EXHIBIT 4.3
[EXECUTION COPY]
WARRANT AND REGISTRATION RIGHTS AGREEMENT
BETWEEN
CORNERSTONE PROPANE PARTNERS, L.P.
AND
NORTHWESTERN CORPORATION
Dated as of June 30, 2000
WARRANT AND REGISTRATION RIGHTS AGREEMENT
THIS WARRANT AND REGISTRATION RIGHTS AGREEMENT ("THIS WARRANT
AGREEMENT") is made as of June 30, 2000, by and between CORNERSTONE PROPANE
PARTNERS, L.P., a Delaware limited partnership (the "COMPANY"), and NORTHWESTERN
CORPORATION, a Delaware corporation ("NOR").
RECITALS:
A. The Company has requested NOR to enter into a certain
Guaranty Agreement to be executed and delivered effective as of the date
hereof (the "GUARANTY AGREEMENT"), pursuant to which NOR has agreed with Bank
of America, N.A., as agent for lenders, to guarantee up to $40,000,000
principal amount of secured bank debt of Cornerstone Propane, L.P., an
affiliate of the Company, under a Refunding Credit Agreement dated as of
November 20, 1998, as the same has been and may be amended, restated,
supplemented or otherwise modified from time to time (the "CREDIT AGREEMENT").
B. As provided in that certain Commitment Letter dated June
30, 2000 between the Company and NOR (the "COMMITMENT LETTER"), and in order
to induce NOR to enter into the Guaranty Agreement, the Company has agreed to
enter into this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
(a) CERTAIN DEFINITIONS. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"AFFILIATE" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
"BUSINESS DAY" means any day which is neither a Saturday or
Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York, New York, Los Angeles, California or Sioux Falls, South
Dakota.
"CLOSING DATE" means August 2, 2000.
"COMMON UNITS" means limited partnership interests of the
Company defined as "Common Units" in the Partnership Agreement and having the
rights and obligations specified with respect to Common Units in the Partnership
Agreement.
"COMPANY" is defined in the Preamble.
"CREDIT AGREEMENT" is defined in the Recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXERCISE PRICE" means the exercise price per Warrant, which
initially is $0.10 per Common Unit, subject to adjustment from time to time in
accordance with this Agreement.
"FAIR MARKET VALUE PER UNIT" means the arithmetic mean of the
closing sales prices of a Common Unit of the Company as reported by the New York
Stock Exchange Composite Transactions for each of the five trading days
immediately preceding the date of determination or, if not so trading, the fair
value as determined in good faith by the General Partner.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States.
"GENERAL PARTNER" means Cornerstone Propane GP, Inc., the
Managing General Partner of the Company, or any successor as Managing General
Partner of the Company.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY AGREEMENT" is defined in the Recitals.
"HOLDER" means NOR or any subsequent holder of Warrants or
Warrant Units, to which the Warrants or Warrant Units are transferred in
accordance with the provisions of this Agreement.
"PARTNERSHIP AGREEMENT" means the Amended and Restated
Agreement of Limited Partnership of Cornerstone Propane Partners, L.P. dated as
of December 17, 1996, as the same has been and may be amended, restated,
supplemented or otherwise modified from time to time.
"PERSON" means any natural person, corporation, partnership,
limited liability company, firm, association, trust or any other entity, whether
acting in an individual, fiduciary or other capacity.
"PIK UNITS" means Common Units, if any, issued to NOR as
contemplated by the Commitment Letter or otherwise in payment of interest, fees
or other charges payable by the Company to NOR in respect of advances made by
NOR pursuant to the Guaranty Agreement or other credit support furnished by NOR
for the benefit of the Company from time to time.
"RULE 144" means Rule 144 promulgated by the SEC under the
Securities Act.
"SEC" means the United States Securities and Exchange
Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TERMINATION DATE" is defined in SECTION 6.
"WARRANT CERTIFICATES" means the certificates evidencing the
Warrants in the form of EXHIBIT A-1 attached hereto.
"WARRANT UNITS" means the Common Units issued upon exercise of
a Warrant by the Holder thereof, together with any other securities which such
Holder may be issued in respect of any such securities, including, without
limitation, by way of any dividend or other distribution on such securities, any
split-up of such securities or a recapitalization, merger, consolidation, share
exchange, reorganization
or other transaction or series of related transactions in which such securities
are changed into or exchanged for securities of another limited partnership,
limited liability company or corporation.
"WARRANTS" means the 381,875 warrants to purchase one Common
Unit of the Company each (I.E., an aggregate of 381,875 Common Units) issued to
NOR on the Closing Date pursuant to this Agreement, and each warrant issued in
substitution or exchange therefor, or in subsequent substitutions or exchanges,
which warrants shall be subject to adjustment and shall have the rights,
privileges and limitations set forth in this Agreement.
SECTION 2. ISSUANCE AND EXERCISE OF WARRANTS.
(a) The Company agrees that it shall issue and deliver to NOR on
the Closing Date Warrant Certificates evidencing in the
aggregate 381,875 Warrants, each dated the Closing Date and
registered in such name or names as NOR may specify by timely
written notice to the Company (it being understood that in the
absence of such specification the Company shall issue and
deliver to NOR a single Warrant Certificate evidencing 381,875
Warrants in the name of NOR). A Warrant may be exercised by
NOR or any other Holder only in accordance with the terms and
conditions of this Agreement and at any time during the period
beginning on the date on which such Warrant becomes
exercisable pursuant to SECTION 2(b) hereof and ending on the
Termination Date.
(b) Each of the 381,875 Warrants shall be immediately exercisable
on the date of issuance.
(c) Subject to the terms and conditions hereof, Warrants that are
exercisable in accordance with this SECTION 2 may be exercised
pursuant to this SECTION 2 upon surrender to the Company at
its office designated for such purpose (the address of which
is set forth in SECTION 13) of the Warrant Certificate or
Certificates evidencing the Warrant(s) to be exercised and
upon payment to the Company of the aggregate Exercise Price
for the number of Warrants which are then exercised. Upon such
surrender of Warrant Certificates and payment of the Exercise
Price in cash or by check payable to the Company in
immediately available funds, the Company shall issue and cause
to be delivered with all reasonable dispatch (and in any event
within ten Business Days after such surrender and payment) to
or upon the written order of the Holder, and registered in the
name of the Holder or as it may otherwise specify, a
certificate or certificates for the number of full Warrant
Units issuable upon the exercise of such Warrants, together
with such other property (including cash) and securities as
may then be deliverable upon such exercise, including cash for
fractional Warrant Units as provided in SECTION 11, PROVIDED
that all such Warrant Units shall be subject to the
restrictions set forth in SECTION 5 of this Agreement. Such
certificate or certificates shall be deemed to have been
issued and the Person so named therein shall be deemed to have
become a holder of record of such Warrant Units as of the date
of the surrender of such Warrant Certificates.
(d) Subject to the terms and conditions hereof, the Warrants shall
be exercisable at the election of the Holders thereof, either
in full or from time to time in part, and in the event that a
Warrant Certificate is exercised in respect of fewer than all
of the Warrants evidenced by such Warrant Certificate at any
time prior to the Termination Date, a new Warrant Certificate
evidencing the remaining Warrant or Warrants will be issued
and delivered pursuant to the provisions of this SECTION 2(d).
All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled. The Company shall keep
copies of this Agreement and any notices received hereunder
available for inspection during normal business hours at its
office. The Company will furnish, at its expense, copies of
this Agreement and all such notices, upon request, to any
Holder of any Warrant Certificates.
