Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
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entered into as of March 31, 2000 between BLUE RHINO CORPORATION, a Delaware
corporation (the "Company"), and the parties named on Schedule 1 attached, who
are assignee-holders (the "Holders") of $7,000,000 (subject to adjustment at
Closing) of common stock of the Company, received in connection with the Asset
Purchase Agreement between the Company, as Buyer, and Uniflame, Inc., as seller.
WHEREAS, in order to induce the Holders to cause Uniflame, Inc. to
execute and perform the aforesaid Asset Purchase Agreement, the Company has
agreed to grant to the Holders the registration rights set forth in this
Agreement.
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
Unless otherwise defined herein, capitalized terms so used herein and
not defined shall have the same meaning as provided in the aforesaid Asset
Purchase Agreement.
The parties hereby agree as follows:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the following
respective meanings:
"Asset Purchase Agreement" means the agreement executed by the Company and
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Uniflame, Inc. and the Holders, involving the sale of the assets of Uniflame,
Inc. to the Company.
"Business Day" means any day, other than a Saturday, Sunday or legal
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holiday, on which banks in the State of New York are open for business.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the Common Stock, par value $0.001 per share, of the
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Company, as constituted on the date hereof, any shares of the Company's capital
stock into which such Common Stock shall be changed, or any shares of the
Company's capital stock resulting from any reclassification of such Common Stock
or recapitalization of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
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any successor statute thereto, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"Holders" means the Holders referred to in the Preamble and any other
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person holding Registrable Securities to whom these registration rights have
been assigned pursuant to Section 10(f) of this Agreement.
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"Majority Holders" means at any time the holders of a majority of the
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Registrable Securities.
"Person" shall mean an individual, partnership, corporation, association,
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trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
"Registrable Securities" means (i) all Common Stock issued or issuable by
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the Company and owned by Holders; (ii) any Common Stock or other securities
issued or issuable to Holders upon any stock split, stock dividend,
recapitalization, or similar event; (iii) securities issued in replacement or
exchange of any of the securities issued in clauses (i) or (ii) above; (iv) any
Common Stock issued as, or issued directly or indirectly upon the conversion or
exercise of other securities issued as, a dividend or other distribution with
respect to or in replacement of any Common Stock or other securities referred to
in (i), (ii) or (iii); or (v) any Common Stock issuable directly or indirectly
upon the conversion or exercise of other securities that were issued as a
dividend or other distribution with respect to or in replacement of any
securities referred to in (i), (ii) or (iii); in all cases (i), (ii), (iii) and
(iv) above, such shares of Common Stock and other securities shall remain
Registrable Securities only until a Registration Statement(s) covering such
shares of Common Stock and other securities has been declared effective by the
Commission and all of such shares of Common Stock and other securities have been
disposed of pursuant to such effective Registration Statement(s) or have been
otherwise disposed of in a transaction after which disposition such Common Stock
or other securities became freely tradable.
"Registration Expenses" means all expenses incident to the Company's
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performance of or compliance with this Agreement, including, without limitation,
all registration, filing, listing and National Association of Securities
Dealers, Inc. ("NASD") fees, all fees and expenses of complying with securities
or blue sky laws, all word processing, duplicating and printing expenses, all
messenger and delivery expenses, any transfer taxes, the fees and expenses of
the Company's legal counsel and independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, fees and disbursements of one counsel for
all of the Holders, or sellers of securities; provided, however, that
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Registration Expenses shall not include underwriting discounts and commissions
or fees and disbursements of Underwriters.
"Securities Act" means the Securities Act of 1933, as amended, or any
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successor statute thereto, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"Underwriter" means a securities dealer who purchases any Registrable
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Securities as principal in an underwritten offering and not as part of such
dealer's market making activities.
"Warrants" means the warrants to purchase shares of Common Stock of the
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Company issued to the persons who purchased Bridge Notes.
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2. Registration.
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(a) Demand Registration. At any time commencing six (6) months after
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closing of the sale transaction contemplated by the aforesaid Asset Purchase
Agreement and ending two years after said closing ("Protected Period") if the
Company has not provided the Holders with an effective registration statement
permitting them to freely and lawfully sell their common stock Registrable
Securities during the Protected Period, then upon written request by the
Majority Holders made to the Company that the Company effect the registration
under the Securities Act of all or part of the Registrable Securities (a "Demand
Registration"), the Company will use its diligent efforts to effect the
registration under the Securities Act of the Registrable Securities that the
Company has been so requested to register by such Majority Holders within ninety
(90) days after receipt of such request or within forty-five (45) days after
receipt of such request if the Company is qualified to file a registration
statement on Commission Form S-3 or any successor or similar short-form
registration statement (collectively, "Commission Form S-3"). The Company must
effect Demand Registrations pursuant to this Section 2(a) to the extent such
registrations may be effected on Commission Form S-3, but the Company shall not
be obligated to effect more than one (1) Demand Registration hereunder on
Commission Form S-1 or any other similar Commission Form.
