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EXHIBIT 10.8
WASTE CONNECTIONS, INC.
SECOND AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
Dated as of
September 30, 1997
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TABLE OF CONTENTS
Page
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1. Registration Rights............................................ 1
1.1 Definitions.............................................. 1
1.2 Request for Registration................................. 2
1.3 Company Registration..................................... 4
1.4 Obligations of the Company............................... 4
1.5 Furnish Information...................................... 6
1.6 Expenses of Company Registration......................... 6
1.7 Underwriting Requirements................................ 6
1.8 Delay of Registration.................................... 7
1.9 Indemnification.......................................... 7
1.10 Reports Under Securities Exchange Act of 1934............ 9
1.11 Form S-3 Registration.................................... 10
1.12 Assignment of Registration Rights........................ 11
1.13 "Market Stand-Off" Agreement............................. 11
1.14 Termination of Registration Rights....................... 12
1.15 Registration of Common Stock............................. 12
2. Covenants of the Company....................................... 12
2.1 Delivery of Financial Statements......................... 12
2.2 Inspection............................................... 13
2.3 Right of First Offer..................................... 13
2.4 Termination of Certain Covenants......................... 14
3. Miscellaneous.................................................. 14
3.1 Restrictive Legend....................................... 14
3.2 Notice of Proposed Transfer.............................. 15
3.3 Successors and Assigns................................... 15
3.4 Governing Law............................................ 15
3.5 Counterparts............................................. 15
3.6 Titles and Subtitles..................................... 15
3.7 Notices.................................................. 15
3.8 Expenses................................................. 16
3.9 Amendments and Waivers................................... 16
3.10 Severability............................................. 16
3.11 Aggregation of Stock..................................... 17
3.12 Entire Agreement......................................... 17
3.13 Further Assurances....................................... 17
3.14 Interpretation........................................... 17
3.15 Additional Investors..................................... 17
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Exhibit A Schedule of Investors
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INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made as of
September 30, 1997, by and among Waste Connections, Inc., a Delaware corporation
(the "Company"), and the investors listed on Exhibit A hereto, each of which is
herein referred to as an "Investor," with reference to the following facts:
The Company and the Investors are parties to the Stock Purchase Agreement
dated as of September 30, 1997 (the "Stock Purchase Agreement") with respect to
the purchase of shares of Series A Preferred Stock (the "Series A Preferred
Stock") and Common Stock (the "Common Stock") of the Company. In order to induce
the Company to enter into the Stock Purchase Agreement and to induce the
Investors to invest funds in the Company pursuant to the Stock Purchase
Agreement, the Investors and the Company hereby agree that this Agreement shall
govern the rights of certain of the Investors to cause the Company to register
shares of Common Stock issuable to such Investors and certain other matters as
set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions set forth in this Agreement, the parties agree as
follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Agreement:
(a) The term "ACT" means the Securities Act of 1933, as
amended.
(b) The term "FORM S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "HOLDER" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.12.
(d) The term "1934 ACT" shall mean the Securities Exchange Act
of 1934, as amended.
(e) The term "PREFERRED STOCK" shall mean the Series A
Preferred Stock of the Company.
(f) The terms "REGISTER", "REGISTERED" and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement or similar document in
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compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
(g) The term "REGISTRABLE SECURITIES" means the Common Stock
sold pursuant to the Stock Purchase Agreement, the Common Stock issued pursuant
to the Stock Purchase Agreement dated as of February 4, 1998, by and among Waste
Connections, Inc., Madera Disposal Systems, Inc., Xxxx Xxxxxxxx, as trustee of
the Xxxxxxxx Family Trust B, Xxxxxx Xxxxxxx, Xxxxxx X. Xxxx, and Xxxxxxx X.
Xxxxxxxxxx, the Common Stock issuable upon exercise of the Warrants to purchase
Common Stock issued to Xxxxxx Xxxxxxx, Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxxxxxxx,
Imperial Bank, FSC Corp., Xxxxxx X. Xxxxxxxxxxxx, X. Xxxxxxxx Xxxxxx, Xxxxx X.
