EXHIBIT 4.4
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR
QUALIFIED FOR DISTRIBUTION PURSUANT TO A PROSPECTUS UNDER THE SECURITIES
ACT (ONTARIO) OR THE SECURITIES ACT (QUEBEC). THIS WARRANT AND THE
SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN OR WILL BE ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED TO RESIDENTS OF THE UNITED STATES WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE UNITED
STATES SECURITIES ACT OF 1933 OR TO RESIDENTS OF CANADA WITHOUT COMPLIANCE
WITH PROSPECTUS AND REGISTRATION REQUIREMENTS OF APPLICABLE PROVINCIAL
SECURITIES LAWS, UNLESS THERE IS AVAILABLE TO THE TRANSFEROR AN EXEMPTION
FROM SUCH REGISTRATION, AND/OR PROSPECTUS FILING AND REGISTRATION
REQUIREMENTS. THE FOLLOWING APPLIES ONLY TO HOLDERS RESIDENT IN CANADA:
UNLESS PERMITTED UNDER THE SECURITIES ACT (ONTARIO) OR THE SECURITIES ACT
(QUEBEC), A HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
RESIDENT IN CANADA SHALL NOT TRADE SUCH SECURITIES BEFORE THE EARLIER OF
(I) THE DATE THAT IS TWELVE MONTHS AND A DAY AFTER THE DATE THAT THE
COMPANY FIRST BECAME A REPORTING ISSUER IN ANY OF ALBERTA, BRITISH
COLUMBIA, MANITOBA, NOVA SCOTIA, ONTARIO, QUEBEC AND SASKATCHEWAN, IF THE
COMPANY IS A SEDAR FILER (AS DEFINED UNDER RULE 45-102 OF THE SECURITIES
ACT (ONTARIO)); AND (II) THE DATE THAT IS TWELVE MONTHS AND A DAY AFTER
THE LATER OF (A) APRIL 30, 2004 AND (B) THE DATE THAT THE COMPANY BECAME A
REPORTING ISSUER IN THE LOCAL JURISDICTION OF THE PURCHASER OF THE
SECURITIES THAT ARE THE SUBJECT OF THE TRADE. NOTWITHSTANDING THE
FOREGOING, A HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
RESIDENT IN QUEBEC SHALL NOT TRADE THE SECURITIES UNTIL THE CONDITIONS IN
SUBPARAGRAPH (II) ABOVE HAVE BEEN MET. THE COMPANY MAY REQUEST AN OPINION
OF COUNSEL AS TO THE AVAILABILITY OF ANY SUCH EXEMPTION."
WARRANT TO PURCHASE [ ] COMMON SHARES
OF
CAPITAL ENVIRONMENTAL RESOURCE INC.
VOID AFTER APRIL 30, 2009
This Warrant is issued to __________________________, or its registered
assigns (the "Holder") by Capital Environmental Resource Inc., an Ontario
corporation (the "Company"), on April 30, 2004 (the "Warrant Issue Date"). This
Warrant is issued pursuant to the terms of a Common Share Subscription
Agreement, dated of even date herewith (the "Subscription Agreement"), by and
among the Company and the Holder. All capitalized terms not otherwise defined
herein shall have the meaning ascribed thereto in the Subscription Agreement.
1. Number of Shares Subject to Warrant; Exercise Price. Subject
to the terms and conditions hereinafter set forth, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company, to purchase
from the Company, at a per share price equal to the Exercise Price, the Warrant
Stock.
For purposes of this Warrant: (A) "Warrant Stock" shall mean the number of
Shares purchasable upon exercise of this Warrant, as reflected on the face of
this Warrant, subject to adjustment as described in Section 7 below; (B)
"Shares" shall mean fully paid and non-assessable Common Shares of the Company,
and following the US Migration (as defined in Section 7(c) below) shall mean the
common stock of the ultimate parent company of the Company; and (C) "Exercise
Price" means U.S. $4.00 per share, subject to change as described in Section 7
below.
2. Exercise Period. Except as otherwise provided for herein, this
Warrant shall be exercisable, in whole or in part, at any time and from time to
time beginning on the Warrant Issue Date and ending at 5:00 p.m. eastern time on
the fifth (5th) anniversary of the Warrant Issue Date (the "Expiration Date").
Notwithstanding the foregoing, if this Warrant is outstanding and exercisable
for any Shares as of the time of a Sale (as defined below), unless otherwise
agreed to in writing by the Holder, this Warrant shall be deemed automatically
exercised immediately prior to such Sale in accordance with the net exercise
provisions of this Warrant set forth in Section 4(b) below.
