THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR
SALE UNLESS REGISTERED UNDER SAID ACT OR UNLESS THE HOLDER OF THIS WARRANT
DELIVERS TO BLUE RHINO CORPORATION AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO BLUE RHINO CORPORATION STATING THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
Dated: January 1, 1998
WARRANT
To Purchase _______________ Shares of Common Stock (Subject to adjustment
herein)
Expiring December 31, 2008
THIS IS TO CERTIFY THAT, for value received, ________________ ("Original
Warrantholder") or his respective registered assign is entitled to purchase from
Blue Rhino Corporation, a Delaware corporation (the "Corporation"), at any time
and from time to time prior to 5:00 P.M., Chicago, Illinois time, on December
31, 2008, at the principal office of the Corporation which is currently 000
Xxxxxxxxx Xxxxx Xxxxx, Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000 (or such other
address as the Corporation shall specify by notice to the Holder) at the
Exercise Price, the number of shares of Common Stock, with a par value of $0.001
per share (the "Common Stock"), of the Corporation shown above, all subject to
adjustment and upon the terms and conditions as hereinafter provided, and is
entitled also to exercise the other appurtenant rights, powers and privileges
hereinafter described.
This Warrant shall be accorded the same registration rights as the series
of warrants issued pursuant to a Unit Purchase Agreement dated October 11, 1995
entered into between the parties therein and the Corporation as more fully set
forth in that certain Amended and Restated Registration Rights Agreement dated
as of April 30, 1997, which amends and restates in its entirety that certain
Registration Rights Agreement dated as of December 1, 1994.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise and Payment.
(a) Method of Exercise. To exercise this Warrant in whole or in part,
the registered holder of this Warrant (the "Holder") shall deliver to the
Corporation on or prior to 5:00 P.M., Chicago, Illinois time, on December 31,
2000, at the principal office of the
Corporation, (a) this Warrant, (b) a written notice, in substantially the form
of the subscription notice (the "Subscription Notice") attached hereto, of such
Holder's election to exercise this Warrant, which notice shall specify the
number of shares of Common Stock to be purchased or converted into, as the case
may be, the denominations of the share certificate or certificates desired and
the name or names in which such certificates are to be registered, and (c)
payment to the Corporation of the amount equal to the product of the then
applicable Exercise Price multiplied by the number of shares of Common Stock
then being purchased pursuant to one of the payment methods permitted under
Section 1.1(b) below.
(b) Method of Payment. Payment shall be made either (1) by cash,
money order, certified or bank cashier's check, (2) by wire transfer, (3) by
converting the Warrant, or any portion thereof, into Common Stock pursuant to
Section 1.1 (c) below ("Warrant Conversion") or (4) any combination of the
foregoing at the option of the Holder.
(c) Payment by Warrant Conversion. Subject to any limitations set
forth in this Warrant, the Holder may exercise the purchase right represented by
this Warrant with respect to a particular number of shares of Common Stock
subject to this Warrant and elect to pay for the Underlying Common Stock through
Warrant Conversion as defined in Section 1.1(b), by specifying such election in
the Subscription Notice. In such event, the Corporation shall deliver to the
Holder (without payment by the Holder of any Exercise Price or any cash or other
consideration) that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the value of this Warrant (or the specified portion
hereof) on the Exercise Date, which value shall be determined by subtracting (A)
the aggregate Exercise Price of the Underlying Common Stock immediately prior to
the exercise of the Warrant from (B) the aggregate Fair Market Value of the
Underlying Common Stock issuable upon exercise of this Warrant (or the specified
portion hereof) on the Exercise Date, by (y) the Fair Market Value of one share
of Common Stock on the Exercise Date. For purposes of this Section 1, "Fair
Market Value" of a share of Common Stock as of a particular date shall mean:
(i) If the Corporation's Common Stock is Publicly Traded, then
the fair market value of a share of Common Stock as of the last
Business Day immediately prior to the Exercise Date. "Publicly
Traded" shall mean such stock is listed on any national securities
exchange (as defined in the Exchange Act) or quoted on NASDAQ.