Xxxxxx, Xxxxx X. Xxxxxx, Xx., Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxxx, Xx
Xxxxxxx and Xxxxxx Xxxxx, the Common Stock issuable or issued upon conversion of
the Preferred Stock, and any other securities issued by the Company from time to
time that the Company's Board of Directors determines should be included in the
definition of "Registrable Securities", excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which his rights
under this Section 1 are not assigned; provided, however, that shares of Common
Stock or other securities shall not be treated as Registrable Securities for the
purposes of any registration if and so long as at the time of such registration
all transfer restrictions and restrictive legends with respect thereto have been
or, in the opinion of the Company's counsel, may be removed, and all the
Registrable Securities held by such Holder may be sold without restriction
(including any volume limitations) under Rule 144 under the Act.
(h) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
(j) The term "UNDERWRITTEN OFFERING" means an offering of
Common Stock to the public pursuant to an effective Registration Statement that
is firmly underwritten by a United States nationally recognized underwriter or
underwriters that are selected or approved by the Company in accordance with
this Agreement.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the earlier
of (i) four years after the Closing of the Series A Preferred Stock offering or
(ii) six (6) months after the effective date of the first registration statement
for a public offering of securities of the Company (other than a registration
statement relating either to the sale of securities to employees of the Company
pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145
transaction), a written request from Holders holding at least fifty percent
(50%) of the
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Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Act covering the registration of
at least twenty percent (20%) of the Registrable Securities then outstanding (or
a lesser percent if the anticipated aggregate offering price would exceed
$100,000,000), then the Company shall, within twenty-one (21) days after the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations and pursuant to the provisions of this Section 1.2,
use reasonable efforts to file a registration statement under the Act covering
all Registrable Securities which the Holders request to be registered.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action to effect any such registration pursuant to this
Section 1.2:
(i) if the Initiating Holders propose to dispose of
shares of Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 1.11;
(ii) if the Holders shall have initiated two
registrations pursuant to this Section 1.2, which have been declared or ordered
effective and pursuant to which securities have been sold or have been withdrawn
by the Holders other than as a result of a material adverse change to the
Company; or
(iii) if the Company has effected a registration
pursuant to this Section 1.2 within one year prior to receipt of a requested
pursuant to Section 1.2(a).
(c)(i) Subject to the provisions of this Agreement, including,
but not limited to, the foregoing Section 1.2(b) and Section 1.4(a), the Company
shall file a registration statement as soon as practicable after receipt of the
request or requests of the Initiating Holders under this Section 1.2, but in any
event within ninety (90) days after receipt of such request or requests.
(ii) Notwithstanding anything to the contrary herein, the
Company shall not be obligated to effect a registration pursuant to this Section
1.2 during the period starting with the date approximately 10 days prior to the
Company's good faith estimate of the date of filing of, and ending on the date
six months following the effective date of, a Company-initiated registration
statement pertaining to the initial registered underwritten public offering of
securities for the Company's account (the "Initial Offering"); provided that the
Company makes reasonable good faith efforts to cause such registration statement
to become effective.
(d) The right of any Holder to registration pursuant to this
Section 1.2 shall be conditioned on such Holder's participation in an
Underwritten Offering and the inclusion of such Holder's Registrable Securities
to be registered in the Underwritten Offering. The Company shall (together with
all Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter or
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underwriters selected by the Company, which underwriter or underwriters shall be
reasonably acceptable to a majority in interest of the Initiating Holders.
Notwithstanding any other provision of this Section 1.2, if the underwriters
advise the Initiating Holders and the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten and that the
total amount of securities that all Holders (initiating and noninitiating)
request pursuant to this Section 1.2(d) to be included in such offering exceeds
the amount of securities that the underwriters reasonably believe compatible
with the success of the offering, the Company shall so advise all Holders and
all of the Holders' shares to be included in the registration shall be allocated
among all Holders requesting inclusion (initiating and noninitiating) pro rata
according to the total amount of securities entitled to be included in such
registration owned by each Holder requesting inclusion (initiating or
noninitiating) or in such other proportions as shall be mutually agreed by such
selling shareholders. Shares of Registrable Securities held by the Holders shall
not be subject to cutback following the allocation unless shares of all other
selling shareholders have been eliminated from the offering.
