- 8 -
corporation as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash and securities will be determined jointly by the Corporation and
the holders of a majority of the outstanding Warrants. If such parties are
unable to reach agreement within a reasonable period of time, the fair value of
such consideration will be determined by an independent appraiser jointly
selected by the Corporation and the holders of a majority of the outstanding
Warrants.
(e) Integrated Transactions. In case any Option is issued in
-----------------------
connection with the issuance or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
will be deemed to have been issued for a consideration of $.01.
(f) Record Date. If the Corporation takes a record of the holders of
-----------
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (ii) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issuance or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
4.5 Subdivision or Combination of Common Stock. If the Corporation at any
------------------------------------------
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision will be proportionately reduced. If the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased.
4.6 Organic Change. Prior to the consummation of any Organic Change, the
--------------
Corporation will make appropriate provisions (in form and substance satisfactory
to the holders of a majority of the Warrants then outstanding) to insure that
each of the holders of Warrants with respect to all or any of the Warrants held
thereby will thereafter have the right to acquire and receive, in lieu of or in
addition to the shares of Common Stock immediately theretofore acquirable and
receivable upon the exercise of such holder's Warrants, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had exercised his, her or its Warrants immediately
prior to such Organic Change. In any such case, the Corporation will make
appropriate provisions (in form and substance satisfactory to the holders of a
majority of the Warrants then outstanding) to insure that the provisions of this
Section 4.6 will thereafter be applicable to the Warrants (including, an
immediate adjustment of the Conversion Price to the value for the Common Stock
reflected by the terms of such Organic Change and a corresponding immediate
adjustment in the number of shares of Common Stock acquirable and receivable
upon exercise of the Warrants, if the value so reflected is less than the
Conversion Price in effect
- 9 -
immediately prior to such Organic Change). The Corporation will not effect any
such Organic Change, unless prior to the consummation thereof, the successor
Corporation resulting from such Organic Change assumes by written instrument (in
form reasonably satisfactory to the holders of a majority of the Warrants then
outstanding), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
All other terms of the Warrants shall remain in full force and effect
following such an Organic Change. The provisions of this Section 4.6 shall
similarly apply to successive Organic Changes.
4.7 Notices.
-------
(a) Immediately upon any adjustment of the Exercise Price, the
Corporation shall give written notice thereof to all holders of Warrants
specifying the Exercise Price in effect thereafter with respect to the
particular holder.
(b) The Corporation shall give written notice to all holders of
Warrants at least 20 days prior to the date on which the Corporation closes its
books or takes a record for determining rights to vote with respect to any
Organic Change, Change in Control, Change of Ownership, Fundamental Change or
other reorganization, dissolution or liquidation. The Corporation shall also
give written notice to the holders of Warrants at least 20 days prior to the
date on which any Organic Change, Change in Control, Change of Ownership,
Fundamental Change or other reorganization, dissolution or liquidation shall
occur.
4.8 Certain Other Events. The Company will not, by amendment of its
--------------------
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issues or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrantholders
against dilution or other impairment. If any event occurs as to which the
foregoing provisions of this Article IV are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
protect the purchase rights of the Warrants in accordance with the essential
intent and principles of such provisions, then the Board shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board, to protect such purchase rights as aforesaid, but in
no event shall any such adjustment have the effect of increasing the Exercise
Price or decreasing the number of shares of Common Stock subject to purchase
upon exercise of this Warrant.
- 10 -
4.9 Proceedings Prior to Any Action Requiring Adjustment As a condition
----------------------------------------------------
precedent to the taking of any action which would require an adjustment pursuant
to this Article IV, the Corporation shall take any action which may be
necessary, including obtaining regulatory approvals or exemptions, in order that
the Corporation may thereafter validly and legally issue as fully paid and
nonassessable all shares of Common Stock which the holders of Warrants are
entitled to receive upon exercise thereof, and if all such approvals and actions
are not taken, the Corporation shall take any action which would cause the
Corporation to be able to issue to the holders of Warrants the full number of
shares issuable upon exercise hereof in accordance with the terms hereof.
ARTICLE V
LIQUIDATION, DISSOLUTION, DISTRIBUTIONS OR DIVIDENDS
5.1 Liquidation or Dissolution. In case the Corporation at any time while
--------------------------
this Warrant shall remain unexpired and unexercised, shall dissolve, liquidate,
or wind up its affairs other than in connection with an Organic Change, the
Holder shall have the right to exercise this Warrant for a period of sixty (60)
days after the later of (i) such event having occurred and (ii) receipt by the
Holder of a notice from the Company indicating the kind and amount of securities
or assets issuable or distributable to holders of shares of Common Stock with
respect to such event, and upon exercise of this Warrant during such period, the
Holder shall have the right to receive in lieu of each share of the Warrant
Stock, the same kind and amount of any securities or assets as may be issuable,
distributable, or payable upon any such dissolution, liquidation, or winding up
with respect to each of the shares of the Common Stock.
5.2 Dividends and Distributions With Respect to Common Stock. If legal
--------------------------------------------------------
under the applicable General Corporation Law of the State of Delaware at any
time the Corporation pays any dividends or makes any other distributions with
respect to the Common Stock, the Corporation shall pay at such time to each
holder of a Warrant the dividends or other distributions which such holder would
have been entitled to receive had such holder exercised all of his, her or its
rights to acquire or receive Common Stock under such Warrant(s) on the date as
of which the holders of Common Stock of record entitled to such dividends or
other distributions were determined.
ARTICLE VI
DEFINITIONS
Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Securities Purchase Agreement. The following
terms, as used in this Warrant, have the following respective meanings:
- 11 -
"BOARD" means the Corporation's Board of Directors.
"BUSINESS DAY" shall mean (a) if any class of Common Stock is listed or
admitted to trading on a national securities exchange, a day on which the
principal national securities exchange on which such class of Common Stock is
listed or admitted to trading is open for business or (b) if no class of Common
Stock is so listed or admitted to trading, a day on which any New York Stock
Exchange member firm is open for business.
"CHANGE IN OWNERSHIP" means any sale or issuance or series of sales and/or
issuances of shares of the Corporation's capital stock by the Corporation or any
holders thereof which results in any Person or group of affiliated Persons
(other than the holders of Common Stock and Series A Securities as of the date
of the Securities Purchase Agreement) owning capital stock of the Corporation
possessing the voting power (under ordinary circumstances) to elect a majority
of the Board.
"CHANGE OF CONTROL" means any transaction, circumstance or event that shall
cause or result in Xxxxx Xxxx and Xxxxxx Xxxxxxxxxx either (a) owning, directly
or indirectly, beneficial or record ownership of shares of the Corporation's
capital stock or securities having less than 20% of the issued and outstanding
shares of the Corporation entitled to vote on matters submitted to the
Corporation's shareholders, or (b) resigning or being removed or otherwise not
serving as a member of the Board.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK EQUIVALENT" means, collectively, any capital stock of any
class of the Corporation hereafter authorized which is not limited to a fixed
sum or percentage of par or stated value in respect to the rights of the holders
thereof to participate in dividends or in the distribution of assets upon any
liquidation, dissolution or winding up of the Corporation or similar equity like
participation rights or phantom stock interests but specifically excludes the
Warrants.
"FUNDAMENTAL CHANGE" means (a) a sale or transfer of all or substantially
all of the assets of the Corporation, or of the Corporation and its Subsidiaries
on a consolidated basis, in any transaction or series of transactions, and (b)
any merger or consolidation to which the Corporation is a party, except for a
merger in which the Corporation is the surviving Corporation and, after giving
effect to such merger, the holders of the Corporation's outstanding capital
stock immediately prior to the merger shall own the Corporation's outstanding
capital stock possessing the voting power (under ordinary circumstances) to
elect a majority of the Board after such merger.
"HOLDER" means the Person in whose name this Warrant is registered on the
books of the Corporation maintained for such purpose or the Person in whose name
any Warrant Stock is registered on such books.
- 12 -
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"ORGANIC CHANGE" means any capital reorganization, reclassification,
consolidation, merger, lease, or sale of all or substantially all of the
Corporation's assets to another Person (other than a dissolution, liquidation or
winding up of the Company as indicated in Section 5.1 above) which is effected
in such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for shares of Common Stock.
"ORIGINAL WARRANTHOLDER" means Platinum or any Investor holding a Warrant.
"MARKET PRICE" of any security means the average of the closing prices of
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on the primary
exchange on which such security is listed at the end of such day, or, if on any
day such security is not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if
on any day such security is not quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a period of 21
days consisting of the day as of which "MARKET PRICE" is being determined and
the 20 consecutive business days prior to such day. The "MARKET PRICE" of a
note or other obligation which is not listed on a securities exchange or quoted
in the NASDAQ System or reported by the National Quotation Bureau, Incorporated,
the total consideration received by the Corporation (including interest) will be
discounted at the prime rate of interest at the First National Bank of Chicago
in effect at the time the note or obligation is deemed to have been issued. If
at any other time such security is not listed on any securities exchange or
quoted in the NASDAQ System or the over-the-counter market, the "MARKET PRICE"
will be the fair value thereof determined jointly by the Corporation and the
holders of a majority of the Warrants. If such parties are unable to reach
agreement within a reasonable period of time, such fair value will be determined
by an independent appraiser jointly selected by the Corporation and the holders
of a majority of the Warrants.
"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"PLATINUM" means Platinum Venture Partners 1, L.P., a Delaware limited
partnership.
"REGISTRATION AGREEMENT" means the Registration Rights Agreement, of even
date herewith, by and among the Corporation, Platinum and the Investors (as
defined in the Registration
- 13 -
Agreement), as such agreement may be amended, restated, modified or
supplemented from time to time in accordance with its terms.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES PURCHASE AGREEMENT" means the Series A Securities Purchase
Agreement, of even date herewith, by and among the Corporation, Platinum and the
Investors (as defined in the Securities Purchase Agreement), as such agreement
may be amended, restated, modified or supplemented from time to time in
accordance with its terms.
"SHAREHOLDERS' AGREEMENT" means the Shareholders' Agreement, of even date
herewith, by and among the Corporation, the Investors (as defined in the
Shareholders' Agreement) and the Management Stockholders (as defined in the
Shareholders' Agreement), as such agreement may be amended, restated, modified
or supplemented from time to time in accordance with its terms.