(ii) If the Corporation stock is not Publicly Traded, then as
determined in good faith by the Board of Directors upon review of the
relevant factors; provided, however, that if the Exercise Date falls
within one day prior to the effective date of such registration
statement, the fair market value of a share of Common Stock will be
deemed to be the public offering price per share provided for in such
registration statement.
(d) Mechanics. The Corporation shall, as promptly as practicable and
in any event within three days after delivery of a Subscription Notice as
described above, execute and
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deliver or cause to be executed and delivered, in accordance with such
Subscription Notice, a certificate or certificates representing the aggregate
number of shares of Common Stock specified in said Subscription Notice. The
share certificate or certificates so delivered shall be in such denominations as
may be specified in such Subscription Notice or, if such Subscription Notice
shall not specify denominations, in denominations of 100 shares each, and shall
be issued in the name of the Holder or such other name or names as shall be
designated in such Subscription Notice. Such certificate or certificates shall
be deemed to have been issued (and this Warrant or the portion thereof specified
in the Subscription Notice shall be deemed to have been exercised), and such
Holder or any other Person so designated to be named therein shall be deemed for
all purposes to have become a holder of record of such shares, as of the date
the aforementioned Subscription Notice is received by the Corporation, or
delivery thereof is refused (the "Exercise Date"). If this Warrant shall have
been exercised only in part, the Corporation shall, at the time of delivery of
the certificate or certificates, deliver to the Holder a new Warrant evidencing
the rights to purchase or convert the remaining shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant, or, at the request of the Holder, appropriate notation may be
made on this Warrant which shall then be refunded to the Holder. The Corporation
shall pay all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of share certificates and new Warrants,
except that, if share certificates or new Warrants shall be registered in a name
or names other than the name of the Holder, funds sufficient to pay all transfer
taxes payable as a result of such transfer shall be paid by the Holder at the
time of delivering the aforementioned notice of exercise or promptly upon
receipt of a written request of the Corporation for payment.
1.2 Shares to Be Fully Paid and Nonassessable. All shares of Common Stock
issued upon the exercise of this Warrant shall be validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder, and from
all taxes, liens and charges with respect to the issue thereof (other than
transfer taxes).
1.3 No Fractional Shares to Be Issued. The Corporation shall not be
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the
Corporation may pay to the Holder, in cash, an amount equal to such fraction of
the fair market value (as determined in good faith by the Board of Directors)
per share of outstanding Common Stock of the Corporation in the Business Day
immediately prior to the date of such exercise.
1.4 Share Legends. Each certificate for shares of Common Stock issued
upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
"This security has not been registered under the Securities Act of
1933 and may not be sold or offered for sale unless registered
pursuant to such Act or unless the holder hereof delivers to Blue
Rhino Corporation an opinion of counsel reasonably acceptable to Blue
Rhino Corporation stating that an exemption from
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such registration is available."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the holder of such certificate (who may be an employee of such
holder) and reasonably acceptable to the Corporation, the securities represented
thereby need no longer be subject to restrictions on resale under the Securities
Act. Each certificate for shares of Common Stock issued upon exercise of this
Warrant shall also bear any legends required under the Shareholders' Agreement,
dated as of December 1, 1994 between the Corporation, and certain investors and
management stockholders described therein, to the extent required thereby. Any
certificate issued at any time in exchange or substitution for any certificate
bearing such legend shall also bear such legend unless in the opinion of counsel
selected by the holder of such certificate (who may be an employee of such
holder) and reasonably acceptable to the Corporation, the restrictions contained
in such Shareholders' Agreement no longer apply because of the occurrence of one
or more of certain events described therein.
1.5 Reservation; Authorization. The Corporation has reserved and will
keep available for issuance upon exercise of the Warrant the total number of
shares of Common Stock deliverable upon exercise of the Warrant from time to
time outstanding. The issuance of the shares of Common Stock upon exercise of
the Warrant has been duly and validly authorized and, when issued and sold in
accordance with the Warrant, such shares of Common Stock will be duly and
validly issued, fully paid and nonassessable. The Corporation will take all
such actions as are necessary in order to insure the foregoing.
