PRIMO WATER CORPORATION COMMON STOCK PURCHASE WARRANT
Exhibit 3
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
Dated: , 2010
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Shares | |
| Certificate No. W- |
PRIMO WATER CORPORATION
COMMON STOCK PURCHASE WARRANT
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT for value received, subject to the terms and conditions set forth herein,
, or its/his/her permitted assigns (the “Holder”), is entitled to purchase up to
shares of Common Stock (the “Common Stock”) of Primo Water Corporation, a Delaware
corporation (the “Company”), at a purchase price per share as set forth in Section 1.b. (as
adjusted from time to time as herein provided, the “Purchase Price”) upon presentation of this
Warrant and payment of the Purchase Price for the shares of Common Stock purchased at the principal
office of the Company or at such other place as shall have been designated by the Company. The
number of shares of Common Stock which are purchasable hereunder, as adjusted pursuant to the
provisions below, is hereinafter referred to as the “Warrant Shares.” This Warrant is being issued
to the Holder in connection with, and as a condition to, a loan made by the Holder to the Company,
evidenced by that certain Subordinated Convertible Promissory Note dated as of the date hereof made
by the Company in favor of the Holder (the “Note”).
This Warrant is subject to the following provisions:
1. Exercise of Warrant; Purchase Price.
a. This Warrant may be exercised, in whole or in part, at the Holder’s election, at any
time prior to
, 2020.
The Holder may exercise this Warrant by delivery to the
Company of a written notice of such exercise and the tender to the Company of the Purchase
Price for the Warrant Shares purchasable pursuant to such exercise of this Warrant. In case
of an exercise to purchase less than all Warrant Shares purchasable hereunder, the Company
shall cancel this Warrant and shall execute and deliver a new warrant of like tenor for the
balance of the shares which may be purchased hereunder.
b. The Purchase Price per share of Common Stock issuable upon exercise of this Warrant
shall be equal to either (i) if a Qualified Public Offering (as defined below) has occurred
as of the time of exercise, then eighty-percent (80%) of the purchase price per share of
Common Stock in the Qualified Public Offering, or (ii) if no Qualified Public Offering has
occurred as of the time of exercise, then One and 25/100 Dollars ($1.25) per share of Common
Stock (as adjusted from time to time as herein provided). As used herein, “Qualified Public
Offering” means the closing of an initial public offering of shares of Common Stock
resulting in aggregate proceeds to the Company of an amount greater than Thirty Million
Dollars ($30,000,000).
c. At any time prior to, or in connection with, an initial public offering of shares of
Common Stock, the Holder shall have the right to pay all or a portion of the aggregate
Purchase Price by making a “Cashless Exercise” pursuant to this Section 1.c., in which case
the portion of the Purchase Price to be so paid shall be paid by reducing the number of
shares of Common Stock otherwise issuable pursuant to the exercise of this Warrant by an
amount equal to (i) the aggregate Purchase Price to be so paid divided by (ii) the fair
market value per share of Common Stock as determined by the Board of Directors of the
Company in good faith as of the business day immediately preceding the date of exercise of
such Warrant.
The number of shares of Common Stock to be issued to the Holder as a result of a
Cashless Exercise will therefore be (x) the number of shares of Common Stock to be
purchased, minus (y) the number of shares of Common Stock with respect to which the
Purchase Price is being paid by Cashless Exercise pursuant to this Section 1.c.
2. Compliance with Securities Laws. The Holder of this Warrant, by its/his/her
acceptance hereof, represents and acknowledges that this Warrant is acquired for the Holder’s own
account for investment purposes only and that this Warrant and the Warrant Shares issuable upon
exercise hereof, respectively, have not been registered under the Securities Act of 1933, as
amended. Accordingly, any transfer of this Warrant and such Warrant Shares shall be subject to
legal restrictions. The Holder agrees that it/he/she will not offer for sale or sell, assign or
pledge, or otherwise dispose of (except through exercise) this Warrant or any Warrant Shares issued
to the Holder pursuant to exercise hereof, except in accordance with applicable securities laws.
3. Shares of Common Stock in Reserve. The Company agrees at all times to reserve a
sufficient number of authorized but unissued shares of Common Stock for the purposes of the
exercise of this Warrant, and to take such action as may be necessary to ensure that all Warrant
Shares issued upon exercise of this Warrant will be duly and validly authorized and issued and
fully paid and nonassessable.
4. No Voting or Dividend Rights: This Warrant shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company, and no dividend or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby or the Warrant
Shares which may be purchased hereunder until and unless, and except to the extent that, this
Warrant shall be exercised.
