Exhibit 4.6
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: September 17, 1999
WARRANT
To Purchase One Hundred Thousand (100,000) Shares of Common Stock
(subject to adjustment herein)
Expiring September 17, 2009
THIS IS TO CERTIFY THAT, for value received, Michael A. Waters, or his
respective registered assigns is entitled to purchase from Blue Rhino
Corporation, a Delaware corporation (the "Corporation"), at any time and from
time to time after 9:00 A.M., Winston-Salem, North Carolina time, on September
17, 2000 but prior to 5:00 P.M., Winston-Salem, North Carolina time, on
September 17, 2009 (the "Exercise Period"), at the principal office of the
Corporation which is currently 104 Cambridge Plaza Drive, Winston-Salem, North
Carolina 27104 (or such other address as the Corporation shall specify by notice
to the registered holder of this Warrant) 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.
Capitalized terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise and Payment.
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(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
principal office of the Corporation at any time during the Exercise Period (1)
this Warrant, (2) 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 (3)
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. Upon receipt of the Warrant and the
Subscription Notice, the Corporation shall determine whether the shares of
Common Stock to be purchased or converted into, as the case may be, by the
exercise of this Warrant are Registered Shares or Unregistered Shares. If the
Holder elects that this Warrant is exercised for Registered Shares, payment may
only be made by either (1) cash, money order, certified check or bank cashier's
check or (2) wire transfer. If the Holder elects that this Warrant is exercised
for Unregistered Shares, payment may be made by (1) cash, money order, certified
check or bank cashier's check, (2) wire transfer or (3) converting the Warrant,
or any portion thereof, into Common Stock pursuant to Section 1.1(c).
(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 by
converting the Warrant, or any portion thereof, into Common Stock 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 Market
Price of the Underlying Common Stock issuable upon exercise of this Warrant (or
the specified portion hereof) on the Exercise Date, by (y) the Market Price of
one share of Common Stock on the Exercise Date.
(d) Mechanics. Unless the Corporation elects the Buy Out permitted
under Section 1.5 below, the Corporation shall, as promptly as practicable and
in any event within fifteen (15) days after delivery of a Subscription Notice as
described above, execute and deliver or cause to be executed and delivered, in
accordance with such Subscription Notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in said
Subscription Notice. The share certificate or certificates so delivered shall be
in such denominations as may be specified in such Subscription Notice 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
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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 Market Price per share of outstanding Common Stock of the Corporation on the
Business Day immediately prior to the date of such exercise.
1.4 Share Legends. Each certificate for shares of Common Stock issued upon
exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
"This security has not been registered under the Securities Act of 1933 and
may not be sold or offered for sale unless registered pursuant to such Act
or unless the holder hereof delivers to Blue Rhino Corporation an opinion
of counsel reasonably acceptable to Blue Rhino Corporation stating that an
exemption from such registration is available."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the holder of such certificate (who may be an employee of such
holder) and reasonably acceptable to the Corporation, the securities represented
thereby need no longer be subject to restrictions on resale under the Securities
Act.
1.5 Buy Out. On the Exercise Date or on the day that an Organizational
Change is announced (either such date is referred to herein as the "Buy Out
Date"), the Corporation, in its sole discretion, may elect to Buy Out any or all
of the Holder's interest in the Warrant. "Buy Out" means that the Corporation
shall deliver to the Holder (without payment by the Holder of any Exercise Price
or any cash or other consideration) the value of the Warrant, taking into
account the number of shares of Common Stock that the Corporation desires to Buy
Out. The value of this Warrant (or the specified portion thereof) on the Buy
Out Date shall be determined by subtracting (x) the Exercise Price on the Buy
Out Date from (y) the Market Price of a share of the Common Stock issuable upon
exercise of this Warrant on the Buy Out Date and multiplying the remainder by
(z) the number of shares that the Corporation desires to Buy Out.
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1.6 Result of Exercise. On the Exercise Date, the rights of the Holder as a
holder of the Warrant 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.
2.2 Prohibition on Transfer of Warrant.
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(a) Except as specifically provided in this paragraph (b) of this
Section, the Warrants may not be transferred or assigned by the Holder.
(b) The Holder may transfer some or all of its interests in the
Warrant to the following Persons ("Permitted Assignees"):
(i) a trust created by it for estate planning purposes of which
it is a trustee;
(ii) a family partnership, limited liability company or
corporation;
(iii) a spouse and/or children of the Holder;
(iv) if the Holder is a trust, then to its beneficiaries as
permitted under the trust instrument; and
(v) if the Holder is a limited liability company, to its
members as permitted under such limited liability company's
operating agreement and pursuant to the laws of its state
of formation.