1.6 Result of Exercise. On the Exercise Date the rights of the holder of
such Warrant as such holder will cease and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock are to be
issued upon such exercise will be deemed to have become the holder or holders of
record of the shares of Common Stock represented thereby.
1.7 Not Close Books Until Exercise. The Corporation will not close its
books against the transfer of this Warrant or shares of Common Stock issued or
issuable upon exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
ARTICLE II
TRANSFER, EXCHANGE AND
REPLACEMENT OF WARRANT
2.1 Ownership of Warrant. The Corporation may deem and treat the Person
in whose name this Warrant is registered as the holder and owner hereof for all
purposes and shall not be affected by any notice to the contrary, until this
Warrant is presented for registration of transfer as provided in this Article
II.
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2.2 Transfer of Warrant. The Corporation agrees to maintain books for the
registration of transfers of the Warrants, and any transfer, in whole or in
part, of this Warrant and all rights hereunder shall be registered on such
books, upon surrender of this Warrant at the principal office of the Corporation
together with a written assignment of this Warrant duly executed by the Holder
or his, her or its duly authorized agent or attorney. The Warrants are
transferable pursuant to (i) public offerings registered under the Securities
Act, and (ii) Rule 144 of the Commission (or any similar rule then in force) if
such rule is available.
2.3 Division or Combination of Warrants. This Warrant may be divided or
combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Corporation, together
with a written notice specifying the names and denominations in which the new
Warrant or Warrants are to be issued, signed by the holders hereof and thereof
or their respective duly authorized agents or attorneys. Subject to compliance
with Section 2.2 as to any transfer which may be involved in the division or
combination, the Corporation shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
2.4 Loss, Theft, Destruction of Warrant Certificates. Upon receipt of
evidence reasonably satisfactory to the Corporation (an affidavit of the
registered holder will be satisfactory) of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction upon receipt of indemnity or security reasonably satisfactory to the
Corporation, or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Corporation will (at its expense) make and
deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the same aggregate
number of shares of Common Stock.
2.5 Expenses of Delivery of Warrants. The Corporation shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants and
Underlying Common Stock hereunder. If, pursuant to Section 2.2, the opinion of
counsel provides that registration is not required for the proposed exercise or
transfer of this Warrant or the proposed transfer of the Underlying Common Stock
and that the proposed exercise or transfer in the absence of registration would
require the Corporation to take any action including executing and filing forms
or other documents with the Commission or any state securities agency, or
delivering to the Holder any form or document in order to establish the right of
the Holder to effectuate the proposed exercise or transfer, the Corporation
agrees promptly, at its expense, to take any such action; and provided, further,
that the Corporation will reimburse the Holder in full for any expenses
(including but not limited to the fees and disbursements of such counsel, but
excluding brokers' commissions) incurred by the Holder or owner of Underlying
Common Stock on his, her or its behalf in connection with such exercise or
transfer of the Warrant or transfer of Underlying Common Stock.
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ARTICLE III
ANTIDILUTION PROVISIONS
3.1 Adjustments Generally. The Exercise Price and the number of shares of
Common Stock (or other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events, as provided in this Article III.
3.2 Exercise of Warrant. At any time and from time to time, any holder of
this Warrant may exercise all or any portion of this Warrant into the number of
shares of Common Stock computed by (i) multiplying the number of shares of
Common Stock sought to be purchased pursuant to this Warrant by Exercise Price
set forth in Section 3.3(a) and (ii) dividing the resulting product by the
Exercise Price then in effect.
3.3 Exercise Price.
(a) Exercise Price. The "Exercise Price" shall be equal to (i) prior
to the sale of Common Stock pursuant to a registered initial public offering
("IPO") by the Corporation, $1.645 per share and (ii) after an IPO (and the
application of the provisions of Section 3.6, if necessary), that price per
share at which the Common Stock of the Corporation is sold pursuant to the IPO.
