Exhibit 10.2
THE SECURITIES REPRESENTED HEREBY
MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN
REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144
WITHOUT RESTRICTION, OR (III) THE PARTNERSHIP HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED THAT SUCH
PLEDGE DOES NOT CONSTITUTE OR RESULT IN A TRANSFER OF THE
SECURITIES UNDER ANY APPLICABLE LAWS, RULES OR
REGULATIONS.
ATLAS PIPELINE PARTNERS,
L.P.
WARRANT TO PURCHASE
COMMON
UNITS
For VALUE RECEIVED,
(“
Warrantholder ”), is entitled to purchase, subject to
the provisions of this Warrant, from ATLAS PIPELINE PARTNERS,
L.P. , a Delaware limited partnership (“
Partnership ”), at any time after the date hereof (the
“ Initial Exercise Date ”) and not later than
5:00 P.M., Eastern time, on the second anniversary of the date
hereof (the “ Expiration Date ”), at an exercise
price per unit equal to $6.35 (the “ Exercise Price
”),
units
(“ Warrant Units ”) of the Partnership’s
Common Units (“ Common Units ”). The number of
Warrant Units purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as
described herein.
Section 1. Registration
. The Partnership shall maintain books for the transfer and
registration of this Warrant. Upon the initial issuance of this
Warrant, the Partnership shall issue and register this Warrant in
the name of the Warrantholder.
Section 2. Transfers .
As provided herein, this Warrant may be transferred only pursuant
to a registration statement filed under the Securities Act of 1933,
as amended (the “ Securities Act ”), or an
exemption from such registration. Subject to such restrictions, the
Partnership shall transfer this Warrant from time to time upon the
books to be maintained by the Partnership for that purpose, upon
surrender thereof for transfer, properly endorsed or accompanied by
appropriate instructions for transfer and such other documents as
may be reasonably required by the Partnership, including, if
required by the Partnership, an opinion of its counsel to the
effect that such transfer is exempt from the registration
requirements of the Securities Act, to establish that such transfer
is being made in accordance with the terms hereof, and a new
Warrant shall be issued to the transferee and the surrendered
Warrant shall be canceled by the Partnership.
Section 3. Exercise of
Warrant .
(a) This Warrant may be exercised in
whole or in part at any time on or after the Initial Exercise Date
and prior to the Expiration Date upon delivery of the notice of
exercise
form attached hereto as Appendix A
(the “ Notice of Exercise ”) and payment by
cash, certified check or wire transfer (or, in certain
circumstances, by net issuance exercise as provided in
Section 3(h)) for the aggregate Exercise Price for that number
of Warrant Units then being purchased, to the Partnership during
normal business hours on any day other than a Saturday or Sunday on
which banks are open for business in New York City (a “
Business Day ”) at the Partnership’s principal
executive offices (or such other office or agency of the
Partnership as the Partnership may designate by notice to the
Warrantholder; provided that any Notice of Exercise delivered after
12:00 noon EST will be deemed delivered the next Trading Day). The
Warrant Units so purchased shall be deemed to be issued to the
Warrantholder or the Warrantholder’s designee, as the record
owner of such units, as of 5:00 P.M. New York City time on the date
on which the aggregate Exercise Price shall have been paid and the
completed Notice of Exercise shall have been delivered.
Certificates for the Warrant Units so purchased, representing the
aggregate number of units specified in the Notice of Exercise,
shall be transmitted by the Partnership’s transfer agent by
crediting the account of the Warrantholder’s prime broker
with The Depository Trust Company (“ DTC ”)
through its Deposit / Withdrawal At Custodian system if the
Partnership is a participant in such system, and otherwise by
physical delivery to the address specified by the Warrantholder in
the Notice of Exercise, within a reasonable time, not exceeding
three (3) Trading Days (as defined below) after this Warrant
shall have been so exercised, including payment of the aggregate
Exercise Price and the delivery of a completed Notice of Exercise
(the “ Warrant Unit Delivery Date ”). The
certificates so delivered shall be in such denominations as may be
requested by the Warrantholder and shall be registered in the name
of the Warrantholder or such other name as shall be designated by
the Warrantholder in the Notice of Exercise.
(b) Notwithstanding anything herein
to the contrary, the Warrantholder shall not be required to
physically surrender this Warrant to the Partnership until the
Warrantholder has purchased all of the Warrant Units available
hereunder and this Warrant has been exercised in full, in which
case, the Warrantholder shall surrender this Warrant to the
Partnership for cancellation within three (3) Trading Days of
the date the final Notice of Exercise is delivered to the
Partnership. Partial exercises of this Warrant resulting in
purchases of a portion of the total number of Warrant Units
available hereunder shall have the effect of lowering the
outstanding number of Warrant Units purchasable hereunder in an
amount equal to the applicable number of Warrant Units purchased.