SECTION 3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
UNITS ISSUABLE. The Exercise Price and the number of Warrant Units issuable upon
the exercise of each Warrant are subject to adjustment from time to time upon
the occurrence of any of the events enumerated in this SECTION 3.
(a) ADJUSTMENT FOR CHANGE IN PARTNERSHIP INTERESTS OF THE COMPANY.
If the Company (i) makes a distribution on its Common Units
payable in any class of its partnership interests, (ii)
subdivides its outstanding Common Units into a greater number
of units, (iii) combines its outstanding Common Units into a
smaller number of units, (iv) makes a distribution on its
Common Units in units of its partnership interests other than
Common Units, or (v) issues to holders of its Common Units by
reclassification of its Common Units any other partnership
units, then the number of units for which any Warrant may be
exercised in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant
thereafter exercised may receive the aggregate number and kind
of partnership interests of the Company which it would have
owned immediately following such action if such Warrant had
been exercised immediately prior to such action. Such
adjustment shall be made successively whenever any event
listed above shall occur, and shall become effective
immediately after the record date in the case of a
distribution and immediately after the effective date in the
case of a subdivision, combination or reclassification. If
after an adjustment made pursuant to the second preceding
sentence a Holder of a Warrant upon exercise of such Warrant
may receive partnership interests of two or more classes of
partnership interests of the Company, the General Partner of
the Company shall determine in the good faith exercise of its
reasonable business judgment the allocation of the adjusted
Exercise Price between the classes of partnership interests.
After such allocation, the exercise privilege and the Exercise
Price of each class of partnership interests shall thereafter
be subject to adjustment on terms comparable to those in this
SECTION 3.
(b) REORGANIZATION OF THE COMPANY. In the event of any capital
reorganization, recapitalization or reclassification of the
partnership interests of the Company, or consolidation or
merger of the Company with another entity in which the Company
does not continue as the surviving partnership or, if it does
so continue, its Common Units do not remain outstanding, any
acquisition of all of the outstanding Common Units of the
Company by means of a unit exchange, or the sale, lease,
transfer, conveyance or other disposition of all or
substantially all of its assets to another entity, then, as a
condition of and concurrently with such reorganization,
recapitalization, reclassification, consolidation, merger,
unit exchange or sale, lease, transfer, conveyance or other
disposition, lawful and adequate provision shall be made
whereby the Holders of the Warrant Certificates shall
thereafter have the right to purchase and receive, on the
basis and upon the terms and conditions specified in this
Agreement and in lieu of the Warrant Units immediately
theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, such units,
partnership interests, securities, cash or property as would
have been issued or payable with respect to or in exchange for
the number of Warrant Units purchasable and receivable
immediately prior to such transaction upon the exercise of the
rights represented by the Warrant Certificates if such Warrant
Certificates
had been exercised immediately prior to such transaction. In
any such case appropriate provision shall be made with respect
to the rights and interests of the Holders of the Warrants to
the end that the provisions of this Agreement (including,
without limitation, provisions for adjustment of the Exercise
Price and of the number and type of securities purchasable
upon the exercise of the Warrants) shall thereafter be
applicable, as nearly as may be, in relation to any units,
partnership interests, securities, cash or property thereafter
deliverable upon the exercise of the Warrants. The Company
shall not effect any such consolidation, merger, share
exchange or sale, lease, transfer, conveyance or other
disposition unless prior to or simultaneously with the
consummation thereof the successor entity (if other than the
Company) resulting from such consolidation or merger, unit
exchange or the entity purchasing or otherwise acquiring such
assets or units (i) shall assume by a supplemental Warrant
Agreement, reasonably satisfactory in form, scope and
substance to the Holders (which shall be mailed or delivered
to the Holders of the Warrants at the last address of such
Holders appearing on the books of the Company) the obligation
to deliver to such Holders such units, partnership interests,
securities, cash or property as, in accordance with the
foregoing provisions, such Holders may be entitled to purchase
(the "SUBSTITUTE SECURITIES") and (ii) shall assume all of the
other obligations of the Company set forth in this Agreement,
including, without limitation, those under SECTION 23, which
shall apply to such Substitute Securities MUTATIS MUTANDIS.
Following such assumption such obligations shall apply to the
Substitute Securities rather than to the Warrant Units. If the
issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an Affiliate of
the formed, surviving, transferee or lessee entity, such
issuer shall join the supplemental Warrant Agreement. The
foregoing provisions of this paragraph shall similarly apply
to successive reorganizations, recapitalizations,
reclassifications, consolidations, mergers, share exchanges,
sales, leases, transfers, conveyances or other dispositions.
(c) CERTAIN OTHER DISTRIBUTIONS. If at any time or from time to
time the Company shall take a record of the holders of its
Common Units for the purpose of entitling them to receive any
distribution of
(i) cash (other than a cash distribution
payable out of earnings or earned surplus legally
available therefor, to the extent, but only to the
extent, that the aggregate of all such distributions
paid or declared after June 30, 2000 does not exceed
the net income of the Company earned subsequent to
that date determined in accordance with GAAP), or
(ii) any evidence of indebtedness (other
than convertible securities), any of its units or
partnership interests (other than Common Units) or
any other securities or property of any nature
whatsoever (other than cash), or
(iii) any warrants or rights to subscribe
for or to purchase any evidences of its indebtedness
(other than convertible securities), any of its units
or partnership interests (other than Common Units) or
any other securities or property of any nature
whatsoever,
then lawful and adequate provision shall be made whereby the
Holders of the Warrant Certificates shall thereafter have the
right to exercise the rights represented by the Warrants and
to receive upon such exercise (A) such number of Warrant Units
as would have been purchasable and receivable immediately
prior to the taking of such record
upon the exercise of the rights represented by the Warrant
Certificates if such Warrant Certificates had been exercised
immediately prior to the taking of such record, and (B) such
cash, evidences of indebtedness, units, partnership interests,
securities, or other property as would have been distributed
with respect to such number of Warrant Units if the same had
been held by such Holders on the date of the taking of such
record.
(d) ISSUANCE OF ADDITIONAL COMMON UNITS. If at any time or from
time to time the Company shall (except as hereinafter
provided) issue additional Common Units for a consideration
less per unit than the Fair Market Value Per Unit in effect
immediately prior to issuance of such additional Common Units,
then the number of Warrant Units issuable upon exercise of a
Warrant shall be adjusted to that number obtained by
multiplying the number of Warrant Units issuable upon exercise
of a Warrant immediately prior to such adjustment by a
fraction the numerator of which shall be the number of Common
Units outstanding immediately prior to the issuance of such
additional Common Units plus the number of additional Common
Units so issued, and the denominator of which shall be the
number of Common Units outstanding immediately prior to the
issuance of such additional Common Units plus the number of
additional Common Units which the aggregate consideration paid
for the total number of such additional Common Units so issued
would purchase at the Fair Market Value Per Unit in effect
immediately prior to issuance of such additional Common Units.
The date as of which Fair Market Value Per Unit shall be
determined for purposes of this SECTION 3(d) shall be the
earlier of the date on which the Company enters into a firm
contract for the issuance of such additional Common Units, and
the date of actual issuance thereof. This SECTION 3(d) shall
not apply to any issuance of Additional Common Units for which
an adjustment is made pursuant to the foregoing SECTION 3(a)
or as to any issuance pursuant to exercise of warrants or
other rights, or conversion of convertible securities, with
respect to which an adjustment has previously been made
pursuant to SECTION 3(e) upon issuance of such warrants,
rights or convertible securities, as the case may be, or any
warrants or other rights to obtain the same. No adjustment
shall be required pursuant to this SECTION 3(d) with respect
to any issuance of additional Common Units pursuant to any
employee option or similar incentive plan of the Company in
effect on the date hereof or agreed to by all Holders if put
into effect after the date hereof.