In order to prevent dilution of the exercise rights granted to the holder of
this Warrant the Exercise Price will be subject to adjustment from time to time
pursuant to this Section 3.3 and Sections 3.5 and 3.6 below. For purposes of
this Section 3.3, the Corporation shall be deemed to have issued or sold Common
Stock as set forth in Section 3.4 below.
(b) Adjustment for Dilutive Events. If and whenever on or after the
original date of issuance of this Warrant the Corporation issues or sells, or in
accordance with Section 3.4 below is deemed to have issued or sold, any shares
of Common Stock for consideration per share less than the Exercise Price (the
"Diluted Share Price") in effect immediately prior to the time of such issue or
sale (a "Dilutive Event"), then forthwith upon the occurrence of any such
Dilutive Event the Exercise Price will be reduced so that the Exercise Price in
effect immediately following the Dilutive Event will equal the Diluted Share
Price. Notwithstanding the foregoing, (i) the issuance by the Corporation of up
to 3,500,000 shares of Common Stock, or securities convertible into or options
to acquire up to 3,500,000 shares of Common Stock, issued pursuant to the
Company's 1994 Stock Incentive Plan, (ii) the issuance of Common Stock upon
conversion of the Corporation's Series A Preferred Shares, (iii) the issuance of
up to 5% of the Common Stock of the company upon the exercise of options granted
to Blue Rhino Corporation distributors, (iv) the issuance of up to 5% of the
Common Stock of the Company upon the conversion of options issued pursuant to
stock option plans or grants to officers or employees approved by the Board of
Directors after an IPO, (v) the issuance of Common Stock upon exercise of
existing Warrants to acquire up to 17,844,244 shares of Common Stock issued
prior to the close hereof, or (vi) the issuance of $750,000 worth of Common
Stock to Bison Propane Bottle Exchange, L.L.C. at a price per share equal to the
purchase price for the Company's
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Common Stock in an IPO or in a private placement of not less than $10,000,000 of
the Company's Common Stock, shall not constitute a Dilutive Event. As used in
this Section 3.3(b) and in Section 3.4 below, the term "Common Stock" shall
include Common Stock Equivalents. Notwithstanding anything contained herein to
the contrary, the Exercise Price of this Warrant held by a particular holder
shall not be adjusted pursuant to this Article III in connection with a
particular Dilutive Event, or any subsequent Dilutive Event, if such holder of
this Warrant fails to purchase, after being offered by the Corporation the
opportunity to purchase, a percentage of the securities, rights or options, or
any combination thereof, the sale of which constitute the Dilutive Event, which
is equal to or greater than 75% of the percentage ownership of the Corporation's
Common Stock on a fully diluted basis held by such holder immediately prior to
such Dilutive Event. A Warrant which is no longer subject to adjustment as a
result of the preceding sentence shall remain subject to such limitation
regardless of any subsequent transfers, and at each time that any Warrant so
loses its rights to such adjustment, all Warrants which have lost their right to
such adjustment as of such time shall be automatically classified into (and the
outstanding Warrant representing such Warrant will automatically be deemed to
represent). The holders of Warrants of each such sub-series shall promptly
deliver such Warrants to the Corporation upon the Corporation's request, for
exchange or notation to reflect such sub-series. If any such Warrants are not
delivered to the Corporation, the Corporation shall make appropriate notations
on its stock records, which may include stop transfer instructions, and may
place in escrow, pending receipt of such Warrants, all dividend Payments or
other distributions owing with respect to the Warrants represented by such
Warrants.