(b) Piggyback Registration. If the Company for itself or any of its
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security holders shall at any time or times during the Protected Period
determine to register under the Securities Act any shares of its capital stock
or other securities (other than (i) the registration of an offer, sale or other
disposition of securities solely to employees of, or other persons providing
services to, the Company, or any subsidiary pursuant to an employee or similar
benefit plan registered on Form S-8 or similar or successor forms or (ii)
relating to a merger, acquisition or other transaction of the type described in
Rule 145 under the Securities Act or a comparable or successor rule, registered
on Form S-4 or similar or successor forms), on each such occasion the Company
will notify each Holder of such determination at least thirty (30) days prior to
the filing of such registration statement, and upon the request of any Holder
given in writing within twenty (20) days after the receipt of such notice,
subject to Section 2(f), the Company will use its diligent efforts as soon as
practicable thereafter to cause any of the Registrable Securities specified by
any such Holder to be included in such registration statement to the extent such
registration is permissible under the Securities Act and subject to the
conditions of the Securities Act (a "Piggyback Registration"). The rights
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granted to the Holders pursuant to this Section 2(b) shall be subordinate to any
previously granted piggyback registration rights granted by the Company.
(c) Registration Statement Form. The Company shall, if permitted by law,
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effect any registration requested under Section 2 by the filing of a
registration statement on Commission Form S-3 and shall use its diligent efforts
to take any action necessary to maintain its eligibility to utilize Commission
Form S-3 to permit resales as requested by the Holders with respect to
"Transactions Involving Secondary Offerings" as described in General Instruction
I.B.3 of Commission Form S-3; provided however, Holder shall have the right to
cause the Company to
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satisfy the Holders' demand registration rights hereunder on SEC Form S-1 or
such similar form as then in existence.
(d) Expenses. The Company shall pay all Registration Expenses incurred in
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connection with any Piggyback Registrations and any Demand Registrations.
(e) Effective Registration Statement. A Demand Registration or a Piggyback
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Registration requested pursuant to Section 2(a) or Section 2(b), respectively,
shall not be deemed to have been effected unless the registration statement
filed with respect thereto in accordance with the Securities Act has become
effective with the Commission. Notwithstanding the foregoing, a registration
statement will not be deemed to have become effective if (i) after it has become
effective with the Commission, such registration is interfered with by any stop
order, injunction, or other order or requirement of the Commission or other
governmental agency or any court proceeding for any reason other than a
misrepresentation or omission by any Holder, or (ii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied.
(f) Priority in Registration. If a Demand Registration or a Piggyback
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Registration is an underwritten offering, and the managing Underwriters shall
give written advice to Majority Holders or the Company, as the case may be,
that, in their opinion, market conditions dictate that no more than a specified
maximum number of securities (the "Underwriter's Maximum Number") could
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successfully be included in such registration, then the Company and the Holders
will be able to participate in such offering in the following order of priority:
(i) first, the Company shall be entitled to include in such registration that
number of securities that the Company proposes to offer and sell for its own
account in such registration and that does not exceed the Underwriter's Maximum
Number; (ii) second, the Company will be obligated and required to include in
such registration that number of shares of Registrable Securities that the
Holders thereof shall have requested to be included in such offering, along with
shares of the Company's common stock owned by holders of piggyback registration
rights issued hereinbefore who request to include their shares in such offering,
allocated between such holders and the Holders, first to holders of such rights
issued hereinbefore, and second to the Holders to the full extent of the
remaining portion of the Underwriter's Maximum Number.
(g) Acceptable Delays. Notwithstanding anything in this Section 2 to the
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contrary, the Company shall have the right to delay any registration of
Registrable Securities requested pursuant to paragraph (a) of this Section 2 for
up to ninety (90) days if such registration would, in the judgment of the
Company's Board of Directors, substantially interfere with any material
transaction being considered at the time of receipt of the request from the
Holders.
(h) Exceptions to Registration. Notwithstanding anything in this Agreement
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to the contrary, the Company shall not be obligated to take any action to effect
registration, qualification or compliance with respect to its Registrable
Securities:
(i) in any jurisdiction that would require it to qualify generally to
do business where it is not already so qualified;
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(ii) that would subject it to taxation in a jurisdiction in which it
is not already subject generally to taxation;
(iii) resulting in registering its securities in any jurisdiction
outside the United States.