(e) ISSUANCE OF WARRANTS OR OTHER RIGHTS. If at any time or from
time to time the Company shall take a record of the holders of
its Common Units for the purpose of entitling them to receive
any distribution of, or shall otherwise issue, any warrants or
other rights to subscribe for, or purchase any additional
Common Units or any convertible securities convertible into
additional Common Units, and the consideration per unit for
which additional Common Units may at any time thereafter be
issuable pursuant to all such warrants and other rights or
pursuant to the terms of such convertible securities, as the
case may be, is less per unit than the Fair Market Value Per
Unit in effect immediately prior to issuance of such
additional Common Units, then the number of Warrant Units
issuable upon exercise of a Warrant shall be adjusted as
provided in SECTION 3(d), on the basis that (i) the maximum
number of additional Common Units issuable pursuant to all
such warrants or other rights or upon conversion of all such
convertible securities shall be deemed to have been issued as
of the date for determination of the Fair Market Value Per
Unit as hereinbelow provided, and (ii) the aggregate
consideration for such maximum number of additional Common
Units shall be deemed to be the minimum receivable pursuant to
such warrants or rights, or upon conversion of such
convertible securities, as
the case may be. The date as of which Fair Marker Value Per
Unit shall be determined for purposes of this SECTION 3(e)
shall be the earliest of the date on which the Company shall
take a record of the holders of its Common Units, the date on
which the Company enters into a firm contract for the issuance
of such warrants, rights or convertible securities, and the
date of actual issuance thereof.
(f) SUPERSEDING ADJUSTMENTS. If, at any time after an adjustment
of the number of Warrant Units issuable upon exercise of a
Warrant shall have been made pursuant to the foregoing SECTION
3(e) on the basis of issuance of warrants or other rights, or
of convertible securities, or after an adjustment of the
number of Warrant Units issuable upon exercise of a Warrant
shall have been made pursuant to this SECTION 3(f),
(i) such warrants or rights, or the
conversion right in such convertible securities,
shall expire and a portion thereof shall not have
been exercised or converted, as the case may be,
and/or
(ii) the consideration per unit for which
Common Units are issuable pursuant the such warrants
or rights, or upon conversion of such convertible
securities, shall be increased solely by virtue of
provisions therein for an automatic increase in such
consideration upon the arrival of a specified date or
the occurrence of a specified event,
such previous adjustment shall be rescinded and annulled, and
the additional Common Units deemed issued by virtue of the
computation made in connection with such adjustment shall no
longer be deemed to have been issued. Thereupon a
re-computation shall be made as to the effect of such
warrants, rights or convertible securities, on the basis of
(iii) treating the number of additional
Common Units, if any, theretofore actually issued or
issuable pursuant to such exercise or conversion as
having been issued on the date or dates of exercise
or conversion for the consideration actually received
or receivable therefor, and
(iv) treating any such warrants or rights or
any such convertible securities which then remain
outstanding as having been granted or issued
immediately after the time of such increase of the
consideration per unit for which Common Units are
issuable under such warrants, rights or convertible
securities;
and, if and to the extent called for by the foregoing
provisions of this SECTION 3 on the basis aforesaid, a new
adjustment of the number of Warrant Units issuable upon
exercise of a Warrant shall be made, which new adjustment
shall supersede the previous adjustment so rescinded and
annulled.
(g) CONSIDERATION. For purposes of this SECTION 3, the
consideration per unit for any additional Common Units
issuable pursuant to any warrants or other rights shall
include the consideration for issuing such warrants or rights,
as well as the consideration payable upon exercise of the
same; and the consideration per unit for any additional Common
Units issuable upon conversion of any convertible securities
shall include the
consideration for issuing such convertible securities
(including any consideration paid for issuance of warrants or
rights to subscribe for such convertible securities), as well
as the consideration payable upon exercise of the right of
conversion contained therein. The consideration paid or
payable in connection with any Common Units issued in an
underwritten public offering, or Rule 144A offering, shall be
determined without deducting underwriting discounts or
commissions.
SECTION 4. COVENANTS.
(a) PRIVATE COMPANY INFORMATION. If, during the term of this
Agreement, the Company shall cease to be subject to the
periodic reporting obligations of Section 15(d) of the
Exchange Act, the Company will furnish, or will cause to be
furnished, to each Holder copies of the following financial
statements, reports and information:
(i) promptly when available and in any event within 120
days after the close of each fiscal year, a
consolidated balance sheet at the close of such
fiscal year, and related consolidated statements of
operations and cash flows for such fiscal year, of
the Company and its subsidiaries (with comparable
information at the close of and for the prior fiscal
year), certified (in the case of consolidated
statements) without qualification by nationally
recognized independent public accountants; and
(ii) promptly when available and in any event within 45
days after the close of each fiscal quarter,
consolidated balance sheets at the close of such
fiscal quarter, and consolidated statements of
operations and cash flows for such fiscal quarter and
for the period commencing at the close of the
previous fiscal year and ending with the close of
such fiscal quarter, of the Company and its
subsidiaries (with comparable information at the
close of and for the corresponding fiscal quarter of
the prior fiscal year and for the corresponding
portion of such prior fiscal year), certified by the
chief financial or executive officer of the General
Partner.
(b) PUBLIC COMPANY INFORMATION. So long as the Company is subject
to the periodic reporting requirements of Section 15(d) of the
Exchange Act, the Company will:
(i) file with the SEC on or before the required date all
regular or periodic reports required pursuant to the
Exchange Act and deliver to each Holder, promptly
upon its becoming available, one copy of each report,
notice or proxy statement sent by the Company to its
Limited Partners generally, and of each regular or
periodic report filed pursuant to the Exchange Act
and any registration statement or prospectus pursuant
to the Securities Act filed by the Company with (A)
the SEC or (B) any national securities exchange; and
(ii) use its reasonable commercial efforts to make
publicly available information concerning the Company
sufficient to allow a Holder to dispose in accordance
with this Agreement of all or a portion of the
Warrant Units pursuant to Rule 144 (or any successor
provision).
(c) GOVERNMENTAL APPROVALS. The Company will use its reasonable
commercial efforts, and will cooperate with the Holders to,
secure all necessary consents, approvals, authorizations and
exemptions from all Governmental Authorities in connection
with the transactions contemplated hereby and the exercise of
the Warrants and the issuance of Common Units upon exercise of
the Warrants.
(d) TERMINATION OF RIGHTS UPON SALE TO THE PUBLIC. Notwithstanding
anything to the contrary set forth herein, the obligations of
the Company set forth in this SECTION 4 shall terminate with
respect to any Holder (including an underwriter) acquiring any
Warrants or Warrant Units pursuant to a registration statement
declared effective by the SEC under the Securities Act or in a
sale effected pursuant to Rule 144.
SECTION 5. RESTRICTIONS ON TRANSFERS.
(a) TRANSFERS OF WARRANTS. A Holder may not dispose of or transfer
any Warrants now or hereafter owned, whether by sale,
assignment, gift, pledge, encumbrance or otherwise, except
pursuant to an available exemption from registration under
Federal and state securities laws PROVIDED, that this Section
shall not apply to a surrender of Warrant Certificates to the
Company in connection with the Warrants evidenced thereby.