3.4 Issuance and Sale of Common Stock. For purposes of determining the
adjusted Exercise Price pursuant to Sections 3.3 above the following events
shall be deemed to be an issuance and sale of Common Stock by the Corporation:
(a) Issuance of Rights or Options. If (i) the Corporation in any
manner hereafter grants any rights or options to subscribe for or to purchase
shares of Common Stock or any securities convertible into or exchangeable for
shares of Common Stock (such rights or options referred to herein as "Options"
and such convertible or exchangeable stock or securities referred to herein as
"Convertible Securities"), except for options to purchase up to 3,500,000 shares
of Common Stock granted to directors, officers, employees or consultants
approved by the Board of Directors and (ii) the Price Per Share of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities is less than the Exercise Price in
effect immediately prior to the time of the granting of such Options then the
shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities will be deemed to have
been issued and sold by the Corporation for such Price Per Share. For the
purposes of this Section 3.4(a), the "Price Per Share" is determined by dividing
(i) the total amount, if any, received or receivable by the Corporation as
consideration for the granting of such Options, plus the minimum aggregate
amount of additional consideration payable to the Corporation upon exercise of
all such Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (ii) the total maximum
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number of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No further adjustment of the Exercise Price will
be made when Convertible Securities are actually issued upon the exercise of
such Options or when Common Stock is actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.
(b) Issuance of Convertible Securities. If (i) the Corporation in any
manner issues or sells any Convertible Securities and (ii) the Price Per Share
of shares of Common Stock issuable upon such conversion or exchange is less than
the Exercise Price in effect immediately prior to the time of such issue or sale
then the shares of Common Stock issuable upon the conversion or exchange of such
Convertible Securities will be deemed to have been issued and sold by the
Corporation for such Price Per Share. For the purposes of this Section 3.4(b),
the "Price Per Share" will be determined by dividing (i) the total amount
received or receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Exercise Price will be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments to the Exercise Price had been or
are to be made pursuant to Section 3.4(a) above, no further adjustment of the
Exercise Price will be made by reason of such issue or sale.
(c) Change in Option Price or Conversion Rate. If at any time there
is a change in (i) the purchase price provided for in any Options, (ii) the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities, or (iii) the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock, then the Exercise Price
in effect at the time of such change will be readjusted to the Exercise Price
which would have been in effect had those Options or Convertible Securities
still outstanding at the time of such change provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time such Options or Convertible Securities were initially granted,
issued or sold; provided that if such adjustment would result in an increase of
the Exercise Price then in effect, such adjustment will not be effective until
30 days after written notice thereof has been given by the Corporation to all
holders of Warrants.
(d) Calculation of Consideration Received. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor or the Price
Per Share, as the case may be, will be deemed to be the net amount received or
to be received, respectively, by the Corporation therefor. In case any shares of
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Corporation or the non-cash portion of the Price Per Share, as
the case may be, will be the fair value of such consideration received or to be
received, respectively, by the Corporation; except where such consideration
consists of securities, in which case the amount of consideration
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received or to be received, respectively, by the Corporation will be the Market
Price thereof as of the date of receipt. If any shares of Common Stock, Options
or Convertible Securities are issued in connection with any merger in which the
Corporation is the surviving corporation, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving corporation as is attributable to such shares of
Common Stock, Options or Convertible Securities, as the case may be. The fair
value of any consideration other than cash and securities will be determined
jointly by the Corporation and the holders of a majority of the outstanding
warrants issued by the Corporation. If such parties are unable to reach
agreement within a reasonable period of time, the fair value of such
consideration will be determined by an independent appraiser jointly selected by
the Corporation and the holders of a majority of the outstanding warrants issued
by the Corporation.
(e) Integrated Transactions. In case any Option is issued in
connection with the issuance or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
will be deemed to have been issued for a consideration of $.01.
(f) Record Date. If the Corporation takes a record of the holders of
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (ii) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issuance or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
3.5 Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced. If the Corporation at any time
combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased.