If any Holder does not agree to the terms of any such underwriting,
that person shall be excluded therefrom by written notice from the Company or
the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. If
shares are so withdrawn from the registration and the number of shares of
Registrable Securities to be included in such registration was previously
reduced as a result of marketing factors, the Company shall then offer to all
persons who have retained the right to include securities in the registration
the right to include additional securities in the registration in an aggregate
amount equal to the number of shares so withdrawn, with such shares to be
allocated among the persons requesting additional inclusion pro rata according
to the total amount of securities entitled to be included in such registration
owned by each such person or in such other proportions as shall be mutually
agreed by such selling shareholders. For purposes of the preceding sentence
concerning apportionment, for any selling shareholder which is a holder of
Registrable Securities and which is a partnership, limited liability company or
corporation, the partners, retired partners, members, retired members and
shareholders of such holder, or the estates and family members of any such
partners, retired partners, members, retired members and shareholders and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling shareholder," and any pro-rata reduction with respect to such
"selling shareholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "selling shareholder," as defined in this sentence.
1.3 Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for any shareholders) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the
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only Common Stock being registered is Common Stock issuable upon conversion of
debt securities which are also being registered), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 3.7, the Company shall,
subject to the provisions of Section 1.7, cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.
1.4 Obligations of the Company. Whenever required under this Section
1 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that (i) such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (i) includes any prospectus required by Section
10(a)(3) of the Act or (ii) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (i) and
(ii) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the 1934 Act in the registration statement. Notwithstanding anything to
the contrary in this Agreement, the Company may delay filing a Registration
Statement, and may withhold efforts to cause a Registration Statement to become
effective, for a period not to exceed 120 days, if the Company shall furnish to
Holders a certificate signed by the Chairman of the Board stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be effected at such time; provided that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12)
month period. If, after a Registration Statement becomes effective, the Company
advises the holders of registered shares that the Company considers it
appropriate for the Registration Statement to be amended or supplemented, the
holders of such shares shall suspend any further sales of their registered
shares, for a period not to exceed 90 days, until the Company advises them that
the registration statement has been amended or updated.
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(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
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1.6 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to this Section 1 for each Holder (which right may be assigned as
provided in Section 1.12), including (without limitation) all registration,
filing, and qualification fees, printers and accounting fees relating or
apportionable thereto and the fees and disbursements of counsel for the Company
and one separate counsel for the selling Holders hereunder (selected by the
Holders of a majority of the Registrable Securities that are included in the
corresponding registration), but excluding underwriting discounts and
commissions relating to Registrable Securities.
1.7 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under this Section 1 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not,
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities that the underwriters
determine in good faith is compatible with the success of the offering, the
number of shares that may be included in the underwriting shall be allocated,
first, to the Company; second, to the Holders on a pro rata basis based on the
total number of Registrable Securities held by the Holders; and third, to any
shareholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the amount of securities of the selling Holders included
in the registration below fifteen percent (15%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
shareholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the immediately preceding sentence.
In no event will shares of any other selling shareholder be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than two-thirds (66
2/3%) of the Registrable Securities proposed to be sold in the offering.
If any Holder does not agree to the terms of any such underwriting,
the holder shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. If
shares are so withdrawn from the registration and or if the number of shares of
Registrable Securities to be included in such registration was previously
reduced as a result of marketing factors, the Company shall then offer to all
persons who have retained the right to include securities in the registration
the right to include additional securities in the registration in an aggregate
amount equal to the number of shares so withdrawn, with such shares to be
allocated among the persons requesting additional inclusion pro rata according
to the total amount of securities entitled to be included in such registration
owned by each such person or in such other proportions as shall be mutually
agreed by such selling shareholders. For
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purposes of the preceding sentence concerning apportionment, for any selling
shareholder which is a holder of Registrable Securities and which is a
partnership, limited liability company or corporation, the partners, retired
partners, members, retired members and shareholders of such holder, or the
estates and family members of any such partners, retired partners, members,
retired members and shareholders and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling shareholder," and any
pro-rata reduction with respect to such "selling shareholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder," as defined in
this sentence.
