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EXHIBIT 10.4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK PURCHASABLE ON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE ENCUMBERED, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT THEREFOR UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY IN FORM AND SUBSTANCE TO THE CORPORATION AND CONCURRED IN BY
THE CORPORATION'S COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR SUCH TRANSACTION COMPLIES WITH RULES
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT.
Warrant No. ___ Warrant to Purchase
________ shares of
Common Stock (Subject
to Adjustment)
WARRANT TO PURCHASE COMMON STOCK
of
WASTE CONNECTIONS, INC.
Void after December 14, 2008
This certifies that for value received,____, ("Holder") is entitled,
subject to the terms set forth below, at any time or from time to time before
5:00 p.m., Pacific standard time, on December 14, 2008, to purchase from Waste
Connections, Inc., a Delaware corporation (the "Company"), up to ____ fully paid
and nonassessable shares of the common stock, par value $0.01 per share, of the
Company (the "Common Stock") as constituted on December 15, 1998 (the "Issue
Date"), upon surrender hereof at the principal office of the Company, with the
subscription form attached hereto properly completed and duly executed, and
simultaneous payment therefor in lawful money of the United States at the price
of $2.80 per share, subject to adjustment as provided in Section 4 hereof (the
"Purchase Price"). The number and character of such shares of Common Stock are
also subject to adjustment as provided below. Such number shall be reduced at
such time or times as this Warrant is exercised in part by the number of shares
as to which this Warrant is then exercised. The term "Warrant Stock" shall mean,
unless the context otherwise requires, the stock and other securities and
property at any time receivable upon the exercise of this Warrant. The term
"warrant" as used herein shall include this Warrant and any warrants delivered
in substitution or exchange therefor as provided herein.
1. Method of Exercise; Payment. Subject to compliance with the
provisions of Section 7 hereof:
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A. Cash Exercise. This Warrant may be exercised as a whole, or in
part from time to time, by the Holder by delivering this Warrant, for
cancellation if it is exercised as a whole or for endorsement if it is exercised
in part, together with a Subscription in the form appearing at the end hereof
properly completed and duly executed by or on behalf of the Holder, to the
Company at its office in Roseville, California (or at the office of the agency
maintained for such purpose), accompanied by payment in cash or by certified or
official bank check payable to the order of the Company, in an aggregate amount
equal to the Purchase Price as then adjusted times the number of shares of
Warrant Stock as to which this Warrant is then being exercised. In the event of
any such exercise that is partial, the Company shall endorse this Warrant as
having been exercised to that extent and return this Warrant to the Holder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Warrant Stock issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date.
B. Net Issue Exercise. In lieu of exercising this Warrant
pursuant to Section 1.A, Holder may elect to receive shares equal to the value
of this Warrant (or the portion thereof being cancelled) by surrender of this
Warrant at such office together with notice of such election, in which event the
Company shall issue to Holder a number of shares of Warrant Stock computed using
the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Warrant Stock to be issued to Holder.
Y = the number of shares of Warrant Stock purchasable under this
Warrant at the date of such calculation or, if only a portion of
this Warrant is being exercised, the portion of this Warrant being
cancelled at the date of such calculation.
A = the fair market value of one share of Warrant Stock purchasable
under this Warrant at the date of such calculation.
B = Purchase Price (as adjusted to the date of such calculations).
For purposes of this Warrant, fair market value of one share of Warrant Stock
shall mean:
(1) The average of the closing bid and asked prices of the Common
Stock quoted on the NASDAQ Stock Market or the closing price quoted on any
national securities
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exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the ten trading
days prior to the date of determination of fair market value; or
(2) If the Common Stock is not traded on the NASDAQ stock market
or on such an exchange, an amount reasonably determined in good faith by the
Board of Directors to be the fair market value.
C. Delivery of Stock Certificates. The Company will, or will
direct its transfer agent to, issue, as soon as practicable after any exercise
of this Warrant under Section 1 and in any event within thirty days thereafter,
at its expense (including the payment by it of any applicable issue taxes), in
the name of and deliver to the Holder, or as the Holder may direct (on payment
by the Holder of any applicable transfer taxes) a certificate or certificates
for the number of fully paid and nonassessable shares of Warrant Stock as to
which this warrant is so exercised.
2. Payment of Taxes. All shares of Warrant Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and nonassessable,
and the Company shall pay all taxes and other governmental charges that may be
imposed in respect of the issuance or delivery thereof. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Warrant Stock in
any name other than that of the Holder and, in such case, the Company shall not
be required to issue or deliver any stock certificate until such tax or other
charge has been paid, or it has been established to the Company's satisfaction
that no tax or other charge is due.
3. A. Transfer. Subject to Section 7, this Warrant and all rights
hereunder are transferable, as a whole or in part, on the books of the Company
maintained for such purpose at the office specified pursuant to Section 1.A, by
the Holder in person, or by duly authorized attorney, upon surrender of this
Warrant properly endorsed and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer.