3.6 Organic Change. Prior to the consummation of any Organic Change, the
Corporation will make appropriate provisions (in form and substance satisfactory
to the holders of a majority of the Warrants then outstanding) to insure that
the Holder of this Warrant will thereafter have the right to acquire and
receive, in lieu of or in addition to the shares of Common Stock immediately
theretofore acquirable and receivable upon the exercise of this Warrant, such
shares of stock, securities or assets as such holder would have received in
connection with such Organic Change if the Holder had exercised this Warrant
immediately prior to such Organic Change. In any such case, the Corporation will
make appropriate provisions (in form and substance satisfactory to the holders
of a majority of the warrants to purchase the Corporation's Common Stock then
outstanding) to insure that the provisions of this Section 3.6 will thereafter
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be applicable to this Warrant (including, an immediate adjustment of the
Exercise Price to the value for the Common Stock reflected by the terms of such
Organic Change and a corresponding immediate adjustment in the number of shares
of Common Stock acquirable and receivable upon exercise of this Warrant, if the
value so reflected is less than the Exercise Price in effect immediately prior
to such Organic Change). The Corporation will not effect any such Organic
Change, unless prior to the consummation thereof, the successor Corporation
resulting from such Organic Change assumes by written instrument (in form
reasonably satisfactory to the holders of a majority of the Warrants then
outstanding), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
All other terms of this Warrant shall remain in full force and effect
following such an Organic Change. The provisions of this Section 3.6 shall
similarly apply to successive Organic Changes.
3.7 Notices.
(a) Immediately upon any adjustment of the Exercise Price, the
Corporation shall give written notice thereof to the Holder of this Warrant
specifying the Exercise Price in effect thereafter with respect to the
particular holder.
(b) The Corporation shall give written notice to the Holder of this
Warrant at least 20 days prior to the date on which the Corporation closes its
books or takes a record for determining rights to vote with respect to any
Organic Change, Change of Control, Change in Ownership, Fundamental Change or
other reorganization, dissolution or liquidation. The Corporation shall also
give written notice to the Holder of this Warrant at least 20 days prior to the
date on which any Organic Change, Change of Control, Change in Ownership,
Fundamental Change or other reorganization, dissolution or liquidation shall
occur.
3.8 Certain Other Events. The Company will not, by amendment of its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issues or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment. If any event occurs as to which the foregoing
provisions of this Article III are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board of Directors,
fairly protect the purchase rights of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make such adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of the Board of Directors, to protect such purchase
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the Exercise Price or decreasing the number of shares of Common
Stock subject to purchase upon exercise of this Warrant.
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3.9 Proceedings Prior to Any Action Requiring Adjustment. As a condition
precedent to the taking of any action which would require an adjustment pursuant
to this Article III, the Corporation shall take any action which may be
necessary, including obtaining regulatory approvals or exemptions, in order that
the Corporation may thereafter validly and legally issue as fully paid and
nonassessable all shares of Common Stock which the Holder of this Warrant is
entitled to receive upon exercise thereof, and if all such approvals and actions
are not taken, the Corporation shall take any action which would cause the
Corporation to be able to issue to the Holder of this Warrant the full number of
shares issuable upon exercise hereof in accordance with the terms hereof.
ARTICLE IV
LIQUIDATION, DISSOLUTION, DISTRIBUTIONS
4.1 Liquidation or Dissolution. In case the Corporation at any time while
this Warrant shall remain unexpired and unexercised, shall dissolve, liquidate,
or wind up its affairs other than in connection with an Organic Change, the
Holder shall have the right to exercise this Warrant for a period of sixty (60)
days after the later of (i) such event having occurred and (ii) receipt by the
Holder of a notice from the Company indicating the kind and amount of securities
or assets issuable or distributable to holders of shares of Common Stock with
respect to such event, and upon exercise of this Warrant during such period, the
Holder shall have the right to receive in lieu of each share of the Underlying
Common Stock, the same kind and amount of any securities or assets as may be
issuable, distributable, or payable upon any such dissolution, liquidation, or
winding up with respect to each of the shares of the Common Stock.
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following respective
meanings:
"Board of Directors" means the Corporation's duly elected Board of
Directors.
"Business Day" shall mean (a) if any class of Common Stock is listed or
admitted to trading on a national securities exchange, a day on which the
principal national securities exchange on which such class of Common Stock is
listed or admitted to trading is open for business or (b) if no class of Common
Stock is so listed or admitted to trading, a day on which any New York Stock
Exchange member firm is open for business.