1.8 Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.9 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person of
such Holder.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the
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registration statement, each person, if any, who controls the Company within the
meaning of the Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 1.9(b), in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided, that, in no event shall any
indemnity under this subsection 1.9(b) exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1,9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.9.
(d) If the indemnification provided for in this Section 1.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that
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resulted in such loss, liability, claim, damage or expense as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.11 Form S-3 Registration. In case the Company shall receive
written request or requests from at least ten percent (10%) of the Holders of
the Registrable Securities that the
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Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 20
days after effectiveness of such written notice from the Company pursuant to
Section 3.7; provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance pursuant to this
Section 1.11: (i) if Form S-3 is not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at any aggregate price to the
public less than $1,000,000; or (iii) as provided in Section 1.4(a) or Section
1.4(d).
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 1.11 shall not be counted as demands for registration effected pursuant
to Section 1.2.
1.12 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned to a transferee or assignee (other than a competitor of the Company)
who acquires at least twenty-five percent (25%) of the shares held by a Holder
provided: (a) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (b) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement and the Stockholders
Agreement, including without limitation the provisions of Section 1.13 below;
(c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act; and (d) transfer of registration rights to
a limited or general partner of any Holder that is a partnership will be without
restriction as to minimum shareholding. For the purposes of determining the
number of shares of Registrable Securities held by a transferee or assignee, the
holdings of transferees and assignees of a partnership or limited liability
company who are partners or retired partners of such partnership or members or
retired members of such limited liability company (including spouses and
ancestors, lineal descendants and siblings of such partners, members or spouses
who acquire Registrable Securities by gift, will or intestate
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succession) shall be aggregated together and with the partnership or limited
liability company; provided that all assignees and transferees who would not
qualify individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
1.13 "Market Stand-Off" Agreement. Each Investor hereby agrees that,
during the period of duration specified by the Company and an underwriter of
Common Stock or other securities of the Company, following the effective date of
a registration statement filed under the Act for the first public offering of
the Company's Common Stock, it shall not, to the extent requested by the Company
and such underwriter, directly or indirectly sell, offer to sell, contract to
sell (including, without limitation, any short sale), grant any option to
purchase or otherwise transfer or dispose of (other than to donees who agree to
be similarly bound) any securities of the Company held by it at any time during
such period except Common Stock included in such registration; provided,
however, that:
(a) all officers and directors of the Company, all holders of
Common Stock and options to purchase Common Stock and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements; and
(b) such market stand-off time period shall not exceed 180
days.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this
Section 1.13 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-14 or Form 915 or similar forms which may be promulgated
in the future.
1.14 Termination of Registration Rights.
(a) No Holder shall be entitled to exercise any right provided
for in this Section 1 after five (5) years following the consummation of the
sale of securities pursuant to a registration statement filed by the Company
under the Act in connection with the Initial Offering.
(b) In addition, the right of any Holder to request
registration or inclusion in any registration pursuant to Section 1 shall
terminate on the closing of the first Company-initiated registered public
offering of Common Stock of the Company if all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may
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immediately be sold under Rule 144 during any 90 day period, or on such date
after the closing of the first Company-initiated registered public offering of
Common Stock of the Company as all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder may immediately be sold under
Rule 144 during any 90 day period.
1.15 Registration of Common Stock. For purposes of Section 1 of this
Agreement, the only securities which the Company shall be required to register
pursuant hereto shall be shares of Common Stock, provided, however, that, in any
underwritten public offering contemplated by Section 1 hereof, the holders of
Preferred Stock shall be entitled to sell such Preferred Stock to the
underwriters for conversion and sale of the shares of Common Stock issued upon
conversion thereof.
2. Covenants of the Company.
2.1 Delivery of Financial Statements. The Company shall deliver to
each holder of Series A Preferred Stock (or Common Stock issued upon conversion
of Series A Preferred Stock):
(a) as soon as practicable, but in any event within one
hundred twenty (120) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company and
statement of shareholder's equity as of the end of such year, and a statement of
cash flows for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles
("GAAP"), and audited and certified by independent public accountants of
nationally recognized standing selected by the Company; and
(b) as soon as practicable, but in any event within sixty (60)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited income statement for such fiscal quarter, statement
of cash flows for such fiscal quarter and an unaudited balance sheet as of the
end of such fiscal quarter.