Upon any partial transfer, the Company will issue and deliver to the
Holder a new warrant or warrants of like tenor with respect to the shares of
Warrant Stock not so transferred. In lieu of any fraction of a share to which
the Holder would otherwise be entitled, the Company may deliver to the Holder
cash in an amount equal to such fraction of the current fair market value of one
full share determined in the manner provided in Section 1.B.
Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that this Warrant, when endorsed in blank, shall be
deemed negotiable and that when this Warrant shall have been so endorsed, the
person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner
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hereof for any purpose and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding, but until a
transfer of this Warrant on the books of the Company, the Company may treat the
Holder as the owner for all purposes.
B. Exchange. At the request of the Holder, the Company shall
exchange this Warrant for two or more Warrants of like tenor entitling the
Holder to purchase the same aggregate number of shares of Warrant Stock, each
new Warrant to represent the right to purchase such number of shares of Warrant
Stock as the Holder shall designate at the time of such exchange; provided that
the Holder shall not be entitled so to exchange this Warrant or any warrant
received in any such exchange on more than an aggregate of five occasions.
4. A. Adjustment for Dividends in Other Stock or Property. In case at
any time, or from time to time, after the Issue Date the holders of the Common
Stock of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant), shall have received, or, on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor:
(1) Other or additional stock or other securities or property
(other than cash) by way of a dividend;
(2) Any cash paid or payable out of capital, or capital surplus,
or surplus created as a result of a revaluation of property; or
(3) Other or additional stock or other securities or property
(including cash) by way of a stock-split, spin-off, reclassification,
combination of shares or similar corporate rearrangement;
then, and in each such case, the Holder, upon the exercise hereof (as provided
in Section 1), shall be entitled to receive the number of shares of Warrant
Stock and other securities and property (including cash in the cases referred to
in clauses (2) and (3) above) which the Holder would hold on the date of such
exercise if on the Issue Date the Holder had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the Issue Date to and including the date of
such exercise, retained such shares and/or all other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (2) and (3) above) receivable by the Holder as aforesaid during such
period, giving effect to all adjustments during such period pursuant to this
Section 4.
B. Merger, Sale of Assets, etc. If at any time while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein),
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(ii) a merger or consolidation of the Company with or into another corporation
in which the Company is not the surviving entity, or a reverse triangular merger
in which the Company is the surviving entity but the shares of the Company's
capital stock outstanding immediately prior to the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash, or otherwise, or (iii) a sale or transfer of the Company's properties and
assets as, or substantially as, an entirety to any other person, then, as a part
of such reorganization, merger, consolidation, sale or transfer, lawful
provision shall be made so that the holder of this Warrant shall thereafter be
entitled to receive upon exercise of this Warrant, during the period specified
herein and upon payment of the Purchase Price then in effect, the number of
shares of stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon exercise of this Warrant would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 4. The foregoing provisions of this
Section 4.B shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant.
If the per-share consideration payable to the holder hereof for shares in
connection with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors. In all events, appropriate adjustment
(as determined in good faith by the Company's Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
C. Reclassification, etc. If the Company, at any time while this
Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change the Warrant Stock into
the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the Warrant Stock immediately prior to such reclassification or other change
and the Purchase Price therefor shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 4.
D. Split, Subdivision or Combination of Shares. If the Company at
any time while this Warrant, or any portion hereof, remains outstanding and
unexpired shall split, subdivide or combine the Warrant Stock, into a different
number of securities of the same class, the Purchase Price for such securities
shall be proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
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E. Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of Warrant Stock receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company that such Holder would hold on the date of such
exercise had it been the holder of record of the Warrant Stock on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 4.
F. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 4, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request, at any time, of any such Holder, furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; (ii) the Purchase Price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property that at the time
would be received upon the exercise of the Warrant.
G. No Dilution or Impairment. The Company will not by amendment
of its Articles of Incorporation, or through reorganization, consolidation,
merger, dissolution, issuance or sale of securities, sale of assets, 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. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of Warrant Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares upon the exercise of this Warrant, and (c) will take no
action to amend its Articles of Incorporation which would change to the
detriment of the holders of Common Stock (whether or not any Common Stock be at
the time outstanding) the dividend or voting rights of the Company's Common
Stock (as constituted on the Issue Date).
H. Notices of Record Date. In case:
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(1) The Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend or other
distribution or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, or
(2) Of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any split or combination
of shares of any class of capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or
(3) Of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to the Holder a notice specifying, as the case may be, (a) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (b) the date on which such reorganization, reclassification, split,
combination, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification, split,
combination, consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 90 days prior to the date
therein specified.
5. Loss or Mutilation. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to it, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new warrant of like tenor.
6. Reservation of Common Stock. The Company shall at all times reserve
and keep available for issue upon the exercise of this Warrant such number of
its authorized but unissued shares of Warrant Stock as will be sufficient to
permit the exercise in full of this Warrant.