"Change in Ownership" means any sale or issuance or series of sales and/or
issuances of shares of the Corporation's capital stock by the Corporation or any
holders thereof which results in any Person or group of affiliated Persons
(other than the holders of the Company's Common Stock and Series A Convertible
Participating Preferred Stock as of the date hereof) owning capital stock of the
Corporation possessing the voting power (under ordinary circumstances) to
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elect a majority of the Board of Directors.
"Change of Control" means any transaction, circumstance or event that shall
cause or result in Xxxxx Xxxx and Xxxxxx Xxxxxxxxxx either (a) owning, directly
or indirectly, beneficial or record ownership of shares of the Corporation's
capital stock or securities having less than 20% of the issued and outstanding
shares of the Corporation entitled to vote on matters submitted to the
Corporation's shareholders, or (b) resigning or being removed or otherwise not
serving as a member of the Board of Directors.
"Commission" means the Securities and Exchange Commission.
"Existing Warrants" means the warrants to purchase up to 17,844,294 shares
of Common Stock issued by the corporation prior to the issuance of this Warrant.
"Fundamental Change" means (a) a sale or transfer of all or substantially
all of the assets of the Corporation, or of the Corporation and its Subsidiaries
on a consolidated basis, in any transaction or series of transactions, and (b)
any merger or consolidation to which the Corporation is a party, except for a
merger in which the Corporation is the surviving Corporation and, after giving
effect to such merger, the holders of the Corporation's outstanding capital
stock immediately prior to the merger shall own the Corporation's outstanding
capital stock possessing the voting power (under ordinary circumstances) to
elect a majority of the Board of Directors after such merger.
"Holder" means the Person in whose name this Warrant is registered on the
books of the Corporation maintained for such purpose or the Person in whose name
any Underlying Common Stock is registered on such books. Together each Holder
known as the "Holders."
"Market Price" of any security means the average of the closing prices of
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on the primary
exchange on which such security is listed at the end of such day, or, if on any
day such security is not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ as of 4:00 P.M., New York time, or, if on any
day such security is not quoted in the NASDAQ, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 21 days
consisting of the day as of which "Market Price" is being determined and the 20
consecutive business days prior to such day. The "Market Price" of a note or
other obligation which is not listed on a securities exchange or quoted in the
NASDAQ or reported by the National Quotation Bureau, Incorporated, the total
consideration received by the Corporation (including interest) will be
discounted at the prime rate of interest at the Bank of America Illinois in
effect at the time the note or obligation is deemed to have been issued. If at
any other time such security is not listed on any securities exchange or quoted
in the NASDAQ or the over-the-counter market, the "Market Price" will be the
fair value thereof determined jointly by
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the Corporation and the holders of a majority of the Warrants. If such parties
are unable to reach agreement within a reasonable period of time, such fair
value will be determined by an independent appraiser jointly selected by the
Corporation and the holders of a majority of the Warrants.
"NASDAQ" means The National Association of Securities Dealers' National
Market or Small Capitalization Market.
"Organic Change" means any capital reorganization, reclassification,
consolidation, merger, lease, or sale of all or substantially all of the
Corporation's assets to another Person (other than a dissolution, liquidation or
winding up of the Company as indicated in Section 3.1 above) which is effected
in such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for shares of Common Stock.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any corporation, association or other business entity of
which securities or other ownership interests representing more than fifty
percent (50%) of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Corporation or one or
more Subsidiaries of the Corporation or by the Corporation and one or more
Subsidiaries of the Corporation.
"Underlying Common Stock" means (i) the Common Stock issued or issuable
upon conversion of the Class A Preferred Stock, (ii) the Common Stock issuable
upon the exercise of the Existing Warrants, (iii) the Common Stock issuable upon
exercise of this Warrant and (iv) any Common Stock issued or issuable with
respect to the securities referred to in clauses (i), (ii) or (iii) above by way
of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. Any Person who
holds Class A Preferred Stock will be deemed to be the Holder of the Common
Stock obtainable upon the conversion of the Class A Preferred Stock in
connection with the transfer thereof or otherwise regardless of any restriction
or limitation on the conversion. As to any particular shares of Underlying
Common Stock, such shares will cease to be Underlying Common Stock when they
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (b) distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act (or any similar provision then in force).