"SUBSIDIARY" means any corporation, association or other business entity of
which securities or other ownership interests representing more than fifty
percent (50%) of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Corporation or one or
more Subsidiaries of the Corporation or by the Corporation and one or more
Subsidiaries of the Corporation.
"VOTING STOCK" of any Person means securities of any class or classes of
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors of such Person.
"WARRANTHOLDER" means a Holder of a Warrant.
"WARRANTS" shall have the meaning set forth in the second paragraph of this
Warrant.
"WARRANT STOCK" means the shares of Common Stock purchased by the
Warrantholders upon the exercise of the Warrants, including any such shares of
Common Stock transferred to any transferee of such Warrantholder, other than a
transferee who acquires such shares after the same have been publicly sold
pursuant to a Registration Statement under the Securities Act.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. Notices and other communications provided for herein shall
-------
be in writing and shall, unless otherwise expressly required, be given in the
manner and with the effect provided in the Securities Purchase Agreement. In
the case of the Holder, such notices and communications
- 14 -
shall be addressed to his, her or its address as shown on the books maintained
by the Corporation, unless the Holder shall notify the Corporation that notices
and communications should be sent to a different address (or telecopy number),
in which case such notices and communications shall be sent to the address (or
telecopy number) specified by the Holder.
7.2 Waivers; Amendments. No failure or delay of the Holder in exercising
-------------------
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may
be amended, modified or waived with (and only with) the written consent of the
Corporation and the Warrantholders voting as a single class, entitling such
Warrantholders to purchase a majority of the Common Stock subject to purchase
upon exercise of such Warrants at the time outstanding (exclusive of Warrants
then owned by the Corporation or any Subsidiary or Affiliate thereof); provided,
however, that no such amendment, modification or waiver shall, without the
written consent of each holder of Warrants whose interest might be adversely
affected by such amendment, modification or waiver, (a) change the number of
shares of Common Stock subject to purchase upon exercise of this Warrant, the
Exercise Price or provisions for payment thereof or (b) amend, modify or waive
the provisions of this Section or Article III, IV or V hereof. The provisions
of the Securities Purchase Agreement, the Shareholders' Agreement and the
Registration Agreement may be amended, modified or waived only in accordance
with the respective provisions thereof.
Any such amendment, modification or waiver effected pursuant to this
Section or the applicable provisions of the Securities Purchase Agreement, the
Shareholders' Agreement or the Registration Agreement shall be binding upon the
holders of all Warrants and Warrant Stock, upon each future holder thereof and
upon the Corporation. In the event of any such amendment, modification or
waiver, the Corporation shall give prompt notice thereof to all Warrantholders
and, if appropriate, notation thereof shall be made on all Warrants thereafter
surrendered for registration of transfer or exchange.
No notice or demand on the Corporation in any case shall entitle the
Corporation to any other or further notice or demand in similar or other
circumstances.
7.3 Governing Law. This Warrant shall be construed in accordance with and
-------------
governed by the internal laws of the State of Delaware, without regard to
principles of conflicts of laws.
7.4 Survival of Agreements; Representations and Warranties, etc. All
-----------------------------------------------------------
warranties, representations and covenants made by the Corporation herein or in
any certificate or other instrument delivered by or on behalf of it in
connection with the Warrants shall be considered to have been relied upon by the
Holder and shall survive the issuance and delivery of the Warrants, regardless
of any investigation made by the Holder, and shall continue in full force and
effect so long
- 15 -
as this Warrant or any Warrant Stock is outstanding. All statements in any such
certificate or other instrument shall constitute representations and warranties
hereunder.
7.5 Covenants to Bind Successor and Assigns. All covenants, stipulations,
---------------------------------------
promises and agreements in this Warrant contained by or on behalf of the
Corporation shall bind its successors and assigns, whether so expressed or not.
7.6 Severability. In case any one or more of the provisions contained in
------------
the Securities Purchase Agreement, the Shareholders' Agreement, the Registration
Agreement or this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby.
7.7 Section Headings. The section headings used herein are for
----------------
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
7.8 No Rights as Stockholder. This Warrant shall not entitle the
------------------------
Warrantholder to any rights as a stockholder of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, and its
corporate seal to be hereunto affixed, attested by its Secretary or an Assistant
Secretary, all as of the day and year first above written.
Blue Rhino Corporation, a Delaware corporation
By:___________________________________________
Xxxxx Xxxx, Chief Executive Officer
Attest:
_______________________________________
X.X. Xxxxxxxx, III, Assistant Secretary
- 16 -
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To___________________:
[Choose one or both of first two paragraphs, as applicable]
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Warrant for, and to purchase thereunder, ___________
shares of Common Stock, as provided for therein, and tenders herewith payment
of the Exercise Price in full in the form of certified or bank cashier's check
or wire transfer.
The undersigned hereby irrevocably elects to exercise the right of
conversion represented by the attached Warrant for, and to convert thereunder,
_______________ shares of Common Stock, as provided for therein.
Please issue a certificate or certificates for such shares of Common Stock
in the following name or names and denominations:
If said number of shares shall riot be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated: ______________, 19__
_________________________________________________
_________________________
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 below.
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ______________________________________ hereby sells,
assigns and transfers unto the attached Warrant, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_______________________ attorney to transfer said Warrant on the books of Blue
Rhino Corporation, with full power of substitution in the premises.
________________________________________________
___________________________
NOTE: The above signature should correspond
exactly with the name on the face of the attached
Warrant.
Dated:
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BLUE RHINO CORPORATION
(Incorporated 11/29/94)
FIRST: The name of the Corporation is Blue Rhino Corporation (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx of New Castle. The
name of the registered agent of the Corporation at such address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares which the Corporation shall have
authority to issue is 85,296,172 which are divided into two classes as follows:
(a) 20,796,172 shares of Series A Convertible Participating Preferred
Stock, $0.001 par value per share (the "Series A Preferred" and shares of Series
A Preferred the "Series A Preferred Shares"); and
(b) 64,500,000 shares of common stock of the Corporation, $0.001 par value
per share (the "Common Stock").
The powers, preferences and relative, participating, optional or other
rights of the capital stock and the qualifications, limitations or restrictions
thereof are as follows:
PART A. TERMS APPLICABLE TO SERIES A PREFERRED
Section 1. Liquidation.
1.1 Preference.
----------
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of Series A Preferred will be
entitled to be paid, before any distribution or payment is made upon any Common
Stock, an amount in cash equal to the aggregate Liquidation Value of all shares
of Series A Preferred outstanding. If upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the assets
available for distribution to the shareholders of the Corporation (the
"Distributable Funds") shall be insufficient to permit the payment to the
holders of Series A Preferred Shares of the
aforesaid full preferential amount, then the Distributable Funds shall be
distributed to the holders of Series A Preferred Shares, ratably in proportion
to the number of Series A Preferred Shares held by each such holder on the date
of liquidation, dissolution or winding up of the Corporation.
(b) After the payment or the setting aside for such payment of the
preferential amounts payable pursuant to the preceding paragraph, the holders of
the Series A Preferred Shares shall be entitled to receive a ratable portion of
all of the remaining assets of the Corporation (together with the holders of the
Common Stock), if any, based upon the number (including any fraction) of shares
of Common Stock into which the Series A Preferred Shares then held by such
holders are then convertible.
(c) The Corporation will mail written notice of such liquidation,
dissolution or winding up, not less than 60 days prior to the payment date
stated therein, to each record holder of Series A Preferred.
1.2 Other Liquidation Events. A Change of Control, Change in Ownership
------------------------
(as hereinafter defined), Fundamental Change (as hereinafter defined) or other
reorganization in which the stockholders of the Corporation immediately prior to
the transaction possess less than 50% of the voting power of the surviving
entity (or its parent) immediately after the transaction shall be deemed to be a
liquidation for purposes of Section 1.1 above, unless the holders of a majority
of the Series A Preferred Shares outstanding elect by written notice to the
Corporation that such Change in Control, Change of Ownership, Fundamental Change
or other reorganization shall not be deemed a liquidation. The term "Change in
Ownership" means any sale or issuance or series of sales and/or issuances of
shares of the Corporation's capital stock by the Corporation or any holders
thereof which results in any Person or group of affiliated Persons (other than
the holders of Common Stock and Series A Preferred Shares as of the date of the
Securities Purchase Agreement) owning capital stock of the Corporation
possessing the voting power (under ordinary circumstances) to elect a majority
of the Board. The term "Fundamental Change" means (a) a sale or transfer of all
or substantially all of the assets of the Corporation, or of the Corporation and
its Subsidiaries on a consolidated basis, in any transaction or series of
transactions, and (b) any merger or consolidation to which the Corporation is a
party, except for a merger in which the Corporation is the surviving Corporation
and, after giving effect to such merger, the holders of the Corporation's
outstanding capital stock immediately prior to the merger shall own the
Corporation's outstanding capital stock possessing the voting power (under
ordinary circumstances) to elect a majority of the Board after such merger.
Nothing contained in this Section 1.2 shall be deemed to prevent any holder
of Series A Preferred Shares from (i) exercising such holder's right of
conversion pursuant to Section 4.1 hereof, with respect to any share of Series A
Preferred at any time prior to the liquidation, including following the giving
of any notice of such liquidation, or (ii) as a holder of Series A Preferred
Shares, participating in, or being a party to, the reorganization or the
transaction in which a Change in Control, Change of Ownership, Fundamental
Change or other reorganization
- 2 -
shall occur, as described in this Section 1.2.
Section 2. Dividends.
2.1 General Obligation. When and as declared by the Board and to the
------------------
extent legally permissible, the Corporation will pay preferential dividends as
provided in this Section 2 to the holders of the Series A Preferred. Except as
otherwise provided herein, dividends on each Series A Preferred Share will
accumulate cumulatively on a daily basis at the rate of 8% per annum of the
Liquidation Value thereof, from and including the date of issuance of such
Series A Preferred Share. Such dividends will accumulate whether or not they
have been declared and whether or not there are profits, surplus or other funds
of the Corporation legally available for the payment of dividends. The date on
which the Corporation Initially issues any Series A Preferred Share will be
deemed to be its "date of issuance" regardless of the number of times transfer
of such Series A Preferred Share is made on the stock records maintained by or
for the Corporation and regardless of the number of certificates which may be
issued to evidence such Series A Preferred Share.