(b) RESTRICTED SECURITIES. Warrants are transferable only in
accordance with SECTION 5(a).
(c) TRANSFERS OF WARRANT UNITS. A Holder may not dispose of or
transfer any Warrant Units now or hereafter owned, whether by
sale, assignment, gift, pledge, encumbrance or otherwise,
except pursuant to a registered sale under Federal securities
laws or pursuant to an available exemption from registration
under Federal and state securities laws.
SECTION 6. TERMINATION. This Agreement shall terminate and all
outstanding Warrants shall be canceled on the first to occur of (a) the fifth
anniversary of the Closing Date (the "TERMINATION DATE") and (b) the exercise or
cancellation of all Warrants issued pursuant to this Agreement.
SECTION 7. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) The Company shall from time to time register the initial
issuance and any transfer of any outstanding Warrant
Certificates made in accordance with SECTION 5 hereof in a
Warrant register to be maintained by the Company upon
surrender of such Warrant Certificates accompanied by a
written instrument or instruments of transfer in form
reasonably satisfactory to the Company, duly executed by the
Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney;
PROVIDED, HOWEVER, that prior to effecting such transfer, the
transferee shall agree (in a form reasonably satisfactory to
the Company) to be bound by the terms of this Agreement. Upon
any such registration of transfer, a new Warrant Certificate
shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be canceled. Until the Warrant
Certificate is transferred on the Warrant register of the
Company, the Company may treat the Holder as shown in the
Warrant register as the absolute owner of the Warrant
Certificate for all purposes, and notwithstanding any notice
to the contrary. The Company agrees that it will make the
Warrant register available for inspection by the Holders
during normal business hours at its office.
(b) By acceptance thereof, the Holders agree that, unless and
until the Company shall receive an opinion of counsel,
reasonably satisfactory to it in form, scope and substance
that such is not necessary to ensure compliance with the
securities laws, each Warrant Certificate and, subject to
SECTION 23 hereof, each certificate representing Warrant
Units, will bear the following legend (the "SECURITIES
LEGEND"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE
REGISTRATION PROVISIONS OF SAID ACT OR LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A WARRANT AGREEMENT, DATED AS
OF JUNE 30, 2000, BETWEEN CORNERSTONE PROPANE
PARTNERS, L.P. (THE "COMPANY") AND NORTHWESTERN
CORPORATION, A COPY OF WHICH IS ON FILE AT THE MAIN
OFFICE OF THE COMPANY. ANY SALE OR TRANSFER OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT
TO THE TERMS OF THAT AGREEMENT AND ANY SALE OR
TRANSFER OF SUCH SECURITIES IN VIOLATION OF SAID
AGREEMENT SHALL BE INVALID."
(c) Warrant Certificates may be exchanged at the option of the
Holder(s) thereof when surrendered to the Company at its
office for another Warrant Certificate or other Warrant
Certificates of like tenor and representing in the aggregate a
like number of Warrants, including, without limitation, upon
an adjustment in the Exercise Price or in the number of
Warrant Units purchasable upon exercise of the Warrants.
Warrant Certificates surrendered for exchange shall be
canceled.
SECTION 8. PAYMENT OF TAXES. The Company will pay all stamp,
transfer and similar taxes in connection with the issuance, sale and delivery of
the Warrants hereunder, as well as all such taxes attributable to the initial
issuance of Warrant Units upon the exercise of Warrants and payment of the
appropriate Exercise Price. The Company will not, however, be required to pay
any such taxes imposed in connection with any transfer of any Warrants or
Warrant Units or any Federal or state income taxes payable in respect of any
Holder's purchase, ownership, sale, transfer, exercise or other disposition of
Warrants or Warrant Units.
SECTION 9. MUTILATED OR MISSING WARRANT CERTIFICATES. Upon
receipt by the Company of evidence reasonably satisfactory to the Company (which
shall include an affidavit of the Holder) that any Warrant Certificate shall
have been mutilated, lost, stolen or destroyed and, in the case of loss, theft
or destruction, a customary indemnity agreement from the Holder of such Warrant
Certificate and (if such Holder is other than NOR or an affiliate of NOR) a lost
certificate indemnity bond from a reputable bonding or insurance company in an
amount acceptable to the Company, the Company shall issue, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants.
SECTION 10. RESERVATION OF WARRANT UNITS. The Company will at
all times that any Warrant is exercisable reserve and keep available, free from
preemptive or similar rights, out of the aggregate of its authorized but
unissued Common Units, for the purpose of enabling it to satisfy any obligation
to issue Warrant Units upon exercise of Warrants, the maximum number of units of
each class of partnership interest constituting a part of the Warrant Units
which may then be deliverable upon the exercise of all outstanding Warrants. The
Company or, if appointed, the transfer agent for units of each class of
partnership interest of the Company (the "TRANSFER AGENT") and every subsequent
transfer agent for any units of the Company's partnership interest issuable upon
the exercise of the Warrants will be irrevocably authorized and directed at all
times to reserve such number of authorized units as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any units of the
Company's partnership interests issuable upon the exercise of the rights of
purchase represented by the Warrants. The Company will furnish such Transfer
Agent a copy of all notices of adjustments, and certificates related thereto,
transmitted to Holders pursuant to SECTION 12. Before taking any action which
would cause an adjustment pursuant to SECTION 3 to the maximum number of Warrant
Units deliverable upon the exercise of all outstanding Warrants pursuant to
SECTION 2(a), the Company shall cause to be authorized additional Common Units
such that the sum of such maximum number of Common Units deliverable upon
exercise of all outstanding Warrants and the number of Common Units outstanding
as of such date does not exceed the number of Common Units authorized pursuant
to the Company's Partnership Agreement.
SECTION 11. FRACTIONAL INTERESTS. The Company shall not be
required to issue fractional Warrant Units on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of Warrant Units which shall be issuable upon exercise
thereof shall be computed on the basis of the aggregate number of Warrant Units
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Unit would, except for the provisions of this SECTION 11, be issuable on
the exercise of any Warrants (or specified portion thereof), the Company shall
pay an amount in cash equal to the Fair Market Value Per Unit calculated as of
the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
SECTION 12. NOTICE TO WARRANT HOLDERS. Upon any adjustment of
the Exercise Price or number or type of securities purchasable upon exercise of
the Warrants pursuant to SECTION 3, the Company shall promptly thereafter (i)
cause to be filed with the Company a
certificate of the chief financial officer of the General Partner of Company
setting forth the Exercise Price and the number and type of securities or other
property constituting Warrant Units after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and, in the case of an adjustment pursuant to SECTION
3(b), setting forth the number and type of securities or other property
constituting Warrant Units (or portion thereof) issuable, after such adjustment
in the Exercise Price or number of Warrant Units, upon exercise of the Warrants,
upon exercise of a Warrant and payment of the adjusted Exercise Price, and (ii)
cause to be given to each of the Holders of the Warrant Certificates written
notice of such adjustments, together with a copy of such certificate. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be given under the other provisions of this SECTION 12. In
the event:
(a) the Company shall authorize the payment of any distribution to
holders of Common Units of the Company; or
(b) of any capital reorganization, reclassification,
recapitalization, consolidation, merger, or unit exchange or
sale, lease, transfer, conveyance or other disposition to
which the adjustment provisions of SECTION 3(b) apply, or a
purchase, tender or exchange offer for Common Units or other
securities constituting part of the Warrant Units (whether by
the Company or some other party); or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(d) the Company proposes to take any action that would require an
adjustment of the Exercise Price or number of Warrant Units
for which the Warrants are exercisable;
then the Company shall cause to be given to each of the Holders, at least 20
days prior to the applicable record date hereinafter specified (or promptly in
the case of events for which there is no record date), a written notice stating
(as applicable) (i) the date as of which the holders of record of Common Units
entitled to receive any such dividends or distribution are to be determined,
(ii) the date on which any such reclassification, recapitalization or
reorganization, consolidation, merger, unit exchange, sale, lease, transfer,
conveyance or disposition to which the adjustment provisions of SECTION 3(b)
apply or any such dissolution, liquidation or winding up is expected to become
effective or be consummated, or (iii) the initial expiration date set forth in
any purchase, tender or exchange offer for partnership interests, and the date
as of which it is expected that holders of record of partnership interests or
other securities constituting a part of the Warrant Units (or securities into
which the Warrant Units may be converted) shall be entitled to exchange such
shares or securities for securities or other property, if any, deliverable upon
such reclassification, recapitalization, reorganization, consolidation, merger,
amalgamation, share exchange, sale, lease, conveyance, transfer, disposition,
dissolution, liquidation or winding up.