3. Registration Procedures.
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(a) If and whenever the Company is required to use its diligent efforts to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 2, the Company, as expeditiously as possible and subject
to the terms and conditions of Section 2, will:
(i) prepare and file with the Commission the requisite registration
statement to effect such registration and use its diligent efforts to cause such
registration to become and remain effective;
(ii) permit any Holder who, in the reasonable judgment of such
Holder, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration statement;
(iii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the expiration of twelve
months after such registration statement becomes effective;
(iv) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the purchaser or any Holder of Registrable
Securities to be sold under such registration statement may reasonably request;
(v) use its diligent efforts to register or qualify all Registrable
Securities covered by such registration statement under such other United States
state securities or blue sky laws of such jurisdictions as any Holder of
Registrable Securities to be sold under such registration statement shall
reasonably request, to keep such registration or qualification in effect for so
long as such registration remains in effect, and take any other action that may
be reasonably necessary or advisable to enable the Holder of Registrable
Securities to be sold under such registration statement to consummate the
disposition thereof in such jurisdictions;
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(vi) use its diligent efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other United States state governmental agencies or authorities as may be
necessary to enable the Holder of Registrable Securities to be sold under such
registration statement to consummate the intended disposition of such
Registrable Securities;
(vii) in the event of the issuance of any stop order suspending the
effectiveness of the registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company shall use its diligent efforts promptly to obtain
the withdrawal of such order;
(viii) use it diligent efforts to furnish to the Holders of
Registrable Securities to be sold under such registration statement (1) an
opinion, dated the effective date of the registration statement, of the counsel
representing the Company for the purposes of such registration, addressed to the
Underwriters, if any, stating that such registration statement has become
effective under the Securities Act and that (i) to the diligent knowledge of
such counsel, no stop order suspending the effectiveness thereof has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act; (ii) the registration statement, the
related prospectus, and each amendment or supplement thereto, comply as to form
in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder (except that such
counsel need express no opinion as to financial statements contained therein);
(iii) such counsel has no reason to believe that either the registration
statement or the prospectus, or any amendment or supplement thereto, contains
any untrue statement of a material fact or omits a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; (iv) the descriptions in the registration statement or the
prospectus, or any amendment or supplement thereto, of all legal and
governmental matters and contracts and other legal documents or instruments
provided to such counsel are accurate and fairly present the information
required to be shown; and (v) such counsel does not know of any legal or
governmental proceedings, pending or contemplated, required to be described in
the registration statement or prospectus, or any amendment or supplement
thereto, which are not described as required nor of any contracts or documents
or instruments of a character required to be described in the registration
statement or prospectus, or any amendment or supplement thereto or to be filed
as exhibits to the registration statement that are not described and filed as
required; and (2) a letter, dated the effective date of the registration
statement, from the independent certified public accountants of the Company,
addressed to the Underwriters, if any, stating that they are independent
certified public accountants within the meaning of the Securities Act and that
in the opinion of such accountants, the financial statements and other financial
data of the Company included in the registration statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act; and such
letter from the independent certified public accountants shall additionally
cover such other financial matters (including information as to the period
ending not more than five business days prior to the date of such letter) with
respect to the registration in respect of which such letter is being given as
the Holders may reasonably request);
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(ix) immediately notify the Holders of Registrable Securities
included in such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of its becoming
aware of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of the Holders
promptly prepare and furnish to the Holders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(x) otherwise use its diligent efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section 11
(a) of the Securities Act and Rule 158 thereunder, and not file any amendment or
supplement to such registration statement or prospectus to which any Holder
shall have reasonably objected in writing on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least two business days prior to the filing thereof;
(xi) provide a transfer agent for all Registrable Securities covered
by such registration statement not later than the effective date of such
registration statement; and
(xii) use its diligent efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed.
(b) The Company may require each Holder of Registrable Securities to be
sold under such registration statement, at the Company's expense, to furnish the
Company with such information and undertakings as it may reasonably request
regarding such Holder and the distribution of such securities as the Company may
from time to time reasonably request in writing.
(c) Each Holder, by execution of this Agreement, agrees (A) that upon
receipt of any notice from the Company, or upon such Holder's otherwise becoming
aware, of the happening of any event of the kind described in subdivision
(a)(ix) of this Section 3, such Holder will forthwith discontinue its
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until the receipt by such Holder of the
copies of the supplemented or amended prospectus contemplated by subdivision
(a)(ix) of this Section 3 and, if so directed by the Company, will deliver to
the Company all copies other than permanent
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file copies, then in possession of the Holders of the prospectus relating to
such Registrable Securities current at the time of receipt of such notice and
(B) that it will immediately notify the Company, at any time when a prospectus
relating to the registration of such Registrable Securities is required to be
delivered under the Securities Act, of the happening of any event as a result of
which information previously furnished by such Holder to the Company for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made. In the event the Company or any such Holder shall
give any such notice, the period referred to in subdivision (a)(iii) of this
Section 3 shall be extended by a number of days equal to the number of days
during the period from and including the giving of notice pursuant to
subdivision (a)(ix) of this Section 3 to and including the date when such Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3.