2.2 Inspection. The Company shall permit each Investor, at such
Investor's expense, to visit and inspect the Company's properties, to examine
its books of account and records and to discuss the Company's affairs, finances
and accounts with its officers, all at such reasonable times as may be requested
by the Investor; provided, however, that the Company shall not be obligated
pursuant to this Section 2.2 to provide access to any information which it
reasonably considers to be a trade secret or similar confidential information.
2.3 Right of First Offer. Subject to the terms and conditions
specified in this Section 2.3, the Company hereby grants to each Investor a
right of first offer with respect to future sales by the Company of its Shares
(as hereinafter defined). For purposes of this Section 2.3, Investor includes
any general partners, managers and affiliates of an Investor. An
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Investor shall be entitled to apportion the right of first offer hereby granted
it among itself and its partners, members and affiliates in such proportions as
it deems appropriate.
Each time the Company proposes to offer any shares of, or
securities convertible into or exercisable for any shares of, any class of its
capital stock ("Shares"), the Company shall first make an offering of such
Shares to each Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Investors stating (i) its bona fide intention to offer such
Shares, (ii) the number of such Shares to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such Shares.
(b) By written notification received by the Company, within 20
calendar days after giving of the Notice, the Investor may elect to purchase or
obtain, at the price and on the terms specified in the Notice, up to that
portion of such Shares which equals the proportion that the number of shares of
common stock issued and held, or issuable upon conversion of the Preferred Stock
then held by such Investor bears to the total number of shares of common stock
of the Company then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities). The Company shall promptly, in writing,
inform each Investor which purchases all the shares available to it
("Fully-Exercising Investor") of any other Investor's failure to do likewise.
During the ten-day period commencing after such information is given, each
Fully-Exercising Investor shall be entitled to obtain that portion of the Shares
for which Investors were entitled to subscribe but which were not subscribed for
by the Investors which is equal to the proportion that the number of shares of
common stock issued and held, or issuable upon conversion of Preferred Stock
then held by such Fully-Exercising Investor bears to the total number of shares
of common stock issued and held, or issuable upon conversion of the Preferred
Stock then held, by all Fully-Exercising Investors who wish to purchase some of
the unsubscribed shares.
(c) If all Shares which Investors are entitled to obtain
pursuant to subsection 2.3(b) are not elected to be obtained as provided in
subsection 2.3(b) hereof, the Company may, during the 60-day period following
the expiration of the period provided in subsection 2.3(b) hereof, offer the
remaining unsubscribed portion of such Shares to any person or persons at a
price not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not enter into an agreement for the
sale of the Shares within such period, or if such agreement is not consummated
within 30 days of the execution thereof, the right provided hereunder shall be
deemed to be revived and such Shares shall not be offered unless first reoffered
to the Investors in accordance herewith.
(d) The right of first offer in this Section 2.3 shall not be
applicable (i) to consummation of a bona fide, firmly underwritten public
offering of shares of common stock registered under the Act pursuant to a
registration statement on Form S-1, at an offering price of
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at least $5.00 per share (appropriately adjusted for any stock split, dividend,
combination or other recapitalization) with aggregate gross proceeds to the
Company of at least $5,000,000, (ii) the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities, (iii) the
issuance of securities in connection with a bona fide business acquisition of or
by the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise, or (iv) the issuance of options or warrants to
purchase shares of Common Stock to officers, directors and employees of, or
consultants to, the Company, with an exercise price greater than the then
current conversion price of the Company's Series A Preferred Stock.
(e) The right of first offer set forth in this Section 2.3 may
be assigned or transferred to the same parties, subject to the same restrictions
pursuant to Section 1.12.
2.4 Termination of Certain Covenants. The covenants set forth in
this Section 2 shall terminate and be of no further force or effect upon the
consummation of a bona fide, firmly underwritten public offering of shares of
Common Stock registered under the Act pursuant to a registration statement on
Form S-1, at an offering price of at least $5.00 per share (appropriately
adjusted for any stock split, dividend, combination or other recapitalization)
with aggregate gross proceeds to the Company of at least $5,000,000.