The Warrantholder and the Partnership shall maintain records
showing the number of Warrant Units purchased and the date of such
purchases. The Partnership shall deliver any objection to any
Notice of Exercise Form within one Business Day of receipt of such
notice. In the event of any dispute or discrepancy, the records of
the Partnership’s transfer agent shall be controlling and
determinative in the absence of manifest error. The Warrantholder
and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Units hereunder,
the number of Warrant Units available for purchase hereunder at any
given time may be less than the amount stated on the face
hereof.
(c) If this Warrant shall have been
exercised in part and surrendered, the Partnership shall, at its
own expense and at the time of delivery of the certificate or
certificates representing Warrant Units, deliver to the
Warrantholder a new Warrant evidencing the rights of the
Warrantholder to purchase the unpurchased Warrant Units called for
by this Warrant, which new Warrant shall in all other respects be
identical to this Warrant.
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(d) In addition to any other rights
available to the Warrantholder, if the Partnership fails to deliver
to the Warrantholder a certificate or certificates representing the
Warrant Units pursuant to an exercise on or before the applicable
Warrant Unit Delivery Date, and if after such date the
Warrantholder is required by its broker to purchase (in an open
market transaction or otherwise) Common Units to deliver in
satisfaction of a sale by the Warrantholder of the Warrant Units
which the Warrantholder anticipated receiving upon such exercise (a
“ Buy-In ”), then the Partnership shall, at the
Warrantholder’s option, either (i) pay cash to the
Warrantholder in an amount equal to the Warrantholder’s total
purchase price (including brokerage commissions, if any) for the
Common Units so purchased (the “ Buy-In Price
”), at which point the Partnership’s obligation to
deliver such certificate (and to issue such Common Units) or credit
such Warrantholder’s balance account with DTC shall
terminate, or (ii) promptly honor its obligation to deliver to
the Warrantholder a certificate or certificates representing such
Common Units or credit such Warrantholder’s balance account
with DTC and pay cash to the Warrantholder in an amount equal to
the excess (if any) of the Buy-In Price over the product of
(A) such number of Common Units, times (B) the closing
bid price on the date of exercise. Warrantholder shall provide the
Partnership written notice indicating the amounts payable to the
Warrantholder in respect to the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the
Partnership. Nothing herein shall limit a Warrantholder’s
right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the
Partnership’s failure to timely deliver certificates
representing Common Units upon exercise of this Warrant as required
pursuant to the terms hereof.
(e) For purposes of this Warrant
(i) a “ Trading Day ” means (A) a day
on which the Common Units are traded on a Trading Market (as
defined below), or (B) if the Common Units are not listed on a
Trading Market, a day on which the Common Units are traded on the
over the counter market, as reported by the National Association of
Securities Dealers, Inc. OTC Bulletin Board (the “
Bulletin Board ”), or (C) if the Common Units are
not quoted on the Bulletin Board, a day on which prices for the
Common Units are reported in the Pink Sheets published by Pink
Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that
the Common Units are not listed, quoted or reported as set forth in
(A), (B) and (C) hereof, then Trading Day shall mean a
Business Day and (ii) “ Trading Market ”
means the following markets or exchanges on which the Common Units
are listed or quoted for trading on the date in question: the
NASDAQ Global Select Market, the NASDAQ Global Market, The NASDAQ
Capital Market, the American Stock Exchange or the New York Stock
Exchange.
(f) If and only if the remedy in
Section 3(d) is not utilized by the Warrantholder, then if the
Partnership fails to deliver to the Warrantholder a certificate or
certificates representing the Warrant Units pursuant to an exercise
on or before the Warrant Unit Delivery Date, the Partnership shall
be liable to the Warrantholder for liquidated damages in an amount
equal to 1.0% of the aggregate Exercise Price of the Warrant Units
issuable pursuant to such exercise for each thirty (30) day
period (or pro rata for any portion thereof) beyond the
Warrant Unit Delivery Date.