2.2 Distribution of Partial Dividend Payments. If at any time the
-----------------------------------------
Corporation declares less than the total amount of dividends then accumulated
with respect to the Series A Preferred, such dividends will be payable to the
holders of the Series A Preferred, ratably in proportion to the number of Series
A Preferred Shares held by each such holder on the date such dividends were
declared.
2.3 Dividends With Respect to Common Stock. If at any time the
--------------------------------------
Corporation pays any dividends or makes any other distributions with respect to
the Common Stock, the Corporation shall pay at such time to each holder of
Series A Preferred the dividends or other distributions which such holder would
have been entitled to receive had such holder converted all of his, her or its
Series A Preferred Shares into Common Stock on the date as of which the holders
of Common Stock of record entitled to such dividends or other distributions were
determined.
Section 3. Voting Rights. The Series A Preferred shall have those voting
rights set forth for the Series A Preferred in Part C below.
Section 4. Conversion.
4.1 Conversion Procedure.
--------------------
(a) At any time and from time to time, any holder of Series A
Preferred may convert all or any portion of the Series A Preferred Shares
(including any fraction of a share) held by such holder into the number of
shares of Common Stock computed by (i) multiplying the number of Series A
Preferred Shares to be converted by $0.347037 and (ii) dividing the resulting
- 3 -
product by the Conversion Price then in effect.
(b) Each conversion of Series A Preferred Shares will be deemed to
have been effected as of the close of business on the date on which the
certificate or certificates representing the Series A Preferred Shares to be
converted have been surrendered at the principal office of the Corporation. At
such time as such conversion has been effected, the rights of the holder of such
Series A Preferred Shares as such holder will cease and the Person or Persons in
whose name or names any certificate or certificates for shares of Common Stock
are to be issued upon such conversion will be deemed to have become the holder
or holders of record of the shares of Common Stock represented thereby.
(c) As soon as possible after a conversion has been effected (but in
any event within 10 business days in the case of Section 4.1(c)(i) below), the
Corporation will deliver to the converting holder:
(i) a certificate or certificates representing the number of
shares of Common Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
(ii) payment in an amount equal to the amount payable under
Section 4.1(f) below with respect to such conversion; and
(iii) a certificate representing any Series A Preferred Shares
which were represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which were not
converted.
(d) The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Shares will be made without charge to the
holders of such Series A Preferred Shares for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock. Upon conversion
of each Series A Preferred Share, the Corporation will take all such actions as
are necessary in order to insure that the Common Stock issuable with respect to
such conversion will be validly issued, fully paid and nonassessable.
(e) The Corporation will not close its books against the transfer of
Series A Preferred Shares or shares of Common Stock issued or issuable upon
conversion of Series A Preferred Shares in any manner which interferes with the
timely conversion of Series A Preferred Shares.
(f) If any fractional interest in a share of Common Stock would,
except for the provisions of this Section 4.1(f), be deliverable upon any
conversion of the Series A Preferred
- 4 -
Shares, the Corporation, in lieu of delivering the fractional share therefor,
may pay an amount to the holder thereof equal to the fair market value (as
determined by the Board) of such fractional interest as of the date of
conversion.
4.2 Conversion Price.
----------------
(a) Initial Conversion Price. The initial Conversion Price will be
------------------------
determined by the following formula:
$ 8,000,000 - .067/.933 (PI)
----------------------------
$20,060,000(l +.067/.933)
Where
PI = The total dollar amount invested in Series A Preferred Shares
pursuant to the Securities Purchase Agreement.
By way of illustration, in the event PI equal $7,500,000 the
initial Conversion Price will be approximately $0.347.
In order to prevent dilution of the conversion rights granted to holders of
Series A Preferred hereunder, the Conversion Price will be subject to adjustment
from time to time pursuant to this Section 4.2 and Sections 4.4 and 4.5 below.
For purposes of this Section 4.2, the Corporation shall be deemed to have issued
or sold Common Stock as set forth in Section 4.3 below.
(b) Adjustment for Dilutive Events. If and whenever on or after the
------------------------------
original date of issuance of the Series A Preferred the Corporation issues or
sells, or in accordance with Section 4.3 below is deemed to have issued or sold,
any shares of Common Stock for consideration per share less than the Conversion
Price (the "Diluted Share Price") in effect immediately prior to the time of
such issue or sale (a "Dilutive Event"), then forthwith upon the occurrence of
any such Dilutive Event the Conversion Price will be reduced so that the
Conversion Price in effect immediately following the Dilutive Event will equal
the Diluted Share Price. Notwithstanding the foregoing, the issuance by the
Corporation of up to 3,500,000 shares of Common Stock, or securities convertible
into or options to acquire up to 3,500,000 shares of Common Stock, issued
pursuant to stock option plans or grants to officers or employees approved by
the Board or the issuance of Common Stock pursuant to the Warrants issued
pursuant to the Securities Purchase Agreement shall not constitute a Dilutive
Event. As used in this Section 4.2(b) and in Section 4.3 below, the term
"Common Stock" shall include Common Stock Equivalents. Notwithstanding anything
contained herein to the contrary, the Conversion Price of Series A Preferred
held by a particular holder shall not be adjusted pursuant to this Section 4 in
connection with a particular Dilutive Event, or any subsequent Dilutive Event,
if such holder of Series A Preferred fails to purchase, after being offered by
the Corporation the
- 5 -
opportunity to purchase, a percentage of the securities, rights or options, or
any combination thereof, the sale of which constitute the Dilutive Event, which
is equal to or greater than 75 % of the percentage ownership of the
Corporation's Common Stock on a fully diluted basis held by such holder
immediately prior to such Dilutive Event. Series A Preferred which is no longer
subject to adjustment as a result of the preceding sentence shall remain subject
to such limitation regardless of any subsequent transfers, and at each time that
any Series A Preferred so loses its rights to such adjustment, all shares of
Series A Preferred which have lost their right to such adjustment as of such
time shall be automatically classified into (and the outstanding certificates
representing such Series A Preferred will automatically be deemed to represent)
new sub-series X-0, X-0, X-0, etc., consecutively, beginning with A-1. The
holders of shares of each such sub-series shall promptly deliver the
certificate(s) representing such stock to the Corporation upon the Corporation's
request, for exchange or notation to reflect such sub-series. If any such
certificates are not delivered to the Corporation, the Corporation shall make
appropriate notations on its stock records, which may include stop transfer
instructions, and may place in escrow, pending receipt of such certificates, all
dividend payments or other distributions owing with respect to the shares
represented by such certificates.
4.3 Issuance and Sale of Common Stock. For purposes of determining the
---------------------------------
adjusted Conversion Price pursuant to Section 4.2(b) above the following events
shall be deemed to be an issuance and sale of Common Stock by the Corporation:
(a) Issuance of Rights or Options. If (i) the Corporation in any
-----------------------------
manner grants any rights or options to subscribe for or to purchase shares of
Common Stock or any securities convertible into or exchangeable for shares of
Common Stock (such rights or options referred to herein as "Options" and such
convertible or exchangeable stock or securities referred to herein as
"Convertible Securities") and (ii) the Price Per Share of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities is less than the Conversion Price in effect
immediately prior to the time of the granting of such Options then the shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities will be deemed to have been issued and
sold by the Corporation for such Price Per Share. For the purposes of this
Section 4.3(a), the "Price Per Share" is determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon exercise of all such Options, plus
in the case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to the Corporation
upon the issuance or sale of such Convertible Securities and the conversion or
exchange thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Conversion Price will be made when Convertible
Securities are actually issued upon the exercise of such Options or when Common
Stock is actually issued upon the exercise of such Options or the conversion or
exchange of such
- 6 -
Convertible Securities.
(b) Issuance of Convertible Securities. If (i) the Corporation in
----------------------------------
any manner issues or sells any Convertible Securities and (ii) the Price Per
Share of shares of Common Stock issuable upon such conversion or exchange is
less than the Conversion Price in effect immediately prior to the time of such
issue or sale then the shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities will be deemed to have been issued and
sold by the Corporation for such Price Per Share. For the purposes of this
Section 4.3(b), the "Price Per Share" will be determined by dividing (i) the
total amount received or receivable by the Corporation as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Corporation upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment of the Conversion Price will be made when
Common Stock is actually issued upon the conversion or exchange of such
Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments to the
Conversion Price had been or are to be made pursuant to Section 4.3(a) above, no
further adjustment of the Conversion Price will be made by reason of such issue
or sale.
(c) Change in Option Price or Conversion Rate. If at any time there
-----------------------------------------
is a change in (i) the purchase price provided for in any Options, (ii) the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities, or (iii) the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock, then the Conversion Price
in effect at the time of such change will be readjusted to the Conversion Price
which would have been in effect had those Options or Convertible Securities
still outstanding at the time of such change provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time such Options or Convertible Securities were initially granted,
issued or sold; provided that if such adjustment would result in an increase of
the Conversion Price then in effect, such adjustment will not be effective until
30 days after written notice thereof has been given by the Corporation to all
holders of the Series A Preferred.
(d) Calculation of Consideration Received. If any shares of Common
-------------------------------------
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor or the Price Per
Share, as the case may be, will be deemed to be the net amount received or to be
received, respectively, by the Corporation therefor. In case any shares of
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Corporation or the non-cash portion of the Price Per Share, as
the case may be, will be the fair value of such consideration received or to be
received, respectively, by the Corporation; except where such consideration
consists of securities, in which case the amount of consideration received or to
be received, respectively, by the Corporation will be the Market Price thereof
as of
- 7 -
the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued in connection with any merger in which the Corporation is
the surviving corporation, the amount of consideration therefor will be deemed
to be the fair value of such portion of the net assets and business of the non-
surviving corporation as is attributable to such shares of Common Stock, Options
or Convertible Securities, as the case may be. The fair value of any
consideration other than cash and securities will be determined jointly by the
Corporation and the holders of a majority of the outstanding Series A Preferred
Shares. If such parties are unable to reach agreement within a reasonable period
of time, the fair value of such consideration will be determined by an
independent appraiser jointly selected by the Corporation and the holders of a
majority of the outstanding Series A Preferred Shares.