3. Notice of Sale. The Company shall provide written notice to
the Holder not less than ten (10) days prior to the consummation of a Sale. A
"Sale" shall mean a sale of all or substantially all of the assets or shares of
the Company (and/or its ultimate parent company following the US Migration) or a
merger, reorganization or consolidation of the Company (or instead its ultimate
parent company following the US Migration) in which the owners of the
outstanding voting power of the Company (or instead its ultimate parent company
following the US Migration), immediately prior to such transaction own, directly
or indirectly, less than 51% of the voting power of the resulting or surviving
entity immediately upon completion of such transaction.
4. Method of Exercise.
(a) Cash Exercise. While this Warrant remains outstanding
and exercisable in accordance with Section 2 hereof, the purchase rights hereby
represented may be exercised in whole or in part, at the election of the Holder,
by the tender of the Notice of Exercise in substantially the form attached
hereto as Exhibit A and the surrender of this Warrant at the principal office of
the Company and by the payment to the Company in cash, by check, cancellation of
indebtedness or other form of payment acceptable to the Company, of an amount
equal to the then applicable Exercise Price multiplied by the number of Shares
then being purchased.
(b) Net Exercise. In lieu of exercising this Warrant
pursuant to Section 4(a), the Holder may elect to receive, without the payment
by the Holder of any
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additional consideration, Shares equal to the value of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with an executed Notice of Exercise, in
substantially the form attached hereto, in which event the Company shall issue
to the holder hereof a number of Shares computed using the following formula:
Y (A - B)
---------
X = A
Where: X = The number of Shares to be issued to the Holder
pursuant to this net exercise;
Y = The number of Shares in respect of which the net
exercise election under this Section 4(b) is made;
A = The fair market value of one Share at the time the
net exercise election is made; and
B = The Exercise Price.
For purposes of this Section 4(b), the fair market value of a Share as of a
particular date shall be the closing sale price of the Shares on the trading
date immediately prior to the date of exercise as quoted on the Nasdaq National
Market or any United States automated quotation system or national securities
exchange on which the Shares are then quoted or traded, as applicable; provided,
that if the Shares are not then so quoted or traded, the fair market value of
the Shares shall be determined by the Board of Directors of the Company in its
reasonable discretion.
5. Certificates for Shares. Upon the exercise of the purchase
rights evidenced by this Warrant, one or more certificates for the number of
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, as applicable). In the event of a partial
exercise of the Warrant, a new warrant or warrants (dated the date hereof) of
like tenor shall be issued, calling in the aggregate on the face or faces
thereof for the number of Shares equal (without giving effect to any adjustment
therein) to the number of Shares called for on the face of this Warrant minus
the number of such Shares purchased by the Holder upon such exercise as provided
in subsections 4(a) and 4(b) above.
6. Issuance of Shares. The Company hereby covenants that it will
take all necessary actions to duly and validly reserve the necessary number of
Shares for issuance hereunder. The Company covenants that the Shares, when
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
with respect to the issuance thereof.
7. Adjustment of Exercise Price and Number of Shares. The number
of and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the
Company (or instead its ultimate parent company following the US Migration)
shall at any time after the
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date hereof and prior to the exercise or expiration of this Warrant subdivide
the Shares by split-up or otherwise, or combine or issue additional Shares as a
dividend with respect to its Shares, the number of Shares issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to the
Exercise Price, provided that the aggregate exercise price payable hereunder for
the total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 7(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In
the event of any corporate reclassification, capital reorganization,
consolidation, spin-off or change in the Shares of the Company (or of its
ultimate parent company following the US Migration), other than as a result of a
subdivision, combination or dividend provided for in Section 7(a) above and
other than a transaction described in Section 7(c) below, then, as a condition
of such event, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered, to the
Holder, so that the Holder shall have the right at any time prior to the
expiration of this Warrant to purchase, at a total price equal to that payable
upon the exercise of this Warrant, the kind and amount of shares of stock and/or
other securities and property receivable in connection with such event by a
holder holding the same number of shares for which this Warrant could have been
exercised immediately prior to such event. In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to any
shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the Exercise Price,
provided that the aggregate exercise price payable hereunder for the total
number of Shares purchasable under this Warrant (as adjusted) shall remain the
same.
(c) Migration into the United States. If the Company
completes a transaction pursuant to which the Company becomes a direct or
indirect subsidiary of a corporation incorporated in the United States (the "US
Migration"), this Warrant shall then become exercisable for the type of shares
into which the Shares have been converted or changed at the same exercise price
as provided for hereunder.
(d) Notice of Adjustment. When any adjustment is required to
be made to the Exercise Price or in the number or kind of Shares purchasable
upon exercise of the Warrant, the Company shall promptly notify the Holder of
such event and of the adjusted Exercise Price or number of Shares or other
securities or property thereafter purchasable upon exercise of this Warrant.