SECTION 13. NOTICES. All notices, consents, approvals,
agreements and other communications provided hereunder shall be in writing and
delivered personally, by mail, by overnight courier (providing proof of
delivery) or by telecopy and shall be sufficiently given to NOR and the Company
if addressed or delivered to them at the following addresses:
If to Company: Cornerstone Propane Partners, L.P.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to NOR: Northwestern Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxx, XX 00000-0000
Attention: General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or if to any other Holder at such address for such Holder as may appear in the
Warrant register, or at such other address as any party may designate to any
other party by written notice. All such notices and communications shall be
deemed to have been duly given: (i) at the time delivered by hand, if personally
delivered, (ii) when received, if deposited in the mail, postage prepaid, (iii)
when transmission is verified, if telecopied, and (iv) on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.
SECTION 14. SUCCESSORS. Except as otherwise expressly provided
herein or in the Warrants, all covenants and agreements of this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns, including those by operation of law,
merger or consolidation. In addition, except as otherwise expressly provided in
the Warrants, and whether or not any express assignment has been made, the
provisions of this Agreement which are for NOR's benefit as a purchaser or
Holder of a Warrant or Warrant Units are also for the benefit of, and
enforceable by, any subsequent Holder of such a Warrant or Warrant Units.
SECTION 15. GOVERNING LAW. This Agreement, the Warrants and
the Warrant Units shall be governed by those provisions of the Delaware Revised
Uniform Limited Partnership Act, 6 Del. Section 17-101 et. seq., and Article 8
of the Delaware Uniform Commercial Code, which are necessarily applicable to
securities issued by a Delaware limited partnership and otherwise shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the internal laws of said state.
SECTION 16. BENEFITS OF THIS AGREEMENT. Except as otherwise
provided in SECTION 14 hereof, nothing in this Agreement shall be construed to
give to any Person other than the Company and the Holders any legal or equitable
right, remedy or claim under this Agreement; this Agreement shall be for the
sole and exclusive benefit of the Company and the Holders.
SECTION 17. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
SECTION 18. AMENDMENT; WAIVERS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived and
the Company may take any action herein prohibited, or fail to take any action
herein required to be performed by it if, but only if, the Company has obtained
the written consent of the Holders of (x) Warrant Certificates
evidencing the right to purchase a majority of the sum of all Warrant Units not
yet issued and outstanding for which Warrants are currently exercisable, plus
(y) all outstanding Warrant Units (other than any such sold in a registered
public offering under the Securities Act). No failure or delay by any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall a waiver of a particular right or remedy on one occasion be deemed a
waiver of any other right or remedy or a waiver of the same right or remedy on
any subsequent occasion.
SECTION 19. JURISDICTION. Each of the parties hereto hereby
agrees that any legal action or proceeding against such party with respect to
this Agreement, the Warrants or the Warrant Units may be brought in the courts
of the State of New York in the Borough of Manhattan, City and State of New
York, or of the United States of America for the Southern District of New York
as the other party may elect, and, by execution and delivery hereof, such party
accepts and consents for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and agrees that such
jurisdiction shall be exclusive, unless waived by the other party in writing,
with respect to any action or proceeding brought by such party against the other
party. Each of the parties hereto irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of the copies thereof by certified mail, return receipt requested,
postage prepaid, to it at its address set forth herein, such service to become
effective upon the earlier of (i) the date ten calendar days after such mailing
and (ii) any earlier date permitted by applicable law.
SECTION 20. SPECIFIC PERFORMANCE. The Company and the Holders
recognize that the rights of the Holder(s) and the Company under this Agreement
are unique and, accordingly, the Holder(s) and the Company shall, in addition to
such other remedies as may be available to any of them at law or in equity, have
the right to enforce their rights hereunder and thereunder by actions for
injunctive relief and specific performance to the extent permitted by law. The
Company and the Holders agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and the Company and each of the Holders hereby agrees to waive
in any action for specific performance the defense that a remedy at law would be
adequate. This Agreement is not intended to limit or abridge any rights of the
Holder(s) or the Company which may exist apart from this Agreement.
SECTION 21. ENTIRE AGREEMENT. The parties hereto agree that
this Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings between them as to such subject matter; and there are no
restrictions, agreements, arrangements, oral or written, between any or all of
the parties relating to the subject matter hereof which are not fully expressed
or referred to herein or therein.
SECTION 22. SEVERABILITY. If any provision of this Agreement
shall be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution, statute, rule or public policy, or for
any other reason, such circumstances shall not have the effect of rendering the
provision or provisions in question, invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute, rule or public policy, but
this Agreement shall be reformed and construed in any such jurisdiction or case
as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
SECTION 23. REGISTRATION UNDER SECURITIES ACT OF 1933, AS
AMENDED.
(a) As used in this SECTION 23, the following terms shall have the
following meanings:
(i) The terms "REGISTER," "REGISTERED" and "REGISTRATION"
refer to the registration effected by preparing and
filing a registration statement in compliance with
the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement.
(ii) "REGISTRABLE SECURITIES" shall mean the Common Units
issuable upon exercise of the Warrants (or in
substitution or exchange for any or all such Common
Units, or in subsequent substitutions or exchanges)
and the PIK Units, if any shall be outstanding;
PROVIDED, HOWEVER, that securities shall only be
treated as Registrable Securities if and only for so
long as they (A) have not been disposed of pursuant
to a registration statement declared effective by the
SEC, (B) have not been sold in a transaction exempt
from the registration and prospectus delivery
requirements of the Securities Act so that all
transfer restrictions and restrictive legends with
respect thereto are removed upon the consummation of
such sale, and (C) are held by a Holder (whether the
original Holder or a Holder that is a permitted
transferee pursuant to SECTION 23(j)).
(iii) "REGISTRATION EXPENSES" shall mean all expenses
incurred by the Company in complying with SECTION
23(b) OR (c) hereof, including, without limitation,
all registration, qualification and filing fees,
printing expenses, escrow fees, fees and expenses of
counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or
required by any such registration (including Selling
Expenses for each Holder).
(iv) "REGISTRATION PERIOD" shall have the meaning ascribed
to such term in SECTION 23(d).
(v) "SELLING EXPENSES" shall mean all reasonable fees,
and the expenses, of one firm of legal counsel for
all Holders whose Registrable Securities are to be
included in a registration.
(b) DEMAND REGISTRATION RIGHTS.