4. Underwritten Offerings.
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(a) Underwritten Offering. In connection with any underwritten
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offering pursuant to a Demand Registration requested under Section 2(a), the
Company will enter into an underwriting agreement with the Underwriters for such
offering, to contain such representations and warranties by the Company and such
other terms as are customarily contained in agreements of that type, including,
without limitation, indemnities to the effect and to the extent provided in
Section 6. Each Holder participating in such underwritten registration shall be
a party to such underwriting agreement and may, at such Holder's option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
Underwriters shall also be made to and for the benefit of each such Holder and
that any or all of the conditions precedent to the obligations of such
Underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holder. No Holder participating in any such underwritten
registration shall be required to make any representations or warranties to or
agreements with the Company or the Underwriters other than representations,
warranties or agreements regarding such Holder and its intended method of
distribution and any other representation required by law.
(b) Selection of Underwriters. If the Holders of a majority of the
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Registrable Securities participating in a Demand Registration so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Holders of a majority of
the Registrable Securities to be included in the Demand Registration shall
select one or more nationally recognized firms of investment bankers to act as
the lead managing Underwriter or Underwriters in connection with such offering
and shall select any additional investment bankers and managers to be used in
connection with the offering; provided that such Underwriter or Underwriters are
reasonably acceptable to the Company.
(c) Holdback Agreements. Each Holder agrees, if so requested by the
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managing Underwriter in each underwritten registration of the Company's capital
stock or other securities described in Section 2 (a) and Section 2(b), to sign
an agreement not to effect (except as part of such underwritten registration in
accordance with the provisions hereof) any sale, distribution,
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short sale, loan, grant of options for the purchase of, or otherwise dispose of,
any Registrable Securities for such period as such Underwriter requests, such
period in no event to commence earlier than seven (7) days prior to, or to end
more than 90 days after, the effective date of such registration.
5. Preparation, Reasonable Investigation.
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In connection with the preparation and filing of each registration
statement under the Securities Act, the Company will give the Holders of
Registerable Securities to be sold under such registration statement, the
Underwriters, if any, and their respective counsel and accountants, advance
draft copies of such registration statement, each prospectus included therein or
filed with the Commission at least 5 business days prior to the filing thereof
with the Commission, and any amendments and supplements thereto promptly as they
become available, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such Holders and such
Underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
6. Indemnification and Contribution.
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(a) Indemnification by the Company. In the event of any registration
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under the Securities Act pursuant to Section 2 of any Registrable Securities
covered by such registration, the Company will, and hereby does, indemnify and
hold harmless each Holder of Registrable Securities to be sold under such
registration statement, each such Holder's legal counsel, each other person who
participates as an Underwriter in the offering or sale of such securities (if so
required by such Underwriter as a condition to including the Registrable
Securities of the Holders in such registration) and each other person, if any,
who controls any such Holder or any such Underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any losses,
claims, damages or liabilities, joint or several, to which the Holders or
Underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein or any document
incorporated therein by reference, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, or arise out of any
violation by the Company of any rule or regulation promulgated under the
Securities Act or state securities law applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, and the Company will reimburse the Indemnified Parties for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable to any
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Indemnified Party in any such
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case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Indemnified
Party.
(b) Indemnification by the Holders. The Company may require, as a
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condition to including any Registrable Securities of any person or entity in any
registration statement filed pursuant to Section 2, that the Company shall have
received an undertaking reasonably satisfactory to it from such person or entity
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 6) the Company, each director of the
Company, each officer of the Company and each other person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if, and
only if, such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with information furnished in writing to
the Company directly by such person or entity specifically for use therein;
provided, however, that the obligation of any Holder hereunder shall be limited
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to an amount equal to the net proceeds received by such Holder upon the sale of
Registrable Securities sold in the offering covered by such registration.