7. Investment Intent. The Holder, by accepting this Warrant, represents
and warrants to the Company as follows:
A. Acquisition for Own Account. The Holder is acquiring this
Warrant and will acquire the shares of Warrant Stock on exercise of this Warrant
with the Holder's own funds, for the Holder's own account, not as a nominee or
agent. The Holder is not obligated to
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transfer this Warrant or any Warrant Stock to anyone else nor has any agreements
or understandings to do so. The Holder is purchasing or will purchase this
Warrant and the Warrant Stock for investment for an indefinite period and not
with a view to any sale or distribution thereof, by public or private sale or
other disposition, and has no intention of selling, granting any participation
in or otherwise distributing or disposing of any thereof. The Holder does not
intend to subdivide the Holder's purchase with anyone.
B. Restricted Securities. The Holder is able to bear the economic
risk of the Holder's investment in this Warrant and the Warrant Stock and is
aware that the Holder must be prepared to hold this Warrant and the Warrant
Stock for an indefinite period and that this Warrant and the Warrant Stock have
not been registered under the Securities Act of 1933, as amended (the "Act"), on
the ground that no distribution or public offering of this Warrant or the
Warrant Stock is to be effected and this Warrant or the Warrant Stock are being
or will be issued by the Company without any public offering within the meaning
of Section 4(2) of the Act.
C. Sophistication. The Holder is an "accredited investor" as that
term is defined in Regulation D under the Act. The Holder has such knowledge and
experience in financial and business matters that the Holder is capable of
evaluating the merits and risks of the Holder's investment in this Warrant and
the Warrant Stock.
D. Agreement to Refrain from Resales. Without in any way limiting
the Holder's representations herein, the Holder further agrees that the Holder
shall not encumber, pledge, hypothecate, sell, assign, transfer or otherwise
dispose of this Warrant or any Warrant Stock, unless and until, prior to any
proposed encumbrance, pledge, hypothecation, sale, assignment, transfer or other
disposition, either (i) a registration statement on Form S-l (or any other form
appropriate for the purpose or replacing such form) under the Act with respect
thereto shall be then effective (ii)(a) the Holder shall have furnished the
Company with a statement of the circumstances of the proposed disposition and an
opinion of counsel (obtained at the Holder's expense) satisfactory to the
Company to the effect that such disposition will not require registration under
the Act and (b) counsel for the Company shall have concurred in such opinion of
counsel and the Company shall have advised the Holder of such concurrence; or
(iii) the Warrant Stock can then be sold pursuant to Rule 144 under the Act.
E. Certificates to be Legended. The Holder understands and agrees
that this Warrant, any warrant issued to replace this Warrant and any
certificate representing Warrant Stock will bear a legend on the face thereof
(or on the reverse thereof with a reference to such legend on the face thereof)
in substantially the form set forth on the first page of this Warrant and any
other legend that the Company considers necessary or appropriate to comply with
any applicable securities law.
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8. Registration. The Company acknowledges that it has granted to
certain holders of its capital stock certain rights to registration of such
capital stock for resale under the Act, the terms and conditions of which rights
are set forth in an Investors' Rights Agreement dated as of September 30, 1997.
The Company covenants and agrees to seek an amendment to the Investors' Rights
Agreement to include the Warrant Stock in the Registrable Securities to which
the registration rights set forth in Section 1 of the Investors' Rights
Agreement so that the Holder shall be entitled to identical registration rights
pari passu with such holders of capital stock as if the Holder had acquired the
Warrant Stock concurrently with such holders and pursuant to the Investors'
Rights Agreement. If such amendment is not consented to by the holders of a
majority of the Registrable Securities as required by the Investors' Rights
Agreement, the Company shall promptly prepare and thereafter enter into with the
Holder a Registration Rights Agreement providing for the same registration
rights as the Investors' Rights Agreement, which rights shall be subject and
subordinate only to those set forth in the Investors' Rights Agreement.
9. Notices. All notices and other communications from the Company
to the Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Holder who shall have furnished an address to the Company in writing.
10. Change; Waiver. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. Attorneys' Fees. In the event any party is required to engage
the services of attorneys for the purpose of enforcing this Warrant, or any
provision hereof, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and any other costs or expenses.
12. Headings. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
13. Law Governing. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of California.
DATED: December 15, 1997
WASTE CONNECTIONS, INC.
By: ____________________________________
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and
Chief Executive Officer
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ENDORSEMENTS
Number of
Shares
Number of Shares Remaining
as to Which Available for Signature of Authorized Officer
Exercise Date Exercised Exercise of the Company
------------- ---------------- ------------- -------------------------------
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SUBSCRIPTION FORM
(To be executed only upon exercise of warrant)
The undersigned Holder of this Warrant irrevocably exercises this
Warrant for the purchase of _________ shares of Common Stock of Waste
Connections, Inc., purchasable with this Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant.
Dated: ___________________________
________________________________________
(signature of Holder)
________________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
________________________________________
(city) (state) (zip Code)
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned Holder of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ____________ [Attorney] to
make such transfer on the books of Waste Connections, Inc., maintained for the
purpose, with full power of substitution in the premises.
Dated: ____________________
[Holder]
By: ____________________________________
Name: ______________________________
Title: _____________________________
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