(i) Subject to the provisions contained in this SECTION
23(b), any Holder or Holders may request (each, a
"REQUESTING HOLDER") on not more than two (2)
occasions in writing (a "DEMAND REQUEST") that the
Company effect the registration under the Securities
Act of that number of Common Units constituting
Registrable Securities requested and owned by the
Requesting Holder(s) (a "DEMAND REGISTRATION");
PROVIDED, HOWEVER, the Registrable Securities to be
included in such Demand Registration comprise at
least 100,000 Common Units (subject to adjustment as
herein provided); PROVIDED, FURTHER, that the Company
will in no event be required to effect more than one
Demand Registration for the Holders in total in any
12-month period. Upon receipt of a Demand Request,
the Company will cause to be included in a
registration statement on an appropriate form under
the Securities Act, filed with the SEC within 90
days after receiving a Demand Request (the "REQUIRED
FILING DATE"), such Registrable Securities as may be
requested by Joining Holders joining in such request
pursuant to SECTION 23(b)(ii). The Company shall use
its reasonable best efforts to cause any such
registration statement to be declared effective by
the SEC as promptly as practicable after such filing
but in any event not later than 150 days (or such
longer period, not in excess of 240 days, during
which the Company shall be diligently pursuing having
such registration statement so declared effective)
following the date of the Demand Request.
(ii) If at any time the Company proposes to register
Common Units for the account of the Requesting
Holders pursuant to SECTION 23(b)(i) then the Company
shall give written notice of such proposed filing to
the Holders of Warrant Certificates as soon as
practicable (but in no event less than 30 days before
the anticipated filing date). Upon the written
request of any such Holder, received by the Company
no later than the 10th business day after receipt by
such Holder of the notice sent by the Company (each
such Holder a "JOINING HOLDER"), to register, on the
same terms and conditions as the securities otherwise
being sold pursuant to such Demand Registration, any
of its Registrable Securities, the Company will use
its best efforts to cause the Registrable Securities
to be included in the securities to be covered by the
registration statement proposed to be filed by the
Company on the same terms and conditions as any
similar securities included therein, all to the
extent requisite to permit the sale or other
disposition by each Holder of the Registrable
Securities so registered.
(iii) A registration will not count as a Demand
Registration until it has become effective; PROVIDED,
HOWEVER, that if, after it has become effective, an
offering of Registrable Securities pursuant to a
registration statement is terminated by any stop
order, injunction, or other order of the SEC or other
governmental agency or court, such registration
pursuant thereto will be deemed not to have been
effected and will not count as a Demand Registration.
(iv) Unless the Requesting Holder otherwise elects, all
Demand Registrations will be underwritten offerings.
With respect to any offering of Registrable
Securities pursuant to a Demand Registration in the
form of an underwritten offering, the Company shall
select an investment banking firm or firms of
national standing to manage the underwritten
offering, subject to the consent of the Requesting
Holders of a majority of the Registrable Securities
for such registration, which consent shall not be
withheld unreasonably.
(v) Securities to be sold for the account of any Person
or entity (including the Company) other than
Requesting Holders or Joining Holders may be included
in a Demand Registration unless the managing
underwriter or underwriters shall advise the
Requesting Holders in writing that the inclusion of
such securities will materially and adversely affect
the price or success of the offering (a "MATERIAL
ADVERSE EFFECT"). Furthermore, in the event that the
managing underwriter or underwriters shall advise the
Requesting Holders that even after exclusion of all
securities of the other Persons or entities pursuant
to the immediately preceding sentence, the amount of
Registrable Securities proposed to be included in
such
Demand Registration by Requesting Holders and
Joining Holders is sufficiently large to cause a
Material Adverse Effect, the number of Common Units
to be included in such Demand Registration shall be
allocated among all Holders pro rata based on the
ratio the number of Common Units each such Holder
requests be included bears to the total number of
Common Units of all Holders that have been requested
be included in such registration.
(c) PIGGY-BACK REGISTRATION RIGHTS. (i) The Company agrees that
if, at any time, and from time to time, commencing on the date
that is six (6) months from the Closing Date and ending on the
date that is five (5) years from the Closing Date, the General
Partner of the Company shall authorize the filing of a
registration statement under the Securities Act (other than a
registration statement on Form X-0, Xxxx X-0 or any other form
or successor form that does not include substantially the same
information as would be required in a form for the general
registration of securities) in connection with the proposed
offer of any of its securities by it or any of its
unitholders, the Company shall, (A) promptly notify the
Holders in writing that such registration statement will be
filed and that Registrable Securities will be included in such
registration statement at any Holder's request, (B) cause such
registration statement to cover all such Registrable
Securities for which the Holder thereof requests inclusion,
(C) use its reasonable best efforts to cause such registration
statement to become effective as soon as practicable and (D)
take all other action necessary under any Federal or state law
or regulation of any governmental authority to permit all such
Registrable Securities to be sold or otherwise disposed of,
and will maintain such compliance with each such Federal and
state law and regulation of any governmental authority for the
period necessary for the Holders to effect the proposed sale
or other disposition, but in no event greater than six (6)
months.
(ii) Notwithstanding any other provision in this Warrant
Agreement, the Company may at any time abandon or
delay any registration commenced by the Company. In
the event of such an abandonment by the Company, the
Company shall not be required to continue
registration of the Registrable Securities requested
by the Holder for inclusion and the Holder shall
retain the right to request inclusion of the
Registrable Securities in accordance with SECTION
23(c)(i).
(iii) Securities to be sold for the account of any Person
or entity (other than the Company) requesting
inclusion thereof in a registration pursuant to this
SECTION 23(c) shall be included in such registration
unless the managing underwriter or underwriters shall
advise the Company and the Holders requesting such
inclusion in writing that the inclusion of all such
securities will materially and adversely affect the
price or success of the offering. In the event that
the managing underwriter or underwriters shall so
advise the Company and the requesting Holders, the
number of Common Units to be included in such
registration shall be allocated (a) as between the
Company and such Holders based on the ratio the
number of Common Units the Company and each such
Holder respectively propose be included bears to the
total number of Common Units the Company and all such
Holders have proposed be included, and (b) among all
Holders pro rata based on the ratio the number of
Common Units each such Holder requests be included
bears to the total number of Common Units of all
Holders that have been requested be included in such
registration.