(c) Notices of Claims. Etc. Promptly after receipt by an Indemnified
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Party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 6, such
Indemnified Party will, if a claim in respect thereof is to be made against a
party required to provide indemnification (an "Indemnifying Party"), give
written notice to the latter of the commencement of such action, provided,
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however, that the failure of any Indemnified Party to give notice as provided
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herein shall not relieve the Indemnifying Party of its obligation under the
preceding subdivisions of this Section 6, except to the extent that the
Indemnifying Party is actually materially prejudiced by such failure to give
notice. In case any such action is brought against an Indemnified Party, unless
in such Indemnified Party's reasonable judgment a conflict of interest between
such Indemnified and indemnifying parties may exist in respect of such claim,
the Indemnifying Party shall be entitled to participate in and to assume the
defense thereof, jointly with any other Indemnifying Party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No Indemnifying
Party shall consent to entry of any judgment or enter into any settlement
without the consent of the Indemnified Party which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
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(d) Other Indemnification. Indemnification similar to that specified
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in the preceding subdivisions of this Section 6 (with appropriate modifications)
shall be given by the Company and each Holder of Registrable Securities included
in any registration statement with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority, other than the Securities Act.
(e) Indemnification Payment. The indemnification required by this
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Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, to be made promptly, as and when bills
are received or expense, loss, damage or liability is incurred provided evidence
of such has been delivered to the Indemnifying Party.
(f) Survival of Obligations. The obligations of the Company and of the
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Holders under this Section 6 shall survive the completion of any offering of
Registrable Securities under this Agreement.
(g) Contribution. If the indemnification provided for in this Section
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6 is unavailable or insufficient to hold harmless an Indemnified Party, then
each Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified Party on the other and the parties' relative, intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(g) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim which is the subject of this Section 6. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The amount due from any
Holder pursuant to this Section 6(g) shall be limited to an amount equal to the
net proceeds received by such Holder upon the sale of Registrable Securities
sold on the offering covered by such registration.
7. Covenants Relating to Rule 144.
------------------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
securities of the Company to the public without registration after such time as
a public market exists for the Common Stock of the Company, the Company agrees:
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(a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
(b) to use its diligent efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act, as amended (at any time after it has become
subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements) a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such securities without
registration.
8. Other Registration Rights. The Company covenants and warrants that it shall
-------------------------
not hereinafter grant to any Person any registration rights unless such rights
are subordinate to and not inconsistent with the rights granted or contained
herein, so long as any of the registration rights under this Agreement remain in
effect.
9. Termination of Registration Rights. The right to cause the Company to
----------------------------------
effect the registration of Registrable Securities set forth herein shall
terminate when all Registrable Securities, (i) can be sold in any one three (3)
month period without registration pursuant to the terms of Rule 144 of the
Securities Act and (ii) the market for the Company's Common Stock is
sufficiently liquid to permit sale of such all of such within a three month
period without adversely affecting the market price.
10. Miscellaneous.
(a) Specific Performance. The parties hereto acknowledge that there
--------------------
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement. Legal fees and
costs of enforcing this Agreement shall be awarded to the prevailing party.
(b) Notices. All demands, requests, notices and other communications
-------
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States first class mail, postage prepaid, and
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to the parties hereto at the following address or at such other address as any
party hereto shall hereafter specify by notice to the other party hereto:
(i) If to the Company, addressed to:
Blue Rhino Corporation
104 Cambridge Plaza Drive
Winston-Salem, N.C. 27104
Attn: Mark Castaneda
with a copy to:
John H. Muehlstein
Pedersen & Houpt
161 North Clark Street
Suite 3100
Chicago, IL 60601
(ii) If to the Holders, to their addresses set forth on
Schedule 1 attached hereto,
----------
with a copy to :
Richard A. Sugar
Sugar, Friedberg & Felsenthal
30 North LaSalle Street
Suite 2600
Chicago, IL 60602
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third business day after the mailing
thereof.
(c) Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the laws of the State of Illinois (without giving effect to
any conflicts or choice of laws provisions that would cause the applications of
the domestic substantive laws of any other jurisdiction).
(d) Headings. The descriptive headings of the several sections and
--------
paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) Entire Agreement: Amendments. This Agreement and the other
----------------------------
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements
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and understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Majority Holders. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by an amendment or waiver authorized by
this Section 10(e), whether or not any such Registrable Securities shall have
been marked to indicate such consent.
(f) Assignability. This Agreement and all of the provisions hereof
-------------
may not be assigned by any Holder without the prior written consent of the
Company.
(g) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
COMPANY: HOLDERS:
__________________________________
BLUE RHINO CORPORATION Malcolm R. McQuilkin
By:_________________________________ __________________________________
James Harris
Name:_______________________________
HOLDERS: __________________________________
Darren Howanietz
____________________________________
Martin Bossler __________________________________
Brandon McQuilkin
____________________________________
Paul Friduss __________________________________
Michael Fasel
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