(e) Integrated Transactions. In case any Option is issued in
-----------------------
connection with the issuance or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
will be deemed to have been issued for a consideration of $.01.
(f) Record Date. If the Corporation takes a record of the holders of
-----------
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (ii) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issuance or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
4.4 Subdivision or Combination of Common Stock. If the Corporation at any
------------------------------------------
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision will be proportionately reduced. If the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased.
4.5 Organic Change. Prior to the consummation of any Organic Change, the
--------------
Corporation will make appropriate provisions (in form and substance satisfactory
to the holders of a majority of the shares of Series A Preferred then
outstanding) to insure that each of the holders of Series A Preferred Shares
with respect to all or any of the shares of Series A Preferred held thereby will
thereafter have the right to acquire and receive (in addition to the
liquidation, redemption and other relative rights and preferences of the Series
A Preferred Shares), in lieu of or in addition to the shares of Common Stock
immediately theretofore acquirable and receivable upon the conversion of such
holder's shares of Series A Preferred, such shares of stock, securities or
assets as such holder would have received in connection with such Organic Change
if such
- 8 -
holder had converted his, her or its Series A Preferred Shares immediately prior
to such Organic Change. In any such case, the Corporation will make appropriate
provisions (in form and substance satisfactory to the holders of a majority of
the shares of Series A Preferred then outstanding) to insure that the provisions
of this Section 4.5 will thereafter be applicable to the Series A Preferred
(including, an immediate adjustment of the Series A Preferred Conversion Price
to the value for the Common Stock reflected by the terms of such Organic Change
and a corresponding immediate adjustment in the number of shares of Common Stock
acquirable and receivable upon conversion of shares of Series A Preferred, if
the value so reflected is less than the Series A Preferred Conversion Price in
effect immediately prior to such Organic Change). The Corporation will not
effect any such Organic Change, unless prior to the consummation thereof, the
successor Corporation resulting from such Organic Change assumes by written
instrument (in form reasonably satisfactory to the holders of a majority of the
shares of Series A Preferred then outstanding, the obligation to deliver to each
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to acquire.
All other terms of the Series A Preferred shall remain in full force and
effect following such an Organic Change. The provisions of this Section 4.5
shall similarly apply to successive Organic Changes.
4.6 Notices.
-------
(a) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series A
Preferred specifying the Conversion Price in effect thereafter with respect to
the particular holder.
(b) The Corporation shall give written notice to all holders of
Series A Preferred at least 20 days prior to the date on which the Corporation
closes its books or takes a record for determining rights to vote with respect
to any Organic Change, Change in Control, Change of Ownership, Fundamental
Change, other reorganization, dissolution or liquidation. The Corporation shall
also give written notice to the holders of Series A Preferred at least 20 days
prior to the date on which any Organic Change, Change in Control, Change of
Ownership, Fundamental Change, other reorganization, dissolution or liquidation
shall occur.
4.7 Mandatory Conversion.
--------------------
(a) If the Corporation shall effect a firm commitment underwritten
Public Offering of shares of its Common Stock in which (a) the aggregate price
paid by the public for the shares will be at least $15 million and (b) the price
per share paid by the public for such shares will be at least four times the
Conversion Price then in effect ("Qualified Public Offering") then the
Corporation shall require the conversion of, and the holders shall convert, all
of the outstanding Series A Preferred Shares into shares of Common Stock and
upon such conversion
- 9 -
each holder of Series A Preferred Shares shall also receive from the Corporation
in respect to each share of Series A Preferred so converted, at such holder's
election, either (i) a cash amount equal to the Liquidation Value, or (ii) an
additional number of shares of registered Common Stock equal to the number
obtained by dividing the Liquidation Value by the price per share received by
the Corporation in such Qualified Public Offering, all without any further
action by the holders of such Series A Preferred Shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent. Any such mandatory conversion shall only be effected at the time
of and subject to the closing of the sale of such shares pursuant to such
Qualified Public Offering and upon written notice of such mandatory conversion
delivered to all holders of Series A Preferred at least seven but not more than
20 days prior to such closing.
(b) If (i) the Corporation shall effect a firm commitment
underwritten Public Offering of shares of its Common Stock which is not a
Qualified Public Offering (a "Non-Qualified Public Offering") and (ii) the
holders of at least 66-2/3% of the Series A Preferred Shares outstanding at such
time shall approve such Non-Qualified Public Offering then the Corporation shall
require the conversion of, and the holders shall convert, all of the outstanding
Series A Preferred Shares into shares of Common Stock and upon such conversion
each holder of Series A Preferred Shares shall also receive from the Corporation
in respect to each share of Series A Preferred so converted, at such holder's
election, either (i) a cash amount equal to the Liquidation Value, or (ii) an
additional number of shares of registered Common Stock equal to the number
obtained by dividing the Liquidation Value by the price per share received by
the Corporation in such Non-Qualified Public Offering, all without any further
action by the holders of such Series A Preferred Shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent. Any such mandatory conversion shall only be effected at the time
of and subject to the closing of the sale of such shares pursuant to such Non-
Qualified Public Offering and upon written notice of such mandatory conversion
delivered to all holders of Series A Preferred at least 7 but not more than 20
days prior to such closing.
4.8 Certain Events. If any event similar to or of the type contemplated
--------------
by the provisions of this Section 4, but not expressly provided for by such
provisions, occurs, then the Board will make an appropriate and equitable
adjustment in the Conversion Price so as to protect the rights of the holders of
Series A Preferred; provided that no such adjustment will increase the
Conversion Price as otherwise determined pursuant to this Section 4 or decrease
the number of shares of Common Stock issuable upon conversion of each Series A
Preferred Share.
Section 5. Redemptions.
5.1 Scheduled and Optional Redemptions.
----------------------------------
(a) The Corporation shall offer to redeem a number of Series A
Preferred Shares equal to 25 % of the Series A Preferred Shares outstanding as
of October 31, 2000 on
- 10 -
each of October 31, 2000, April 30, 2001 and October 31, 2001 (each such date a
"Scheduled Redemption Date") at a price per share equal to the Series A
Liquidation Value. The Corporation shall offer to redeem all of the Series A
Preferred Shares remaining outstanding on April 30, 2002 (the "Final Redemption
Date"), at a price per share equal to the Series A Liquidation Value.
(b) Any holder of outstanding Series A Preferred Shares outstanding
after the Final Redemption Date may elect to require the Corporation to redeem
any or all of such outstanding Series A Preferred Shares at a price per share
equal to the Series A Liquidation Value by giving written notice to the
Corporation of such election (an "Optional Redemption Notice"). Within five
days of receipt of such Optional Redemption Notice, the Corporation shall give
written notice of such election to all other holders of Series A Preferred
Shares, and such other holders may elect to require the Corporation to redeem
all or any portion of their Series A Preferred Shares by giving written notice
of such election to the Corporation within 30 days of receipt of the
Corporation's notice. Upon receipt of such elections, the Corporation shall be
obligated to redeem from such holders, at a price per share equal to the Series
A Liquidation Value, all shares of Series A Preferred with respect to which
redemption elections have been received within 60 days of receipt of the
Optional Redemption Notice (the "Optional Redemption Date").
(c) In the event that any Series A Preferred Shares scheduled to be
redeemed in a redemption under section 5.1 are not redeemed ("Unredeemed
Shares"), the Corporation shall give written notice to each holder of Series A
Preferred Shares who redeemed shares in such redemption ("Redeeming
Shareholders") that such Redeeming Shareholder may elect to have redeemed his,
her or its ratable portion of such Unredeemed Shares based on the number of
Series A Preferred Shares held by all such Redeeming Shareholders at a price per
share equal to the Series A Liquidation Value by giving written notice to the
Corporation of such election (an "Additional Redemption Notice"). Upon receipt
of such Additional Redemption Notice, the Corporation shall be obligated to
redeem from such Redeeming Shareholders, at a price per share equal to the
Series A Liquidation Value, all shares of Series A Preferred (but not more then
the Unredeemed Shares) with respect to which redemption elections have been
received within 60 days of receipt of the Additional Redemption Notice (the
"Additional Redemption Date").
(d) Nothing contained in this Section 5 shall be deemed to prevent
any holder of Series A Preferred Shares from (i) exercising such holder's right
of conversion pursuant to Section 4.1 hereof with respect to any share of Series
A Preferred or (ii) electing by written notice to the Corporation to retain the
Series A Preferred Shares held by such holder, at any time prior to the
redemption of shares of Series A Preferred, including following the giving of
any notice of such redemption.
5.2 Redemption Payment. For each Series A Preferred Share that is to be
------------------
redeemed, the Corporation shall be obligated on the Scheduled Redemption Date,
the Final Redemption
- 11 -
Date, the Optional Redemption Date or the Additional Redemption Date, as the
case may be (each a "Redemption Date"), to pay to the holder thereof (upon
surrender by such holder at the Corporation's principal office of the
certificate representing such Series A Preferred Share) an amount in immediately
available funds equal to the Series A Liquidation Value of such Series A
Preferred Share. If the funds of the Corporation legally available for
redemption of Series A Preferred on any Redemption Date are insufficient to
redeem the total number of Series A Preferred Shares to be redeemed on such
date, those funds which are legally available shall be used first, to pay any
and all accumulated and unpaid dividends on the Series A Preferred Shares to be
redeemed, and thereafter, to redeem the Series A Preferred to be redeemed on
such Redemption Date, paid to the holders of the Series A Preferred ratably in
proportion to the number of Series A Preferred Shares held by each such holder
on such Redemption Date. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of Series A Preferred
Shares, such funds shall immediately be used to redeem the balance of the Series
A Preferred Shares which the Corporation had become obligated to redeem but had
not redeemed, paid to the holders of the Series A Preferred ratably in
proportion to the number of Series A Preferred Shares held by each such holder
on the date such funds become legally available. In case fewer than the total
number of Series A Preferred Shares represented by any certificate are redeemed,
a new certificate representing the number of unredeemed Series A Preferred
Shares shall be issued to the holder thereof without cost to such holder within
three business days after surrender of the certificate representing the redeemed
Series A Preferred Shares.