(d) OBLIGATIONS. Whenever required under this Warrant to include
Registrable Securities in a Company registration statement,
the Company shall, as expeditiously as is reasonably possible:
(i) use its reasonable best efforts to keep such
registration, and any qualification, exemption or
compliance under state securities laws which the
Company determines to obtain, continuously effective
until the Holders have completed the distribution
described in the registration statement relating
thereto or six (6) months, whichever is shorter. The
period of time during which the Company is required
hereunder to keep the Registration Statement
effective being referred to herein as the
"REGISTRATION PERIOD"; and
(ii) advise the Holders:
(A) when such registration statement or any amendment
thereto has been filed with the SEC and when such registration
statement or any post-effective amendment thereto has become
effective;
(B) of any request by the SEC for amendments or
supplements to such registration statement or the prospectus
included therein or for additional information;
(C) of the issuance by the SEC of any stop order
suspending the effectiveness of such registration statement or
the initiation of any proceedings for such purpose;
(D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Registrable Securities included therein for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(E) of the happening of any event that requires the
making of any changes in such registration statement or the
prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in the
light of the circumstances under which they were made) not
misleading;
(iii) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of any
Registration Statement at the earliest possible time;
(iv) furnish to each Holder, without charge, at least one
copy of such registration statement and any
post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so
requests in writing, all exhibits (including those
incorporated by reference) in the form filed with the
SEC;
(v) during the Registration Period, deliver to each
Holder, without charge, as many copies of the
prospectus included in such registration statement
and any amendment or supplement thereto as such
Holder may reasonably request; and the Company
consents to the use, consistent with
the provisions hereof, of the prospectus or any
amendment or supplement thereto by each of the
selling Holders of Registrable Securities in
connection with the offering and sale of the
Registrable Securities covered by the prospectus or
any amendment or supplement thereto. In addition,
upon the reasonable request of the Holder and subject
in all cases to confidentiality protections
reasonably acceptable to the Company, the Company
will meet with the Holder or Holders of more than 50%
of the Warrant Units included in such registration at
the Company's headquarters to discuss all information
relevant for disclosure in such registration
statement covering the Registrable Securities, and
will otherwise cooperate with any Holder conducting
an investigation for the purpose of reducing or
eliminating such Holder's exposure to liability under
the Securities Act, including the reasonable
production of information at the Company's
headquarters;
(vi) during the Registration Period, deliver to each
Holder, without charge, (A) as soon as practicable
(but in the case of the annual report of the Company
to its unitholders, within 120 days after the end of
each fiscal year of the Company) one copy of: (1) its
annual report to its unitholders, if any (which
annual report shall contain financial statements
audited in accordance with generally accepted
accounting principles in the United States of America
by a firm of certified public accountants of
recognized standing); (2) if not included in
substance in its annual report to unitholders, its
annual report on Form 10-K (or similar form); (3)
each of its quarterly reports to its unitholders,
and, if not included in substance in its quarterly
reports to unitholders, its quarterly report on Form
10-Q (or similar form), and (4) a copy of the full
Registration Statement (the foregoing, in each case,
excluding exhibits); and (B) upon reasonable request,
all exhibits excluded by the parenthetical to the
immediately preceding clause (4), and all other
information prepared by the Company that is generally
available to the public;
(vii) prior to any public offering of Registrable
Securities pursuant to any Registration Statement,
register or qualify or obtain an exemption for offer
and sale under the securities or blue sky laws of
such United States jurisdictions as any of the
Holders whose Registrable Securities are included in
such registration reasonably requests in writing,
PROVIDED that the Company shall not for any such
purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general
service of process in any such jurisdiction, and do
any and all other acts or things reasonably necessary
or advisable to enable the offer and sale in such
jurisdictions of the Registrable Securities covered
by such registration statement;
(viii) cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to any
Registration Statement free of any restrictive
legends to the extent not required at such time and
in such denominations and registered in such names as
Holders may request at least three (3) business days
prior to sales of Registrable Securities pursuant to
such registration statement;
(ix) upon the occurrence of any event contemplated by
SECTION 23(d)(ii)(E) above, the Company shall
promptly prepare a post-effective amendment
to such registration statement or a supplement to the
related prospectus, or file any other required
document so that, as thereafter delivered to
purchasers of the Registrable Securities included
therein, the prospectus will not include any untrue
statement of a material fact or omit to state any
material fact necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading; and
(x) use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and will
make generally available to the Holders not later
than 45 days (or 90 days if the fiscal quarter is the
fourth fiscal quarter) after the end of its fiscal
quarter in which the first anniversary date of the
effective date of such registration statement occurs,
an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act.
(e) FURNISH INFORMATION. It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this
Warrant Agreement with respect to the Registrable Securities
of any selling Holder that such Holder shall furnish to the
Company such information regarding the Holder, the Registrable
Securities held by the Holder, and the intended method of
disposition of such securities as shall be reasonably required
by the Company to effect the registration of such Holder's
Registrable Securities.
(f) EXPENSES OF COMPANY REGISTRATION. The Company shall bear and
pay all Registration Expenses incurred in connection with any
registration, filing or qualification of Registrable
Securities with respect to the registration pursuant to
SECTION 23(b) OR (c) for each Holder relating or apportionable
thereto. Notwithstanding the foregoing, each Holder shall pay
all Registration Expenses that such Holder is required to pay
under applicable law.
(g) UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of the Company's partnership
interests, the Company shall not be required under SECTION
23(c) to include any Holder's Registrable Securities in such
underwriting unless such Holder accepts the terms of the
underwriting as agreed upon between the Company and the
underwriters selected by it (or by other Persons entitled to
select the underwriters), and then only in such quantity as
the underwriters determine in their reasonable discretion will
not jeopardize the success of the offering by the Company. If
the total number of securities, including Registrable
Securities, requested by unitholders to be included in such
offering exceeds the number of securities sold other than by
the Company that the underwriters determine in their
reasonable discretion is compatible with the success of the
offering, then the Company shall be required to include in the
offering only that number of such securities, including
Registrable Securities, which the underwriters determine in
their reasonable discretion will not jeopardize the success of
the offering (the securities so included to be apportioned pro
rata among the selling unitholders having registration rights
according to the total number of securities entitled to be
included therein owned by such selling unitholders, or in such
other proportions as mutually agreed to by such selling
unitholders). For purposes of the preceding parenthetical
expression concerning apportionment, for any selling
unitholder who is a holder of Registrable Securities and is a
partnership or corporation, the partners, retired partners and
stockholders of such holder, or the estates and family members
of any such partners and retired partners and any trusts for
the benefit of any of the foregoing Persons shall be deemed to
be a single "selling unitholder", and any
pro-rata reduction with respect to such "selling unitholder"
shall be based upon the aggregate number of units carrying
registration rights owned by all entities and individuals
included in such "selling unitholder", as defined in this
sentence. The number of Registrable Securities to be included
in a registration pursuant to this Agreement shall not be
limited by units sought to be included by unitholders with no
registration rights.
(h) DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying
any such registration as the result of any controversy that
might arise with respect to the interpretation or
implementation of this Warrant Agreement.
(i) INDEMNIFICATION. In the event that any Registrable Securities
are included in a registration statement under this Warrant
Agreement:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any
underwriter (as defined in the Securities Act) for
such Holder and each Person, if any, who controls
such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the
Securities Act, or the Exchange Act, insofar as such
losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon
any of the following statements, omissions or
violations (collectively a "VIOLATION"): (A) any
untrue statement or alleged untrue statement of a
material fact contained in such registration
statement, including any preliminary prospectus or
final prospectus contained therein or any amendments
or supplements thereto or (B) the omission or alleged
omission to state therein a material fact required to
be stated therein, or necessary to make the
statements therein not misleading, and the Company
will pay to each such Holder, underwriter or
controlling Person, as incurred, any legal or other
expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that
the indemnity agreement contained in this SECTION
23(i)(i) shall not apply to amounts paid in
settlement of any such loss, claim, damage,
liability, or action if such settlement is effected
without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss,
claim, damage, liability, or action to the extent
that it arises out of or is based upon a violation
which occurs in reliance upon and in conformity with
written information furnished expressly for use in
connection with such registration by any such Holder,
underwriter or controlling Person.
(ii) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company and the
General Partner, each of their directors, each of
their officers who has signed the registration
statement, each Person, if any, who controls the
Company within the meaning of the Securities Act, any
underwriter, any other Holder selling securities in
such registration statement and any controlling
Person of any such underwriter or other Holder,
against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing
Persons may become subject, under the Securities Act,
or the Exchange Act, insofar as such losses, claims,
damages, or liabilities (or actions in respect
thereto)
arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity
with written information furnished by such Holder
expressly for use in connection with such
registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably
incurred by any Person intended to be indemnified
pursuant to this SECTION 23(i)(ii), in connection
with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that
the indemnity agreement contained in this SECTION
23(i)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the
consent of the Holder, which consent shall not be
unreasonably withheld; PROVIDED, that, in no event
shall any indemnity under this SECTION 23(i)(ii)
exceed the net proceeds (after deducting the
underwriters' discount but before deducting other
expenses) from the offering received by such Holder.