8. Assumption of Warrant. If at any time while this Warrant, or
any portion thereof, is outstanding and unexpired there shall be a merger,
reorganization or consolidation of the Company or any other similar transaction
that does not constitute a Sale or US Migration, then, as a part of such
transaction, lawful provision shall be made so that the Holder shall thereafter
be entitled to receive upon exercise of this Warrant, during the period
specified herein and upon payment of the aggregate Exercise Price then in
effect, the number of shares of stock or
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other securities or property of the successor corporation resulting from such
transaction which a holder holding the Shares deliverable upon exercise of this
Warrant would have been entitled to receive in such transaction if this Warrant
had been exercised immediately before such transaction.
9. No Fractional Shares or Scrip. No fractional Shares or scrip
representing fractional Shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional Shares the Company shall make a cash
payment therefor on the basis of the fair market value of a Share determined in
accordance with Section 4.
10. No Shareholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a shareholder with respect to the
Shares, including (without limitation) the right to vote such Shares, receive
dividends or other distributions thereon, exercise preemptive rights or be
notified of shareholder meetings, and such Holder shall not be entitled to any
notice or other communication concerning the business or affairs of the Company.
However, nothing in this Section 10 shall limit the right of the Holder to be
provided the notices required under this Warrant or the Subscription Agreement.
11. Compliance With Securities Act; Transferability of Warrant or
Shares.
(a) Compliance With Securities Act. The Holder, by
acceptance hereof, agrees that this Warrant, and the Shares issuable upon
exercise of this Warrant, are being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Warrant, or any Shares
issuable upon exercise of this Warrant, except under circumstances which will
not result in a violation of the United States Securities Act of 1933, as
amended (the "Securities Act"), the Securities Act (Ontario), the Securities Act
(Quebec) or any other applicable provincial or state securities laws. This
Warrant and all Shares issued upon exercise of this Warrant (unless registered
under the Securities Act and any applicable state securities laws) shall be
stamped or imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR
QUALIFIED FOR DISTRIBUTION PURSUANT TO A PROSPECTUS UNDER THE
SECURITIES ACT (ONTARIO) OR THE SECURITIES ACT (QUEBEC). THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
TO RESIDENTS OF THE UNITED STATES WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE UNITED STATES SECURITIES ACT
OF 1933 OR TO RESIDENTS OF CANADA WITHOUT COMPLIANCE WITH PROSPECTUS
AND REGISTRATION REQUIREMENTS OF APPLICABLE PROVINCIAL SECURITIES
LAWS, UNLESS THERE IS AVAILABLE TO THE TRANSFEROR AN EXEMPTION FROM
SUCH REGISTRATION, AND/OR PROSPECTUS FILING AND REGISTRATION
REQUIREMENTS. THE FOLLOWING APPLIES ONLY TO HOLDERS RESIDENT IN
CANADA: UNLESS PERMITTED UNDER THE SECURITIES ACT (ONTARIO) OR THE
SECURITIES ACT (QUEBEC), A HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE RESIDENT IN CANADA SHALL
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NOT TRADE SUCH SECURITIES BEFORE THE EARLIER OF (I) THE DATE THAT IS
TWELVE MONTHS AND A DAY AFTER THE DATE THAT THE COMPANY FIRST BECAME
A REPORTING ISSUER IN ANY OF ALBERTA, BRITISH COLUMBIA, MANITOBA,
NOVA SCOTIA, ONTARIO, QUEBEC AND SASKATCHEWAN, IF THE COMPANY IS A
SEDAR FILER (AS DEFINED UNDER RULE 45-102 OF THE SECURITIES ACT
(ONTARIO)); AND (II) THE DATE THAT IS TWELVE MONTHS AND A DAY AFTER
THE LATER OF (A) APRIL 30, 2004 AND (B) THE DATE THAT THE COMPANY
BECAME A REPORTING ISSUER IN THE LOCAL JURISDICTION OF THE PURCHASER
OF THE SECURITIES THAT ARE THE SUBJECT OF THE TRADE. NOTWITHSTANDING
THE FOREGOING, A HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE RESIDENT IN QUEBEC SHALL NOT TRADE THE SECURITIES UNTIL
THE CONDITIONS IN SUBPARAGRAPH (II) ABOVE HAVE BEEN MET. THE COMPANY
MAY REQUEST AN OPINION OF COUNSEL AS TO THE AVAILABILITY OF ANY SUCH
EXEMPTION."