5.3 Determination of Each Holder's Series A Preferred Shares to be
--------------------------------------------------------------
Redeemed. The number of Series A Preferred Shares to be redeemed from each
--------
holder thereof in redemptions under Section 5.1 shall be the number of Series A
Preferred Shares equal to (i) the total number of Series A Preferred Shares to
be redeemed from all holders of Series A Preferred in such redemption, times
(ii) the quotient derived by dividing the total number of Series A Preferred
Shares then held by such holder by the total number of Series A Preferred Shares
then outstanding.
5.4 No Rights After Redemption. No Series A Preferred Share which has
--------------------------
been redeemed is entitled to any dividends declared after the date on which the
Series A Liquidation Value of such Series A Preferred Share is paid to the
holder thereof. On such date all rights of the holder of such Series A
Preferred Share shall cease, and such Series A Preferred Share shall no longer
be deemed to be outstanding.
5.5 Redeemed or Otherwise Acquired Shares. No share or shares of Series A
-------------------------------------
Preferred acquired by the Corporation by reason of redemption, conversion or
otherwise shall be reissued, and all such shares shall be canceled, retired and
eliminated from the shares which the Corporation shall be authorized to issue.
- 12 -
5.6 Events of Noncompliance.
-----------------------
(a) An Event of Noncompliance shall be deemed to have occurred:
(i) If the Corporation fails to pay dividends that have been
declared by the Board on the Series A Preferred (and such failure
continues for a period of 30 days);
(ii) If the Corporation fails to make any redemption payment
with respect to the Series A Preferred that it is obligated to make
hereunder;
(iii) If the Corporation breaches or otherwise fails to perform
or observe any other covenant or agreement contained herein or in the
Securities Purchase Agreement or the Related Agreements (as defined in
the Securities Purchase Agreement) and such failure to perform or
observe a covenant or agreement is not cured within 20 days after the
Corporation receives notice of the occurrence thereof;
(iv) If any representation, warranty or information contained in
the Securities Purchase Agreement or required to be furnished to any
holder of the Series A Preferred pursuant to the Securities Purchase
Agreement, or any writing furnished by the Corporation to any holder
of the Series A Preferred, is false or misleading in any material
respect on the date made or furnished;
(v) If the Corporation or any Subsidiary makes an assignment
for the benefit of creditors or admits in writing its inability to pay
its debts generally as they become due; or an order, judgment or
decree is entered adjudicating the Corporation or any Subsidiary
bankrupt or insolvent; or any order for relief with respect to the
Corporation or any Subsidiary is entered under the United States
Bankruptcy Code; or the Corporation or any Subsidiary petitions or
applies to any tribunal for the appointment of a custodian, trustee,
receiver or liquidator of the Corporation or any Subsidiary, or of any
substantial part of the assets of the Corporation or any Subsidiary,
or commences any proceeding (other than a proceeding for the voluntary
liquidation and dissolution of any Subsidiary) relating to the
Corporation or any Subsidiary under any bankruptcy reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or any such petition or
application is filed, or any such proceeding is commenced, against the
Corporation or any Subsidiary and either (x) the Corporation or any
such Subsidiary by any act indicates its approval thereof, consent
thereto or acquiescence therein or (y) such petition, application or
proceeding is not dismissed within sixty (60) days;
- 13 -
(vi) If any money judgment, writ or warrant of attachment, or
similar process involving an amount in any individual case in excess
of $50,000 or an amount in the aggregate in excess of $200,000 is
entered or filed against the Corporation or any of its Subsidiaries or
any of their respective assets and remains undischarged, unvacated,
unbonded or unstayed for a period of 30 days; or
(vii) If the Corporation or any Subsidiary defaults in the
performance of any obligation or obligations if the effect of such
default is to cause an amount having an individual principal amount in
excess of $100,000 or having an aggregate principal amount in excess
of $200,000 to become due prior to its stated maturity or to permit
the holder or holders of such obligation or obligations to cause an
amount having an individual principal amount in excess of $100,000 or
having an aggregate principal amount in excess of $200,000 to become
due prior to its stated maturity.
(b) If an Event of Noncompliance of the type described in Section
5.6(a)(v) above shall have occurred, the Corporation shall become obligated to
immediately redeem all of the Series A Preferred Shares outstanding at a price
per share equal to the Series A Liquidation Value, without any demand or other
action on the part of the holders thereof.
(c) If any Event of Noncompliance shall have occurred, the holders of
a majority of the Series A Preferred Shares then outstanding may demand by
written notice delivered to the Corporation immediate redemption of all or any
portion of the Series A Preferred Shares owned by such holder or holders at a
price per share equal to Series A Liquidation Value. The Corporation shall give
prompt written notice of any such election to the other holders of Series A
Preferred (but in any event within five days after the receipt of the initial
demand for redemption), and each such other holder may demand immediate
redemption of all or any portion of such holder's Series A Preferred Shares by
giving written notice thereof to the Corporation within seven days after receipt
of the Corporation's notice. If any holder or holders of the Series A Preferred
demands immediate redemption of all or any portion of such holder's Series A
Preferred Shares pursuant to the terms of this Section 5.6(c), the Corporation
shall pay to such holder or holders the aggregate Series A Liquidation Value of
the Series A Preferred Shares requested to be redeemed by such holder or holders
within 10 days after receipt of the initial demand for redemption; provided that
if at any time after the requisite number of holders of Series A Preferred
Shares shall have demanded immediate redemption pursuant to this Section 5.6(c),
the Corporation shall pay all accumulated and unpaid dividends on the Series A
Preferred Shares and make all redemption payments (if any) with respect to the
Series A Preferred Shares which it shall have been obligated to make otherwise
than pursuant to this Section 5.6(c), and all Events of Noncompliance (other
than nonpayment of dividends and failure to make any redemption payment due and
payable solely by virtue of this Section 5.6(c)) shall be remedied or waived by
such holders, then, and in every such case, such holders may, by written notice
to the Corporation, rescind and annul such demand for immediate redemption and
its consequences.
- 14 -
5.7 Pro Rata Redemptions. The Corporation shall not, and shall not permit
--------------------
any Subsidiary of the Corporation to, purchase or acquire any shares of Series A
Preferred other than pursuant to the terms of this Section or pursuant to an
offer made on the equivalent terms to all holders of Series A Preferred Shares
at the time outstanding.
Section 6. Purchase Rights. If at any time the Corporation grants,
issues or sells any equity securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of Common Stock
("Purchase Rights"), then each holder of Series A Preferred will be entitled to
such Purchase Rights, ratably in proportion to the number of shares of Common
Stock each such holder would have held if each had converted all Series A
Preferred Shares held by it into Common Stock on the date on which a 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 Common Stock are to
be determined for the grant, issuance or sale of such Purchase Rights.
Section 7. Miscellaneous.
7.1 Registration of Transfer. The Corporation will keep at its principal
------------------------
office a register for the registration of Series A Preferred Shares. Upon the
surrender of any certificate representing Series A Preferred Shares at such
place, the Corporation will, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of Series A Preferred Shares represented by the surrendered
certificate. Each such new certificate will be registered in such name and will
represent such number of Series A Preferred Shares as is requested by the holder
of the surrendered certificate and will be substantially identical in form to
the surrendered certificate, and dividends will accrue on the Series A Preferred
Shares represented by such new certificate from the date to which dividends have
been fully paid on such Series A Preferred Shares represented by the surrendered
certificate.
7.2 Replacement. Upon receipt of evidence reasonably satisfactory to the
-----------
Corporation (an affidavit of the registered holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Series A Preferred Shares, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is an institutional investor its own
agreement will be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Corporation will (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind representing
the number of Series A Preferred Shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate, and dividends will accrue on the
Series A Preferred Shares represented by such new certificate from the date to
which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.
- 15 -
7.3 Amendment and Waiver. No amendment, modification or waiver will be
--------------------
binding or effective with respect to any provision of this Article IV without
the prior written consent of the holders of at least 66-2/3 % of the Series A
Preferred Shares outstanding at the time such action is taken; provided that no
action will discriminate against any holder of Series A Preferred other than as
a result of a difference in the number of Series A Preferred Shares held by such
holders.
7.4 Notices. Except as otherwise expressly provided, all notices referred
-------
to herein will be in writing and will be delivered by registered or certified
mail, return receipt requested, postage prepaid and will be deemed to have been
given on the third day after mailing (a) to the Corporation, at its principal
executive offices and (b) to any shareholder, at such holder's address as it
appears in the stock records of the Corporation (unless otherwise indicated in
writing by such holder).
PART B. TERMS APPLICABLE TO COMMON STOCK
Section 1. Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and after the payment
of any preferential amounts to be distributed to the holders of Series A
Preferred, the remaining Distributable Funds shall be distributed to the holders
of Common Stock and to the holders of the Series A Preferred, ratably in
proportion to the number of shares of Common Stock that each such holder holds,
or would hold if each holder of the Series A Preferred had converted all of the
Series A Preferred Shares held by it into Common Stock on the date of
liquidation, dissolution or winding up of the Corporation.
Section 2. Dividends. Whenever preferential dividends upon the Series A
Preferred, to the extent such stock may be entitled thereto, shall have been
paid or declared and set apart for payment, and not otherwise, the Board may
declare a dividend or distribution upon the Common Stock. Subject to the right
of the holders of the Series A Preferred to participate in such dividend or
distribution, dividends or distributions so declared by the Board shall be paid
to the holders of Common Stock ratably in proportion to the number of shares of
Common Stock held by each such holder on the date as of which the holders of
Common Stock of record entitled to receive such dividends or distribution were
determined.
Section 3. Voting Rights. The Common Stock shall have those voting rights
set forth for the Common Stock in Part C below.
PART C. VOTING RIGHTS
Section 1. In General. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by this Certificate of Incorporation
or any amendments thereto, on all matters submitted to a vote of the
shareholders of the Corporation, the Common Stock and Series
- 16 -
A Preferred shall vote together as a single class. For purposes of this Section
1, each holder of Series A Preferred shall have the number of votes equal to the
number of shares of Common Stock which such holder would have been entitled to
receive had such holder converted all of his, her or its Series A Preferred
Shares into Common Stock on the date as of which the holders of Common Stock of
record entitled to vote were determined (assuming for this purpose only that
Series A Preferred Shares are convertible into fractional shares) and each
holder of Common Stock shall have one vote per share of Common Stock held by
such holder on the date as of which the holders of Common Stock of record
entitled to vote were determined.