(iii) Promptly after receipt by an indemnified party under
this SECTION 23 of notice of the commencement of any
action (including any governmental action), such
indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party
under this SECTION 23, deliver to the indemnifying
party a written notice of the commencement thereof
and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying
party similarly notified, to assume the defense
thereof with counsel selected by the indemnifying
party and approved by the indemnified party (whose
approval shall not be unreasonably withheld);
PROVIDED, HOWEVER, that an indemnified party
(together with all other indemnified parties which
may be represented without conflict by one counsel)
shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the
indemnifying party, if representation of such
indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to
actual or potential differing interests between such
indemnified party and any other party represented by
such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party
within a reasonable time of the commencement of any
such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of
any liability to the indemnified party under this
SECTION 23, but the omission so to deliver written
notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified
party otherwise than under this SECTION 23.
(iv) To the extent permitted by law, if the
indemnification provided for in this SECTION 23 is
held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to
any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such
loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection
with the statements or omissions that resulted in
such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of
the indemnified party shall be determined by
reference to, among other
things, whether the untrue or alleged untrue
statement of a material fact or the omission to state
a material fact relates to information supplied by
the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent
such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution
contained in the underwriting agreement entered into
in connection with the underwritten public offering
are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall
control (it being understood and agreed that silence
in the underwriting agreement as to matters of
indemnification and contribution between the Company
and the Holders shall not constitute a conflict).
(vi) The obligations of the Company and Holders under this
SECTION 23(i) shall survive the completion of any
offering of Registrable Securities in a registration
statement under this Warrant Agreement, and
otherwise.
(j) PERMITTED TRANSFEREES. The rights to cause the Company to
register Registrable Securities granted to the Holders by the
Company under this Warrant Agreement may be assigned in full
by a Holder in connection with a transfer by such Holder of
its Registrable Securities if: (i) such Holder gives prior
written notice to the Company; (ii) the transferee agrees in
writing to comply with the terms and provisions of this
Warrant Agreement; (iii) such transfer of Registrable
Securities is otherwise in compliance with this Warrant
Agreement; and (iv) such transfer of Registrable Securities is
otherwise effected in accordance with applicable securities
laws. Except as specifically permitted by this SECTION 23(j),
the rights of a Holder with respect to Registrable Securities
as set out in this SECTION 23 shall not be transferable to any
other Person, and any attempted transfer shall cause all
rights of such Holder therein to be forfeited.
(k) TERMINATION OF REGISTRATION RIGHTS. In addition, the right of
any Holder to request inclusion in any registration pursuant
to this SECTION 23 and the obligations of the Company to keep
any registration statement effective for the benefit of such
Holder shall terminate at such time as all of the Registrable
Securities held by such Holder may be sold under Rule 144(k)
within a 60 day period.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of
the day and year first above written.
CORNERSTONE PROPANE PARTNERS, L.P.
By: CORNERSTONE PROPANE GP, INC.
its general partner
By:
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Name:
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Title:
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NORTHWESTERN CORPORATION
By:
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Name:
--------------------------------
Title:
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EXHIBIT A-1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SAID ACT OR LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A WARRANT
AND REGISTRATION RIGHTS AGREEMENT, DATED AS OF JUNE 30, 2000, BETWEEN
CORNERSTONE PROPANE PARTNERS, L.P. (THE "COMPANY") AND NORTHWESTERN CORPORATION,
A COPY OF WHICH IS ON FILE AT THE MAIN OFFICE OF THE COMPANY. ANY SALE OR
TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS
OF THAT AGREEMENT AND ANY SALE OR TRANSFER OF SUCH SECURITIES IN VIOLATION OF
SAID AGREEMENT SHALL BE INVALID.
Certificate No. __________ __________ Warrants
Warrant Certificate
CORNERSTONE PROPANE PARTNERS, L.P.
This Warrant Certificate certifies that [______________________],
a _______________corporation (the "PURCHASER"), or its registered assigns, is
the registered holder of the number of Warrants (the "WARRANTS") set forth above
to purchase limited partnership interests of the Company defined as "Common
Units" in the Partnership Agreement and having the rights and obligations
specified with respect to Common Units in the Partnership Agreement (the
"COMMON UNITS"), of CORNERSTONE PROPANE PARTNERS, L.P., a Delaware limited
partnership (the "COMPANY"). Each Warrant entitles the holder upon exercise to
receive from the Company one fully paid and nonassessable Common Unit (a
"WARRANT UNIT") upon the payment by the Purchaser to the Company of the initial
exercise price (the "EXERCISE PRICE") of $0.10, payable in lawful money of the
United States of America, upon surrender of this Warrant Certificate and payment
of the Exercise Price at the office of the Company designated for such purpose,
subject to the conditions set forth herein and in the Warrant Agreement
referenced below. The Exercise Price and number and type of Warrant Units
issuable upon exercise of the Warrants are subject to adjustment upon the
occurrence of certain events, as set forth in the Warrant Agreement.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants, and are issued or to be issued pursuant to a
Warrant and Registration Rights Agreement, dated as of June 30, 2000 (the
"WARRANT AGREEMENT"), which has been duly executed and delivered by the Company
and Northwestern Corporation, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and are hereby referred to for a
description of the rights, obligations and duties hereunder of the Company and
the holders of the Warrants (the words "holders" or "holder" meaning the
registered holders or registered holder). By acceptance of this Warrant
Certificate, the holder hereof agrees to be bound by the Warrant Agreement.
Copies of the Warrant Agreement may be obtained by the holder hereof upon
written request to the Company. The Warrants evidenced by this Warrant
Certificate are exercisable at any time and from time to time during the period
beginning on the date hereof and ending on August 2, 2005 (the "EXPIRATION
DATE").
The holder of Warrants evidenced by this Warrant Certificate may
exercise such Warrants under and pursuant to the terms and conditions of the
Warrant Agreement by surrendering this Warrant Certificate, with the form of
election to purchase attached hereto (and by this reference made a part hereof)
properly completed and executed, together with payment of the Exercise Price in
cash at the office of the Company designated for such purpose. In the event that
any exercise of Warrants evidenced hereby shall be for less than the total
number of Warrants evidenced hereby and except as otherwise provided in the
Warrant Agreement, there shall be issued by the Company to the holder hereof or
its registered assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof and the number of Warrant
Units issuable upon the exercise of each Warrant may, subject to certain
conditions, be adjusted. No fractional Warrant Units will be issued upon the
exercise of any Warrant, but the Company will pay the cash value thereof
determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, for another Warrant
Certificate or Warrant Certificates of like tenor evidencing in the aggregate a
like number of Warrants.
The Company may deem and treat the registered holder(s) thereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing made hereon) for the purpose of any exercise
hereof, of any distribution to the holder(s) hereof and for all other purposes,
and the Company shall not be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a limited partner of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its duly authorized officer and has caused its
corporate seal to be affixed hereunto or imprinted hereon.
Dated:
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CORNERSTONE PROPANE PARTNERS, L.P.
By: CORNERSTONE PROPANE GP, INC.
its general partner
By:
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Name:
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Title:
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[CORPORATE SEAL]