(b) Transferability. Subject to compliance with applicable
United States federal and state securities laws and Canadian federal and
provincial securities laws, this Warrant and all rights hereunder are
transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company. The transfer shall be recorded on the books of
the Company upon the surrender of this Warrant, properly endorsed for transfer
by delivery of an Assignment Form in substantially the form attached hereto as
Exhibit B, to the Company at the address set forth in Section 15 hereof, and the
payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer. In the event of a partial transfer, the Company shall
issue to the holders one or more appropriate new warrants.
12. Restricted Securities. The Holder understands that this
Warrant, and the Shares issuable upon exercise of this Warrant, will not be
registered at the time of their issuance under the Securities Act for the reason
that the sale provided for in this Agreement is exempt pursuant to Section 4(2)
of the Securities Act based on the representations of the Holder set forth
herein. The Holder acknowledges that this Warrant and the Shares issuable upon
exercise of the Warrant are/will be issued under an exemption from the
prospectus filing and registration requirements of the Securities Act (Ontario)
and the Securities Act (Quebec) and that the resale or other disposition of all
or any part of such securities will be restricted by the Securities Act
(Ontario) and the Securities Act (Quebec). The Holder represents that it is
experienced in evaluating companies such as the Company, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment, and has the ability to suffer the total loss
of the investment. The Holder further represents that it has had the opportunity
to ask questions of and receive answers from the Company concerning the terms
and conditions of this Warrant, the business of the Company, and to obtain
additional information to such Holder's satisfaction. The Holder further
represents that it is an "accredited investor" within the meaning of Regulation
D under the Securities Act and within the meaning of Rule 45-501 under the
Securities Act (Ontario), each as presently in effect. The Holder further
represents that this Warrant is being acquired for the account of the Holder for
investment only and not with a view to, or with any intention of, a distribution
or resale thereof, in whole or in part, or the grant of any participation
therein.
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13. Successors and Assigns. The terms and provisions of this
Warrant shall inure to the benefit of, and be binding upon, the Company and the
Holder hereof and their respective successors and assigns, except as limited
herein.
14. Amendments and Waivers. Any term of this Warrant may be
amended, and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), upon the written consent of the Company and the Holder.
15. Notices. All notices required under this Warrant shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile, (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the address of the Company set forth below (or at such other place as the
Company shall notify the Holder hereof in writing) and notices to the Holder
shall be sent to the address of the Holder set forth on the signature page
hereto (or at such other place as the Holder shall notify the Company hereof in
writing):
To the Company: Capital Environmental Resource Inc.
0000 Xxxxxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX X0X 0X0
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx
16. Captions. The section and subsection headings of this Warrant
are inserted for convenience only and shall not constitute a part of this
Warrant in construing or interpreting any provision hereof.
17. Governing Law. This Warrant shall be governed by the laws of
the state of Delaware, without regard to the choice or conflict of laws
principles thereof.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have caused this Warrant to be
duly executed as of the date first set forth above.
COMPANY
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: ________________________________
Name: Xxxx X. Xxxxxx
Title: Executive Vice President,
General Counsel and Secretary
HOLDER
SIGNED, SEALED AND DELIVERED
In the presence of :
_________________________ By: ________________________________
Witness Name:
Title:
Address:
_________________________
_________________________
_________________________
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EXHIBIT A
NOTICE OF EXERCISE
To: Capital Environmental Resource Inc.
The undersigned hereby elects to [check applicable
subsection]:
____________ (a) Purchase ____________ Shares (as defined in the attached
Warrant) pursuant to the terms of the attached Warrant
and payment of the Exercise Price per Share required
under such Warrant accompanies this notice;
OR
____________ (b) Exercise the attached Warrant for all of the Shares in
whole but not in part purchasable under the Warrant
pursuant to the net exercise provisions of Section 4 of
such Warrant.
The undersigned hereby represents and warrants that the undersigned
is acquiring such shares for its own account for investment purposes only, and
not for resale or with a view to distribution of such shares or any part
thereof.
Date:_______________________ WARRANTHOLDER:
By: _____________________________
Name:
Address:
Name in which Shares should be registered: ______________________
EXHIBIT B
ASSIGNMENT FORM
TO: Capital Environmental Resource Inc.
The undersigned hereby assigns and transfers unto _____________________________
of _______________________________________________________________________
(Please typewrite or print in block letters) the right to purchase ____________
Shares (as defined in the attached Warrant) subject to the Warrant, dated as of
_____________________________, by and between Capital Environmental Resource
Inc. and the undersigned (the "Warrant").
This assignment complies with the provisions of Section 11 of the Warrant and is
accompanied by funds sufficient to pay all applicable transfer taxes.
Date:_______________________ By: ________________________________
____________________________________
(Print Name of Signatory)
____________________________________
(Title of Signatory)
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