Section 2. Series A Preferred Directors.
2.1 Number of Series A Preferred Directors. The Board of Directors of the
--------------------------------------
Corporation shall include four directors designated as "Series A Preferred
Directors," who shall be nominated and elected in accordance with the provisions
of this Section 2.
2.2 Series A Preferred Directors.
----------------------------
(a) The Series A Preferred Directors shall be nominated by the
holders of a majority of the issued and outstanding Series A Preferred Shares
entitled to vote thereon, voting as a separate class. Once nominated, the Series
A Preferred Directors shall be elected to the Board by the holders of a majority
of the issued and outstanding Series A Preferred Shares entitled to vote
thereon, voting as a separate class, at any annual meeting of the shareholders
or special meeting of the shareholders called for that purpose or by written
consent in lieu of a meeting.
(b) The Series A Preferred Directors may be removed with or without
cause at any time by the holders of a majority of the issued and outstanding
Series A Preferred Shares entitled to vote thereon, voting as a separate class.
(c) Vacancies of Series A Preferred Directors shall be filled in the
same manner as set forth for the election of Series A Preferred Directors in
Section 2.2 (a) above.
(d) Each Series A Preferred Director shall be entitled to cast one
(1) vote on each matter submitted to the Board for a vote, unless an Event of
Noncompliance shall have occurred, in which case each Series A Preferred
Director shall be entitled to cast three (3) votes on each matter submitted to
the Board. The special voting rights granted to Series A Preferred Directors in
this Section 2.2(d) shall continue for one year from the date the Event of
Noncompliance giving rise to such "super" voting rights ceases to exist, but
automatically will apply again if an additional Event of Noncompliance occurs.
2.3 Quorum, Required Vote and Adjournment. At all meetings of the Board,
-------------------------------------
directors entitled to cast a majority of the votes of the entire Board shall
constitute a quorum for
- 17 -
the transaction of business and the act of directors entitled to cast a majority
of the votes present at any meeting at which there is a quorum shall be the act
of the Board, except as may be other-wise specifically provided by the General
Corporation Law of the State of Delaware or by this Certificate of Incorporation
or any amendments thereto. Notwithstanding the foregoing, a quorum shall not be
present for the transaction of business of the Board unless at least one Series
A Preferred Director shall be present at a meeting of the Board. If a quorum
shall not be present at any meeting of the Board, then the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 3. Special Matters. The affirmative vote of the holders of at
least a majority of the outstanding shares of the Corporation entitled to vote
thereon shall be required to approve: (a) any amendment to this Certificate of
Incorporation; and (b) any merger, consolidation or share exchange; provided
that where, pursuant to the General Corporation Law of the State of Delaware,
the holders of the outstanding shares of any class shall be entitled to vote as
a class in respect of any such amendment or transaction, the proposed amendment
or transaction shall be approved upon receiving the affirmative vote of the
holders of at least a majority of the outstanding shares of each class of shares
entitled to vote as a class in respect thereof and of the total outstanding
shares entitled to vote. In addition, so long as any Series A Preferred Shares
remain outstanding the Corporation shall not, without the affirmative vote or
written consent by the holders of not less than 51 % of the Series A Preferred
Shares then outstanding:
(a) Issuances. Authorize, issue, or enter into any agreement
---------
providing for the issuance (contingent or otherwise) of, (x) any notes or debt
securities containing equity features (including, without limitation, any notes
or debt securities convertible into or exchangeable for equity securities,
issued in connection with the issuance of equity securities or containing profit
participation features) or (y) any equity securities (or any securities
convertible into or exchangeable for any equity securities), except for Common
Stock or options to acquire Common Stock representing no more than five percent
(5 %) of the fully diluted equity capital which may be issued by the Board only
after the approval of at least two of the Series A Preferred Directors, as
incentives to key employees, consultants and directors of the Corporation; to
merge or consolidate with any Person;
(b) Mergers. Merge or consolidate with any Person or permit any
-------
Subsidiary to merge or consolidate with any Person;
(c) Sale of Assets. Sell, lease or otherwise dispose of, or permit
--------------
any Subsidiary to sell, lease or otherwise dispose of, assets in one or a series
of related transactions that represent 10% or more of the Corporation's assets
or income, or are valued at $1,000,000, whichever is less;
(d) Liquidations. Liquidate, dissolve or effect a recapitalization
------------
or
- 18 -
reorganization in any form of transaction;
(e) Charter Amendments. Make any amendment to the Corporation's
------------------
certificate of incorporation or by-laws, including without limitation, an
amendment altering, changing or otherwise amending the references or rights of
the Series A Preferred Shares or increasing or decreasing the number of
directors constituting the Board, or file any resolution of the Board with the
Secretary of State of Delaware.
PART D. DEFINITIONS IN THIS CERTIFICATE OF INCORPORATION
"Board" means the Corporation's Board of Directors.
"Change of Control" means any transaction, circumstance or event that shall
cause or result in Xxxxx Xxxx and Xxxxxx Xxxxxxxxxx either (a) owning, directly
or indirectly, beneficial or record ownership of shares of the Corporation's
capital stock or securities having less than 20% of the issued and outstanding
shares of the Corporation entitled to vote on matters submitted to the
Corporation's shareholders, or (b) resigning or being removed or otherwise not
serving as a member of the Board.
"Common Stock Equivalent" means, collectively, any capital stock of any
class of the Corporation hereafter authorized which is not limited to a fixed
sum or percentage of par or stated value in respect to the rights of the holders
thereof to participate in dividends or in the distribution of assets upon any
liquidation, dissolution or winding up of the Corporation or similar equity like
participation rights or phantom stock interests.
"Liquidation Value" of any share of Series A Preferred as of any particular
date will be equal to $0.347037 (adjusted for any divisions, whether by stock
split, stock dividend or otherwise, or combinations, whether by reverse stock
split or otherwise, of the Series A Preferred Shares) plus accumulated but
unpaid dividends on such share.
"Market Price" of any security means the average of the closing prices of
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on the primary
exchange on which such security is listed at the end of such day, or, if on any
day such security is not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if
on any day such security is not quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a period of 21
days consisting of the day as of which "Market Price" is being determined and
the 20 consecutive business days prior to such day. The "Market Price" of a
note or other obligation
- 19 -
which is not listed on a securities exchange or quoted in the NASDAQ System or
reported by the National Quotation Bureau, Incorporated, the total consideration
received by the Corporation (including interest) will be discounted at the prime
rate of interest at the First National Bank of Chicago in effect at the time the
note or obligation is deemed to have been issued. If at any other time such
security is not listed on any securities exchange or quoted in the NASDAQ System
or the over-the-counter market, the "Market Price" will be the fair value
thereof determined jointly by the Corporation and the holders of a majority of
the Series A Preferred Shares. If such parties are unable to reach agreement
within a reasonable period of time, such fair value will be determined by an
independent appraiser jointly selected by the Corporation and the holders of a
majority of the Series A Preferred Shares.
"Organic Change" means any capital reorganization, reclassification,
consolidation, merger, lease, or sale of all or substantially all of the
Corporation's assets to another Person (other than a liquidation as determined
under Section 1.1 above) which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for shares of Common
Stock.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"Public Offering" means any offering by the Corporation of its equity
securities to the public pursuant to an effective registration statement under
the Securities Act of 1933, as then in effect, or any comparable statement under
any similar federal statute then in force; provided that for purposes of Section
4.7 above a Public Offering will not include an offering made in connection with
a business acquisition or an employee benefit plan.
"Securities Purchase Agreement" means the Series A Securities Purchase
Agreement, dated as of or about December 1, 1994, by and among the Corporation
and Platinum Venture Partners I, L.P. and the Investors (as defined in the
Securities Purchase Agreement), as such agreement may be amended from time to
time in accordance with its terms.
"Subsidiary" means any corporation, association or other business entity of
which securities or other ownership interests representing more than fifty
percent (50%) of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Corporation or one or
more Subsidiaries of the Corporation or by the Corporation and one or more
Subsidiaries of the Corporation.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute, the Board is, by action of the full Board, expressly authorized to
adopt, amend or repeal the by-laws of the Corporation.
- 20 -
SIXTH: Except as otherwise provided in this Certificate of
Incorporation, the Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this reservation.
SEVENTH: Each person who is or was a director or officer of the
Corporation and each person who serves or served at the request of the
Corporation as a director, officer or partner of another enterprise shall be
indemnified by the Corporation in accordance with, and to the fullest extent
authorized by, the General Corporation Law of the State of Delaware as the same
now exists or may be hereafter amended. No amendment to or repeal of this
ARTICLE SEVENTH shall apply to or have any effect on the rights of any
individual referred to in this ARTICLE SEVENTH for or with respect to acts or
omissions of such individual occurring prior to such amendment or repeal.
EIGHTH: To the fullest extent permitted by the General Corporation Law of
the State of Delaware as the same now exists or may be hereafter amended, a
director of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
No amendment to or repeal of this ARTICLE EIGHTH shall apply to or have any
effect on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
the effective date of such amendment or repeal.
NINTH: Meetings of stockholders may be held within or outside of the
State of Delaware, as the by-laws of the Corporation may provide. The books of
the Corporation may be kept outside the State of Delaware at such place or
places as may be designated from time to time by the Board or in the by-laws of
the Corporation. Election of directors need not be by written ballot unless the
by-laws of the Corporation so provide.
BLUE RHINO CORPORATION
By: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx, President
- 21 -
BLUE RHINO CORPORATION
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is dated as of March 1, 1997 by and among BLUE RHINO CORPORATION, a Delaware
corporation (the "Corporation"), and the Persons listed on Schedule 1 attached
----------
hereto (collectively, the "Purchasers"). This Agreement amends and restates in
its entirety that certain Registration Rights Agreement dated December 1, 1994,
as amended.