(g) Notwithstanding anything to the
contrary herein, the Warrantholder shall not have the right to
exercise any portion of this Warrant, pursuant to
Section 3 or otherwise, to
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the extent that after giving effect to such
issuance after exercise, the Warrantholder (together with the
Warrantholder’s affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of 4.99% of
the number of Common Units outstanding immediately after giving
effect to such issuance; provided that this limitation shall not
apply to Morgan Stanley Strategic Investments, Inc. For purposes of
the foregoing sentence, the number of Common Units beneficially
owned by the Warrantholder and its affiliates shall include the
number of Common Units issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made,
but shall exclude the number of Common Units which would be
issuable upon (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Warrantholder or
any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the
Partnership (including, without limitation, any other Common Units
or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by
the Warrantholder or any of its affiliates. Except as set forth in
the preceding sentence, for purposes of this
Section 3(g) , beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act, it being
acknowledged by the Warrantholder that the Partnership is not
representing to the Warrantholder that such calculation is in
compliance with Section 13(d) of the Exchange Act and the
Warrantholder is solely responsible for any schedules required to
be filed in accordance therewith. For purposes of this
Section 3(g) , in determining the number of outstanding
Common Units, the Warrantholder may rely on the number of
outstanding Common Units as reflected in the latest of (x) the
Partnership’s most recent Form 10-Q or Form 10-K, as the case
may be, (y) a more recent public announcement by the
Partnership or (z) any other notice by the Partnership or the
Partnership’s transfer agent setting forth the number of
Common Units outstanding. Following the written or oral request of
the Warrantholder, the Partnership shall, or shall cause its
transfer agent to, within two Trading Days confirm orally and in
writing to the Warrantholder the number of Common Units then
outstanding. In any case, the number of outstanding Common Units
shall be determined after giving effect to the conversion or
exercise of securities of the Partnership, including this Warrant,
by the Warrantholder or its affiliates since the date as of which
such number of outstanding Common Units was reported. The
provisions of this Section 3(g) may be waived by the
Warrantholder, at the election of the Warrantholder, upon not less
than 61 days’ prior notice to the Partnership, and the
provisions of this Section 3(g) shall continue to apply
until such 61st day (or such later date, as determined by the
Warrantholder, as may be specified in such notice of
waiver).
(h) Notwithstanding any other
provision contained herein to the contrary, if, after the Target
Effective Date (as such term is defined in the Registration Rights
Agreement of even date herewith (the “Registration Rights
Agreement”)), the Warrant Units may not be freely sold to the
public for any reason (including, but not limited to, the failure
of the Partnership to have effected the registration of the Warrant
Units, or the failure to have a current prospectus available for
delivery or otherwise), the Warrantholder may elect to receive,
without the payment by the Warrantholder of the aggregate Exercise
Price in respect of the Common Units to be acquired, Common Units
equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant (or such portion of this Warrant being so
exercised) together with the Net Issue Election Notice annexed
hereto as Appendix B duly executed, at the office of the
Partnership. Thereupon, the Partnership shall issue to the
Warrantholder such number of fully paid, validly issued and
non-assessable (except as such non-assessability may be affected by
Section 17-607 of the Delaware LP Act) Common Units as is
computed using the following formula:
X = Y (A - B)
A
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where
X = the number of Common Units which
the Warrantholder has then requested be issued to the
Warrantholder;
Y = the number of Warrant Units
covered by this Warrant that the Warrantholder is surrendering at
such time for net issuance exercise (including both units to be
issued to the Warrantholder and units to be canceled as payment
therefor);
A = the Market Price (as defined
below) of one Common Unit as at the time the net issue election is
made; and
B = the Exercise Price in effect
under this Warrant at the time the net issue election is
made.
Section 4. Compliance with
the Securities Act of 1933 . Unless (i) the Registration
Statement (as such term is defined in the Registration Rights
Agreement), is effective at any time that this Warrant is exercised
or (ii) this Warrant is exercised pursuant to
Section 3(h) more than six months after the date hereof and
the Warrantholder provides the Partnership with reasonable
assurance that the Warrant Units can be sold, assigned or
transferred pursuant to Rule 144 or a similar rule under the
Securities Act; the certificate evidencing the Warrant Units shall
bear a restrictive legend set forth on the first page of this
Warrant. In addition, as a condition precedent to the issuance of
the Warrant Units upon such exercise, the Warrantholder shall be
required to covenant and agree that (a) if Warrant Units are
sold pursuant to a Registration Statement, they will be sold in
compliance with the plan of distribution set forth therein,
(b) if this Warrant or any portion hereof is exercised
pursuant to the net issue election provided for in
Section 3(h) within a year of the date this Warrant was first
issued, such Warrantholder will not sell such Warrant Units under
Rule 144 or a similar rule under the Securities Act if it has been
notified by the Partnership that the Partnership is not current in
its reporting obligations thereunder, and (c) if this Warrant
or any portion hereof is exercised for cash consideration, until
the date that is one year from the date the applicable Warrant
Units are first delivered to the Warrantholder, such Warrantholder
will not sell such Warrant Units under Rule 144 or a similar rule
under the Securities Act if it has been notified by the Partnership
that the Partnership is not current in its reporting obligations
thereunder.