"Voting Stock" of any Person means securities of any class or classes of
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the
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directors of such Person.
"Warrants" shall have the meaning set forth in the second paragraph of this
Warrant.
ARTICLE VI
MISCELLANEOUS
6.1 Notices. Notices and other communications provided for herein shall
be in writing and shall be delivered personally or mailed certified mail, return
receipt requested or delivered by overnight courier service to the addresses
specified below or such other address as any party hereto other than the
Corporation designates by written notice to the Corporation or if the
designation is by the Corporation, such notice of other address shall be to the
Holder, and all notices shall be deemed to have been given upon delivery if
delivered personally, three (3) days after mailing if mailed, or one (1)
business day after delivery to the courier, if delivered by overnight courier
service. If to the Corporation, such notice shall be mailed to
Blue Rhino Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Chief Executive Officer
In the case of the Holder, such notices and communications shall be addressed to
his, her or its address as shown on the books maintained by the Corporation.
6.2 Waivers; Amendments. No failure or delay of the Holder in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may
be amended, modified or waived with (and only with) the written consent of the
Corporation and the Holders.
Any such amendment, modification or waiver effected pursuant to this
Section shall be binding upon the Holder of this Warrant and upon each future
holder thereof and upon the Corporation. In the event of any such amendment,
modification or waiver, the Corporation shall give prompt notice thereof to the
Holder and, if appropriate, notation thereof shall be made on the Warrant
thereafter surrendered for registration of transfer or exchange.
No notice or demand on the Corporation in any case shall entitle the
Corporation to any other or further notice or demand in similar or other
circumstances.
6.3 Governing Law. This Warrant shall be construed in accordance with and
governed by the internal laws of the State of Delaware, without regard to
principles of conflicts
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of law.
6.4 Survival of Agreements; Representations and Warranties, etc. All
warranties, representations and covenants made by the Corporation herein or in
any certificate or other instrument delivered by or on behalf of it in
connection with the Warrants shall be considered to have been relied upon by the
Holder and shall survive the issuance and delivery of the Warrant, regardless of
any investigation made by the Holder, and shall continue in full force and
effect so long as this Warrant or any Warrant Stock is outstanding. All
statements in any such certificate or other instrument shall constitute
representations and warranties hereunder.
6.5 Covenants to Bind Successor and Assigns. All covenants, stipulations,
promises and agreements in this Warrant contained by or on behalf of the
Corporation shall bind its successors and assigns, whether so expressed or not.
6.6 Severability. In case any one or more of the provisions contained in
this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.
6.7 Section Headings. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.8 No Rights as Stockholder. This Warrant shall not entitle the Holder
to any rights as a stockholder of the Corporation except as set forth in Section
4.2.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, all as
of the day and year first above written.
Blue Rhino Corporation, a Delaware corporation
By__________________________________________
Xxxxx X. Xxxx, Chief Executive Officer
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SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To _____________________________
[Choose one or both of first two paragraphs, as applicable]
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Warrant for, and to purchase thereunder, ___________
shares of Common Stock, as provided for therein, and tenders herewith payment of
the Exercise Price in full in the form of certified or bank cashier's check or
wire transfer.
The undersigned hereby irrevocably elects to exercise the right of
conversion represented by the attached Warrant for, and to convert thereunder,
_______________ shares of Common Stock, as provided for therein.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon exercise
of the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated:____________, 19___
______________________________
___________________________
NOTE: The above signature should correspond
exactly with the name on the face of the
attached Warrant or with the name of the
assignee appearing in the assignment form
below.
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ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ___________________ hereby sells, assigns and transfers
unto the attached Warrant, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ attorney to
transfer said Warrant on the books of Blue Rhino Corporation, with full power of
substitution in the premises.
_______________________________
________________________
Note: The above signature should correspond
exactly with the name on the face of the
attached Warrant.
Dated:___________________
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