RECITALS:
A. Purchasers have agreed to purchase shares of the Corporation's Series
A Convertible Participating Preferred Stock (the "Series A Preferred Shares"),
shares of the Corporation's Common Stock (the "Common Shares") and Warrants (the
"Warrants") pursuant to certain agreements that provide that the parties hereto
enter into this Agreement.
B. The Corporation deems it desirable to enter into this Agreement in
order to induce Purchasers to purchase the Series A Preferred Shares, the Common
Shares and the Warrants.
AGREEMENTS
In consideration of the premises and the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement.
-----------
"Agreement" shall meant this Amended and Restated Registration Rights
Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $0.001 par value per share, of the
Corporation.
"Common Shares" means the 2,000,000 shares of Common Stock purchased by
Platinum Propane Holding, L.L.C. pursuant to that certain Securities Purchase
Agreement dated March 1, 1997.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Person" means a natural person, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means any offering by the Corporation of its equity
securities to the public pursuant to an effective registration statement under
the Securities Act or any comparable statement under any comparable federal
statute then in effect.
"Registrable Shares" means at any tune (i) any shares of Common Stock then
outstanding which were issued upon conversion of the Securities; (ii) any shares
of Common Stock then issuable upon conversion or exercise of the then
outstanding Securities; (iii) the Common Shares; (iv) any shares of Common Stock
then outstanding which were issued as, or were issued directly or indirectly
upon the conversion or exercise of other securities issued as, a dividend or
other distribution with respect or in replacement of any shares referred to in
(i), (ii) or (iii); and (v) any shares of Common Stock then issuable directly or
indirectly upon the conversion or exercise of other securities which were issued
as a dividend or other distribution with respect to or in replacement of any
shares referred to in (i), (ii) or (iii); provided, however, that Registrable
Shares shall not include any shares which have been registered pursuant to the
Securities Act or which have been sold to the public pursuant to Rule 144 of the
Commission under the Securities Act. For purposes of this Agreement, a person
will be deemed to be a holder of Registrable Shares whenever such person has the
then-existing right to acquire such Registrable Shares (by conversion or
otherwise), whether or not such acquisition actually has been effected.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities" means the Series A Preferred Shares, Common Shares and the
Warrants, collectively.
"Warrants" means the Warrants to purchase (i) 4,214,185 shares of Common
Stock at $0.0347037 per share, issued to certain investors on December 1, 1994,
(ii) 115,264 shares of Common Stock at $0.347037 per share, issued to Xxxxx
Xxxxxxxx ("Xxxxxxxx"), Xxxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxx Xxxxxxxxxx
("Xxxxxxxxxx") and Xxxxxx X. Xxxxxx ("Xxxxxx") in connection with a bridge loan
in May 1995, (iii) 2,593,385 shares of Common Stock at $0.347037 per share
issued to Huizenga, Filipowski, Duchossois, Steele, and Xxxxx X. Xxxx ("Prim")
in connection with their guarantee of loan to the Corporation in June 1995,
(iv) 86,446 shares of Common Stock at $0.347037 per share issued to Platinum
Venture Partners I, L.P. in connection with a loan to the Corporation in May
1995, (v) 259,338 shares of Common Stock at $0.347037 per share issued to
Platinum Venture Partners I, L.P. in connection with the extension of the
maturity on its loan to the Corporation on August 14, 1995, (vi) 6,612,926
shares of Common Stock at $0.347037 per share to be issued to the purchasers of
the 10.5% Senior Discount Notes and Warrants pursuant to that certain Unit
Purchase Agreement dated November 4, 1995 (the "Unit Purchase Agreement"), (vii)
960,000 shares of Common Stock at $0.347037 per share issued to Xxxxxxxx,
Xxxxxxxxxx and Peer Xxxxxxxx or their assigns pursuant to the Unit Purchase
Agreement, (viii) 1,502,745 shares of Common Stock at $0.50 per share issued to
Xxxx/Forseyth L.P. upon the extension of lease financing to the Corporation, and
(ix) 1,500,000
2
shares of Common Stock at $0.50 per share issued to Platinum Propane Holding,
L.L.C. pursuant to that certain Securities Purchase Agreement dated March 1,
1997.
2. Demand Registration.
-------------------
2.1 Requests for Registration. Subject to the terms of this
-------------------------
Agreement, the holders of at least 51% of the then outstanding Registrable
Shares may, at any time request registration under the Securities Act of
all or part of their Registrable Shares on Form S-1 or any similar long-
form registration ("Long-Form Registrations") or, if available, on Form S-2
or S-3 or any similar short-form registration ("Short-Form Registrations").
Within 10 days after receipt of any request pursuant to this Section 2.1,
the Corporation will give written notice of such request to all other
holders of Registrable Shares and will include in such registration all
Registrable Shares with respect to which the Corporation has received
written requests for inclusion within 15 days after delivery of the
Corporation's notice. All registrations requested pursuant to this Section
2.1 are referred to herein as "Demand Registrations."
2.2 Long-Form Registrations. The holders of the Registrable Shares
-----------------------
will be entitled to request two Long-Form Registrations in which the
Corporation will pay all Registration Expenses (as defined in Section 6
below). A registration will not count as one of the permitted Long-Form
Registrations until it has become effective (unless such Long-Form
Registration has not become effective due solely to the fault of the
holders requesting such registration), and the second or any subsequent
Long-Form Registration will not count as one of the permitted Long-Form
Registrations unless the holders of the Registrable Shares are able to
register and sell at least 90% of the Registrable Shares requested to be
included in such registration; provided however, that in any event the
Corporation will pay all Registration Expenses in connection with any
registration initiated as a Long-Form Registration.
2.3 Short-Form Registrations. In addition to the Long-Form
------------------------
Registrations provided pursuant to Section 2.2 above, the holders of
Registrable Shares will be entitled to request an unlimited number of
Short-Form Registrations in which the Company will pay all Registration
Expenses. Demand Registrations will be Short-Form Registrations whenever
the Corporation is permitted to use any applicable short form. Once the
Corporation has become subject to the reporting requirements of the
Exchange Act, the Corporation will use its best efforts to make Short-Form
Registrations available for the sale of Registrable Shares.
2.4 Priority. The Corporation will not include in any Demand
--------
Registration any securities which are not Registrable Shares without the
written consent of the holders of at least 51% of the Registrable Shares
included in such Demand Registration. If other securities are permitted to
be included in a Demand Registration which is an underwritten offering and
the managing underwriters advise the Corporation in writing that in their
opinion the number of Registrable Shares and other securities requested to
be included
3
exceeds the number of Registrable Shares and other securities which can be
sold in such offering, the Corporation will include in such registration,
first, the Registrable Shares requested to be included in such Demand
Registration, pro rata among the holders of such securities on the basis of
--------
the number of Registrable Shares which are owned by such holders, and
second, other securities to be included in such Demand Registration.
2.5 Restrictions. The Corporation will not be obligated to effect
------------
any Long Form Registration within nine months after the effective date of a
previous Long-Form Registration. The Corporation may postpone for up to
three months the filing or the effectiveness of a registration statement
for a Demand Registration if the Corporation reasonably believes that such
Demand Registration would have an adverse effect on any proposal or plan by
the Corporation or any of its subsidiaries to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other significant transaction.
2.6 Selection of Underwriters. The holders of at least 51% of the
-------------------------
Registrable Shares included in any Demand Registration shall have the right
to select the investment banker(s) and manager(s) to administer the
offering, subject to the Corporation's approval which will not be
unreasonably withheld.
2.7 Preemption. The Corporation will have the right to preempt any
----------
Long Form Registration with a primary registration by delivering written
notice of such intention to the holders of Registrable Shares who have
requested such Long-Form Registration within fifteen (15) days after the
Corporation has received a request for such registration. In the ensuing
primary registration, the holders of Registrable Shares will have such
piggyback registration rights as are set forth in Section 3 hereof. Upon
the Corporation's preemption of a requested Long-Form Registration, such
requested registration will not count as one of the permitted Long-Form
Registrations.
3. Piggyback Registration.
----------------------
3.1 Right to Piggyback. Whenever the Corporation proposes to
------------------
register any of its securities under the Securities Act (other than
pursuant to a Demand Registration hereunder) and the registration form to
be used may be used for the registration of any Registrable Shares (a
"Piggyback Registration"), the Corporation will give prompt written notice
to all holders of the Registrable Shares of its intention to effect such a
registration and will include in such registration all Registrable Shares
(in accordance with the priorities set forth in Sections 3.2 and 3.3 below)
with respect to which the Corporation has received written requests for
inclusion within 15 days after the delivery of the Corporation's notice.
3.2 Priority on Primary Registrations. If a Piggyback Registration
---------------------------------
is an underwritten primary registration on behalf of the Corporation and
the managing underwriters advise the Corporation in writing that in their
opinion the number of securities
4
requested to be included in such registration exceeds the number which can
be sold in such offering, the Corporation will include in such registration
first, the securities that the Corporation proposes to sell, second, the
Registrable Shares requested to be included in such registration, pro rata
--------
among the holders of such Registrable Shares on the basis of the number of
shares which are owned by such holders, and third, other securities
requested to be included in such registration.
3.3 Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------
is an underwritten secondary registration on behalf of holders of the
Corporation's securities and the managing underwriters advise the
Corporation in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can
be sold in such offering, the Corporation will include in such registration
first, the securities requested to be included therein by the holders
requesting such registration and the Registrable Shares requested to be
included in such registration, pro rata among the holders of such
--------
securities on the basis of the number of shares of Common Stock or
Registrable Shares which are owned by such holders, and second, other
securities requested to be included in such registration.
3.4 Other Registrations. If the Corporation has previously filed a
-------------------
registration statement with respect to Registrable Shares pursuant to
Section 2 or pursuant to this Section 3, and if such previous registration
has not been withdrawn or abandoned, the Corporation will not file or cause
to be effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any successor
form), whether on its own behalf or at the request of any holder or holders
of such securities, until a period of at least 180 days has elapsed from
the effective date of such previous registration.
3.5 Selection of Underwriters. In connection with any Piggyback
-------------------------
Registration, the holders of at least 51% of the Registrable Shares
requested to be registered shall have the right to select the managing
underwriters to administer any offering of the Corporation's securities in
which the Corporation does not participate, and the Corporation will have
such right in any offering in which it participates, provided that in
either case such managing underwriters shall be qualified nationally
recognized underwriters.