Section 5. Payment of
Taxes . The Partnership will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Units issuable upon
the exercise of this Warrant; provided, however, that the
Partnership shall not be required to pay any tax or taxes which may
be payable in respect of any transfer involved in the issuance or
delivery of any certificates for Warrant Units in a name other than
that of the Warrantholder in respect of which such units are
issued, and in such case, the Partnership shall not be required to
issue or deliver any certificate
5
for Warrant Units or any Warrant until the
person requesting the same has paid to the Partnership the amount
of such tax or has established to the Partnership’s
reasonable satisfaction that such tax has been paid. The
Warrantholder shall be responsible for income taxes due under
federal, state or other law, if any such tax is due.
Section 6. Mutilated or
Missing Warrants . In case this Warrant shall be mutilated,
lost, stolen, or destroyed, the Partnership shall issue in exchange
and substitution of and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for this Warrant lost, stolen or
destroyed, a new Warrant of like tenor and for the purchase of a
like number of Warrant Units, but only upon receipt of evidence
reasonably satisfactory to the Partnership of such loss, theft or
destruction of this Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect
thereto, if requested by the Partnership.
Section 7. Adjustments .
The Exercise Price and number of Warrant Units subject to this
Warrant shall be subject to adjustment from time to time as set
forth in this Section 7 .
(a) If the Partnership shall, at any
time or from time to time while this Warrant is outstanding, pay a
dividend or make a distribution on its Common Units in Common
Units, subdivide its outstanding Common Units into a greater number
of units or combine its outstanding Common Units into a smaller
number of units or issue by reclassification of its outstanding
Common Units any units of its capital stock (including any such
reclassification in connection with a consolidation or merger in
which the Partnership is the continuing corporation), then the
number of Warrant Units purchasable upon exercise of this Warrant
and the Exercise Price in effect immediately prior to the date upon
which such change shall become effective, shall be adjusted by the
Partnership so that the Warrantholder thereafter exercising this
Warrant shall be entitled to receive the number of Common Units or
other capital stock which the Warrantholder would have received if
this Warrant had been exercised immediately prior to such event
upon payment of an Exercise Price that has been adjusted to reflect
the economics of such event to the Warrantholder. Such adjustments
shall be made successively whenever any event listed above shall
occur.
(b) If any capital reorganization,
reclassification of the capital stock of the Partnership,
consolidation or merger of the Partnership with another corporation
in which the Partnership is not the survivor, or sale, transfer or
other disposition of all or substantially all of the
Partnership’s assets to another corporation shall be effected
(each, a “ Fundamental Transaction ”), then, as
a condition of such Fundamental Transaction, lawful and adequate
provision shall be made whereby each Warrantholder shall thereafter
have the right to exercise this Warrant and receive upon the basis
and upon the terms and conditions herein specified and in lieu of
the Warrant Units immediately theretofore issuable upon exercise of
this Warrant, such units of stock, securities or assets as would
have been issuable or payable with respect to or in exchange for a
number of Warrant Units equal to the number of Warrant Units
immediately theretofore issuable upon exercise of this Warrant, had
this Warrant been exercised in full immediately prior to such
Fundamental Transaction (the “ Transaction
Consideration ”), and in any such case appropriate
provision (as determined in good faith by the Board of Directors of
the general partner of the Partnership) shall be made with respect
to the rights and interests of each Warrantholder to the end that
the provisions hereof (including, without limitation, provision for
adjustment of the Exercise Price) shall thereafter be applicable,
as nearly equivalent as may be
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practicable in relation to any Transaction
Consideration deliverable upon the exercise hereof. The Partnership
shall not effect any such Fundamental Transaction unless prior to
or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Partnership) resulting
from such consolidation or merger, or the corporation or entity
purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the
Warrantholder, at the last address of the Warrantholder appearing
on the books of the Partnership, such Transaction Consideration as,
in accordance with the foregoing provisions, the Warrantholder may
be entitled to receive upon exercise hereof, and the other
obligations under this Warrant. Without limiting the generality of
the foregoing, the terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring
any such successor or surviving entity to comply with the
provisions of this Section 7(b) and insuring that
this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. The aggregate Exercise Price for this Warrant will not
be affected by any such Fundamental Transaction, but the
Partnership shall apportion such aggregate Exercise Price among the
Transaction Consideration in a reasonable manner reflecting the
relative value of any different components of the Transaction
Consideration, if applicable. If holders of Common Units are given
any choi