2.3 Division or Combination of Warrants. Subject to the limitations of
Section 2.2, 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 to the Corporation, together with a written notice specifying the names
of the Permitted Assignees and denominations in which the new
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Warrant or Warrants are to be issued, signed by the Holder or their respective
duly authorized agents or attorneys. 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 Holder shall pay all
administrative expenses and taxes payable in connection with the preparation,
issuance and delivery of Warrants and Underlying Common Stock hereunder.
ARTICLE III
ADJUSTMENT 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 during the Exercise Period, any Holder
of this Warrant may exercise this Warrant to purchase all or any portion of the
number of shares of Common Stock stated on the face of this Warrant.
3.3 Exercise Price. The "Exercise Price" shall initially be equal to $7.40
per share. In order to prevent dilution of the exercise rights granted to a
Holder, the Exercise Price will be subject to adjustment from time to time
pursuant to Section 3.4 below.
3.4 Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) 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, recapitalization 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.
3.5 Notices. Immediately upon any adjustment of the Exercise Price, the
Corporation shall give written notice thereof to the Holder specifying the
Exercise Price in effect thereafter with respect to the Holder.
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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, the Holder shall have the right to exercise this Warrant
for a period of sixty (60) days after the later of (1) such event having
occurred and (2) 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" shall mean the Corporation's duly elected Board of
Directors.
"Business Day" shall mean (1) 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 (2) if no class of Common
Stock is so listed or admitted to trading, a day on which trading is conducted
on the New York Stock Exchange.
"Buy Out" shall have the meaning provided for in Section 1.6.
"Buy Out Date" shall have the meaning provided for in Section 1.6.
"Closing Date" shall have the definition provided in the Asset Purchase
Agreement entered into among the Corporation and Bison Valve, L.L.C. and Michael
A. Waters dated September 17, 1999.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall have the meaning provided for in the opening
paragraph.
"Exercise Period" shall have the meaning provided for in the opening
paragraph.
"Exercise Price" shall have the meaning provided for in Section 3.3.
"Holder" shall mean the Person in whose name this Warrant is registered on
the books of the
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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."
"Indemnification Agreement" shall have the meaning provided for in the
legends of this Warrant.
"Market Price" of any security shall mean 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 Wall Street Journal, Central Edition, in each such case averaged
over a period of five (5) days consisting of the day as of which "Market Price"
is being determined and the four (4) consecutive business days prior to such
day.
"NASDAQ" shall mean The National Association of Securities Dealers'
National Market or Small Capitalization Market.
"Organizational Change" shall mean any of the following: (1) a
recapitalization, (2) a reorganization, (3) a consolidation or merger of the
Corporation with another Person or (4) a sale of all or substantially all of the
Corporation's assets to another Person.
"Person" shall mean an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Registered Shares" shall mean shares effectively registered under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subscription Notice" shall have the meaning provided in Section 1(a).
"Subsidiary" shall mean 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" shall mean (1) the Common Stock issuable upon
exercise of this Warrant and (2) any Common Stock issued or issuable with
respect to the securities referred to in clause (1) above by way of stock
dividend or stock split or in connection with a reverse stock split,
recapitalization or otherwise.
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"Unregistered Shares" shall mean shares of Common Stock which have not
been effectively registered under the Securities Act.
"Warrant" shall mean this warrant to purchase shares of Common Stock.
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
104 Cambridge Plaza Drive
Winston-Salem, North Carolina 27104
Attention: Billy D. Prim, 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 Holder (or if such proposed amendment, modification or
waiver is subsequent to an assignment of the Warrant by the initial Holder, the
written consent of holders of new Warrants representing the right to purchase a
majority of the shares of Common Stock that the initial Warrant entitled the
Holder to purchase).
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.
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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 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.
6.9 Maintenance of Shares. So long as all or any part of the Warrant
remains outstanding and exercisable the Corporation will maintain sufficient
authorized shares of Common Stock so that the Corporation could issue the
Underlying Common Stock even if all other then outstanding exercisable options
for the purchase of Common Stock were exercised prior to the exercise of the
Warrant. The shares of Underlying Common Stock issuable upon exercise of this
Warrant will be Registered Shares or will be shares which are transferable when
issued (and without a waiting period) under Rule 144 or such other exemption
from the registration requirements of the Securities Act which may be in effect
from time to time..
[The next page is the Signature Page]
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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
/s/ Mark Castaneda
By --------------------------------------------
Mark Castaneda, Chief Financial 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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