4. Holdback Agreements.
-------------------
4.1 Holders' Agreements. Each holder of Registrable Shares agrees
-------------------
not to effect any public sale or distribution of equity securities of the
Corporation, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven (7) days prior to, and
during the 120 days following, the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration in which
Registrable Shares are included (except as part of such underwritten
registration), unless the underwriters managing the registered public
offering otherwise agree.
5
4.2 Corporation's Agreements. The Corporation agrees (i) not to
------------------------
effect any public sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to, and during the 120 days
following, the effective date of any underwritten Demand Registration or
any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or any
successor form), unless the underwriters managing the registered public
offering otherwise agree and (ii) to cause each holder of at least 1% (on a
fully diluted basis) of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities to
agree not to effect any public sale or distribution of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered
public offering otherwise agree.
5. Registration Procedures. Whenever the holders of Registrable Shares
-----------------------
have requested that any Registrable Shares be registered pursuant to this
Agreement, the Corporation will use its best efforts to effect the registration
and sale of such Registrable Shares in accordance with the intended method of
disposition thereof and, pursuant thereto, the Corporation will as expeditiously
as possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Shares and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus, or any amendments or supplements
thereto, the Corporation will furnish copies of all such documents proposed
to be filed to the counsel or counsels for the sellers of the Registrable
Shares covered by such registration statement);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus(es) used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than nine months and comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period
in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Shares such number of copies
of such registration statement, each amendment and supplement thereto, the
prospectus(es) included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Shares owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions
as any seller reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to
6
enable such seller to consummate the disposition in such jurisdictions of
the Registrable Shares owned by such seller (provided that the Corporation
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any such jurisdiction);
(e) notify each seller of such Registrable Shares, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller,
the Corporation will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Shares, such prospectus will not contain any untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(f) cause all such Registrable Shares to be listed on each securities
exchange on which similar securities issued by the Corporation are then
listed;
(g) provide a transfer agent and registrar for all such Registrable
Shares not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Shares being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Shares (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of Registrable Shares,
any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Corporation,
and cause the Corporation's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
(j) advise each seller of such Registrable Shares, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding
for such purpose and promptly use all reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;
(k) at least 48 hours prior to the filing of any registration
statement or prospectus,
7
or any amendment or supplement to such registration statement or
prospectus, furnish a copy thereof to each seller of such Registrable
Shares and refrain from filing any such registration statement, prospectus,
amendment or supplement to which counsel selected by the holders of a
majority of the Registrable Shares being registered shall have reasonably
objected on the grounds that such document does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or supplement,
in the opinion of counsel for the Corporation the filing of such amendment
or supplement is reasonably necessary to protect the Corporation from any
liabilities under any applicable federal or state law and such filing will
not violate applicable laws; and
(l) at the request of any seller of such Registrable Shares in
connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel,
addressed to the underwriters and the sellers of Registrable Shares,
covering such matters as such underwriters and sellers may reasonably
request, including such matters as are customarily furnished in connection
with an underwritten offering; and (ii) a letter or letters from the
independent certified public accountants of the Corporation addressed to
the underwriters and the sellers of Registrable Shares, covering such
matters as such underwriters and sellers may reasonably request, in which
letter(s) such accountants shall state, without limiting the generality of
the foregoing, that they are independent certified public accountants
within the meaning of the Securities Act and that in their opinion the
financial statements and other financial data of the Corporation included
in the registration statement, the prospectus(es), or any amendment or
supplement thereto, comply in all material respects with the applicable
accounting requirements of the Securities Act.
6. Registration Expenses.
---------------------
6.1 Corporation's Expenses. All expenses incident to the
----------------------
Corporation's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the
Corporation and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the
Corporation (all such expenses being herein called "Registration
Expenses"), will be borne by the Corporation.
6.2 Holder's Expenses. Notwithstanding anything to the contrary
-----------------
contained herein, each holder of Registrable Shares will pay all attorney
fees and disbursements for counsel they retain in connection with the
registration of Registrable Shares, except that the Corporation will
reimburse the holders of Registrable Shares for the reasonable fees and
disbursements of one counsel chosen by the holders of at least 51% of such
Registrable Shares in connection with a Demand Registration.
8
7. Indemnification.
---------------
7.1 By the Corporation. The Corporation agrees to indemnify, to the
------------------
extent permitted by law, each holder of Registrable Shares, its officers
and directors and each person who controls such holder (within the meaning
of the Securities Act) against all losses, claims, damages, liabilities and
expenses (including without limitation, attorney's fees) caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Corporation by such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Corporation has furnished
such holder with a sufficient number of copies of the same. In connection
with an underwritten offering, the Corporation will indemnify such
underwriters, their officers and directors and each person who controls
such underwriters (within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification of the holders
of Registrable Shares. The payments required by this Section 7.1 will be
made periodically during the course of the investigation or defense, as and
when bills are received or expenses incurred.
7.2 By Each Holder. In connection with any registration statement in
--------------
which a holder of Registrable Shares is participating, each such holder
will furnish to the Corporation in writing such information and affidavits
as the Corporation reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by law,
will indemnify the Corporation, its directors and officers and each person
who controls the Corporation (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in
the registration statement, prospectus or preliminary prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that
such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the
obligation to indemnify will be several, not joint and several, among such
holders of Registrable Shares and the liability of each such holder of
Registrable' Shares will be in proportion to and limited to the net amount
received by such holder from the sale of Registrable Shares pursuant to
such registration statement.
7.3 Procedure. Any person entitled to indemnification hereunder will
---------
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel
9
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
7.4 Survival. The indemnification provided for under this Agreement
--------
will remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or
controlling person of such indemnified party and will survive the transfer
of securities. The Corporation also agrees to make such provisions as are
reasonably requested by any indemnified party for contribution to such
party in the event the Corporation's indemnification is unavailable for any
reason.
8. Compliance with Rule 144. In the event that the Corporation (a)
------------------------
registers a class of securities under Section 12 of the Exchange Act or (b)
commences to file reports under Section 13 or 15(d) of the Exchange Act, then at
the request of any holder who proposes to sell securities in compliance with
Rule 144 of the Commission, the Corporation will (i) forthwith furnish to such
holder a written statement of compliance with the filing requirements of the
Commission as set forth in Rule 144, as such rules may be amended from time to
time and (ii) make available to the public and such holders such information as
will enable the holders to make sales pursuant to Rule 144.
9. Participation in Underwritten Registrations. No person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
person (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by such person or persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, custody agreements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
10. Miscellaneous.
-------------
10.1 No Inconsistent Agreements. The Corporation will not hereafter
--------------------------
enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the holders of Registrable Shares
in this Agreement.
10.2 Adjustments Affecting Registrable Shares. The Corporation will
----------------------------------------
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Shares to include such Registrable Shares in a registration
undertaken pursuant to this Agreement or which Shares in any such would
adversely affect the marketability of such Registrable registration,
including, without limitation, effecting a stock split or combination of
shares.
10
10.3 Amendments and Other Registration Rights. Except as provided
----------------------------------------
in this Agreement, without the prior written consent of holders of at least
51% of the Registerable Shares, (a) this Agreement shall not be amended and
(b) the Corporation will not hereafter grant to any person or persons the
right to request the Corporation to register any equity securities of the
Corporation or any securities convertible or exchangeable into or
exercisable for such securities. The Corporation will not include in any
demand registration any securities which are not Registerable Shares (for
the purposes of Section 2) unless and until all Registerable Shares
requested to be registered have first been so included.
10.4 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, all covenants and, agreements contained in this Agreement by or on
behalf of any of the parties hereto will bind and inure to the benefit of
the respective successors and assigns of the parties hereto, whether so
expressed or not. In addition, and whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit
of the Purchasers or holders of Registrable Shares are also for the benefit
of, and enforceable by, any subsequent holders of such Registrable Shares.
10.5 Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
10.6 Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience of reference only and do not constitute a part
of and shall not be utilized in interpreting this Agreement.
10.7 Notices. Any notices required or permitted to be sent hereunder
-------
shall be delivered personally or mailed, certified mail, return receipt
requested, or delivered by overnight courier service to the following
addresses, or such other address as any party hereto designates by written
notice to the Corporation, and shall be deemed to have been given upon
delivery, if delivered personally, three days after mailing, if mailed, or
one business day after delivery to the courier, if delivered by overnight
courier service:
If to the Corporation, to:
Blue Rhino Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxx, Chief Executive Officer
11
with a copy to:
House Law Firm
P.O. Drawer 26015
Winston-Salem, North Carolina 27114-6015
Attention: Don R. House, Esq.
If to Purchasers, to:
Platinum Venture Partners I, L.P.
0000 X. Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
10.8 Governing Law. All questions concerning the construction,
-------------
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement, shall be governed by the laws of the
State of Delaware applicable to contracts made and wholly to be performed
in that state.
10.9 Final Agreement. This Agreement, together with the Securities
---------------
Purchase Agreement and all other agreements entered into by the parties
hereto pursuant to the Securities Purchase Agreement, constitutes the
complete and final agreement of the parties concerning the matters referred
to herein, and supersedes all prior agreements and understandings.
10.10 Execution in Counterparts. This Agreement may be executed in any
-------------------------
number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute one
instrument.
10.11 No Strict Construction. The language used in this Agreement will
----------------------
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be used against any
party.
12
The parties hereto have executed this Amended and Restated Registration
Rights Agreement on the date first set forth above.
BLUE RHINO CORPORATION
By: /s/ Xxxxx Xxxx
------------------------------------
Xxxxx Xxxx, Chief Executive Officer
PLATINUM PROPANE HOLDING, L.L.C.
By: /s/ Xxxxx X. XxXxxxxxx
------------------------------------
Xxxxx X. XxXxxxxxx, Manager
FORSEYTH TECHNOLOGY/XXXX PARTNERS VENTURE LEASING,
L.P.
By:___________________________
Name:_________________________
Title:________________________
Xxxxx X. Xxxx, not personally but as attorney in
fact for the persons listed on Exhibit A hereto
pursuant to that certain power of attorney granted
under the Consent, Agreement and Waiver executed
by each of them.
/s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxx, Attorney in Fact
13