5. Adjustment of Purchase Price and Number of Shares. The following adjustments to
the Purchase Price shall apply (1) upon and after a Qualified Public Offering, to the Purchase
Price established pursuant to Section 1.b.(i), and (2) prior to a Qualified Public Offering, to the
Purchase Price established pursuant to Section 1.b.(ii).
a. The Purchase Price hereof shall be subject to adjustment from time to time. In case
the Company shall (i) pay a dividend on its Common Stock in Common Stock, (ii) subdivide its
outstanding shares of Common Stock, or (iii) combine its outstanding shares of Common Stock
into a smaller number of shares, then, in such an event, the Purchase Price in effect
immediately prior thereto shall be adjusted proportionately so that the adjusted Purchase
Price will bear the same relation to the Purchase Price in effect immediately prior to any
such event as the total number of shares of Common Stock outstanding immediately prior to
any such event shall bear to the total number of shares of Common Stock outstanding
immediately after such event. An adjustment made pursuant to this Subsection 5.a. (a) shall
become effective retroactively immediately after the record date in the case of a dividend
and (b) shall become effective immediately after the effective date in the case of a
subdivision or combination. The Purchase Price, as so adjusted, shall be readjusted in the
same manner upon the happening of any successive event or events described herein.
b. Upon each adjustment of the Purchase Price pursuant to Subsection 5.a., the number
of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock, rounded down to the nearest whole share, obtained by
multiplying (i) the number of shares of Common Stock purchasable immediately prior to such
adjustment upon the exercise of this Warrant, (ii) by the Purchase Price in effect prior to
such adjustment, and (iii) dividing the product so obtained by the new Purchase Price. For
avoidance of doubt, the number of shares of Common Stock purchasable upon exercise of this
Warrant shall be adjusted in the same manner as provided in this Subsection 5.b. in
connection with any change in the Purchase Price from the Purchase Price established
pursuant to Section 1.b.(ii) to the Purchase Price established pursuant to Section 1.b.(i)
upon a Qualified Public Offering.
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c. In case of any capital reorganization of the Company, or of any reclassification of
the Common Stock, this Warrant shall be exercisable after such capital reorganization or
reclassification upon the terms and conditions specified in this Warrant, for the number of
shares of stock or other securities
which the Common Stock issuable (at the time of such capital reorganization or
reclassification) upon exercise of this Warrant would have been entitled to receive upon
such capital reorganization or reclassification if such exercise had taken place immediately
prior to such action. The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock shall not be deemed to
be a reclassification of the Common Stock of the Company for the purposes of this Subsection
5.c.
d. Whenever the Purchase Price is adjusted as herein provided, the Company shall
compute the adjusted Purchase Price in accordance with Subsection 5.a. and shall prepare a
certificate signed by its chief financial officer setting forth the adjusted Purchase Price
and showing in reasonable detail the method of such adjustment and the fact requiring the
adjustment and upon which such calculation is based, and such certificate shall forthwith be
forwarded to the Holder.
e. The form of this Warrant need not be changed because of any change in the Purchase
Price pursuant to this Section 5, and any Warrant issued after such change may state the
same Purchase Price and the same number of shares of Common Stock as are stated in this
Warrant as initially issued. The Company, however, may at any time in its sole discretion
(which shall be conclusive) make any change in the form of this Warrant that it may deem
appropriate and that does not affect the substance thereof. Any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
6. Replacement Warrant for Lost Certificate: Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to the
Company, and reimbursement to the Company of all reasonable expenses incidental thereto (and upon
surrender and cancellation of this Warrant if mutilated), the Company will execute and deliver a
new warrant of like tenor, in lieu of this Warrant.
7. Assignability and Binding Effect: This Warrant shall be binding upon and inure to
the benefit of any and all successors and assigns of the Holder and the Company; provided, however,
that no Assignment (as defined below) may be made by the Holder except for an Assignment to an
Approved Party (as defined below). Any Assignment made without first complying with the provisions
of this Section 7 shall be void and of no legal effect.
8. Amendment and Waiver. Except as otherwise provided herein, the provisions of this
Warrant may be amended and the Company may take any action herein prohibited, or omit to perform
any act herein required to be performed by it, only if the Company has obtained the prior written
consent of the Holder.
9. Entire Agreement. This Warrant (together with the Note) supersedes any and all
other understandings and agreements, either oral or in writing, between the parties hereto with
respect to the subject matter hereof, and constitutes the only agreement between the parties with
respect to such subject matter.
10. Definitions. As used herein:
a. “Affiliates” means with respect to any Person, any Person directly or indirectly
controlling, controlled by, or under common control with such Person. For the purposes of
this definition, “control” (including correlative meanings, such as the terms “controlling”
“controlled by” and “under common control with”), as applied to any Person, means the
possession, directly, indirectly or beneficially, of either: (i) fifty-one (51%) equity
ownership; or (ii) the power to direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting securities or by contract or
otherwise.
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b. “Approved Party” means: (i) Affiliates; (ii) parents (including step-parents and
adoptive parents) and children (including step-children, adopted children and children of
the half-blood); (iii) partners or retired partners of a partnership, or members or retired
members in a limited liability company; or (iv) Persons to whom an Assignment is made with
the prior written approval of the Company. The
Company’s approval shall not be unreasonably withheld, provided that, it may refuse
such approval if the proposed assignee is reasonably believed by the Company to be a
competitor of the Company.
c. “Assignment” means any sale, assignment, gift, pledge, encumbrance or other transfer
or disposition of this Warrant;
d. “Person” means an individual, a partnership, a corporation, a limited liability
company, 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.
11. Governing Law. THIS WARRANT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED UNDER, THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW OF SUCH STATE.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Company has executed this Warrant under seal effective as of the date
first above written.
| COMPANY: PRIMO WATER CORPORATION |
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Acknowledged and accepted:
By:
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Its:
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