3. Miscellaneous.
3.1 Restrictive Legend. Each certificate representing Preferred
Stock or Common Stock issued upon conversion thereof shall, except as otherwise
provided in Section 3.2, be stamped or otherwise imprinted with a legend
substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT
AND ALL SUCH OTHER APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE.
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Act and any applicable state securities
laws.
3.2 Notice of Proposed Transfer. Prior to any proposed transfer of
any Preferred Stock or Common Stock issued upon conversion thereof (other than
under the circumstances described in Section 1), the holder thereof shall give
written notice to the Company of his or her intention to effect such transfer.
Each such notice shall describe the manner of the proposed transfer and, if
reasonably requested by the Company, shall be accompanied by an opinion of
counsel satisfactory to the Company to the effect that the proposed transfer may
be effected without registration under the Act and any applicable state
securities
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laws, whereupon the holder of such stock shall be entitled to transfer such
stock in accordance with the terms of the notice; provided, however, that no
such opinion of counsel shall be required for a transfer to one or more partners
or members of the transferor (in the case of a transferor that is a partnership
or limited liability company) or to an affiliated corporation (in the case of a
transferor that is a corporation). Each certificate for Preferred Stock or
Common Stock issued upon conversion thereof transferred as above provided shall
bear the legend set forth in Section 3.1, except that such certificate shall not
bear such legend if (i) such transfer is in accordance with the provisions of
Rule 144 (or any other rule permitting public sale without registration under
the Act) or (ii) the opinion of counsel referred to above is to the further
effect that the transferee and any subsequent transferee (other than an
affiliate of the Company) would be entitled to transfer such securities in a
public sale without registration under the Act. The restrictions provided for in
this Section 3.2 shall not apply to securities which are not required to bear
the legend prescribed by Section 3.1 in accordance with the provisions of that
Section.
3.3 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
3.4 Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of California, without
regard to that state's conflict of laws principles.
3.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
3.6 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.7 Notices. Any notice, consent, authorization or other
communication to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally or transmitted by facsimile
transmission with receipt acknowledged by the addressee or three days after
being mailed by first class mail, or the next business day after being deposited
for next-day delivery with a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such
notice at the following address for such party (or at such other address as
shall be specified by like notice):
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(a) if to the Company, to:
Waste Connections, Inc.
0000 Xxxxxxx Xxx
Xx Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Shartsis, Xxxxxx & Xxxxxxxx LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Investors, to the address indicated on Exhibit
A.
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified or upon deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed to the
party to be notified at the address indicated for such part on the signature
page hereof, or at such other address as such party may designate by ten (10)
days' advance written notice to the other parties.
3.8 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
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3.10 Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid or unenforceable, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
to be invalid or unenforceable, shall not be affected thereby.
3.11 Aggregation of Stock. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
3.12 Entire Agreement. This Agreement, the Stockholders Agreement
and the Stock Purchase Agreement of even date contain the entire agreement of
the parties and supersede all prior negotiations, correspondence, agreements and
understandings, written and oral, between or among the parties, regarding the
subject matter hereof.
3.13 Further Assurances. Each party shall execute such other and
further certificates, instruments and other documents as may be necessary and
proper to implement, complete and perfect the transactions contemplated by this
Agreement.
3.14 Interpretation. All parties have been assisted by counsel in
the preparation and negotiation of this Agreement and the transactions
contemplated hereby, and this Agreement shall be construed according to its fair
language. The rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.
3.15 Additional Investors. If the Company shall at any future time
desire to issue or reissue any shares of Common Stock or Series A Preferred
Stock to any person or firm (including any Investors), all such issuees shall
become parties to this Agreement with respect to such shares of the Company's
stock by executing a counterpart of this Agreement or a writing agreeing to be
bound hereby. Such additional Investors shall be added to Exhibit A hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY: WASTE CONNECTIONS, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxxxxxxx
President & CEO
INVESTOR:
----------------------------------------
(Name of Investor)
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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Exhibit A
LIST OF COMMON AND SERIES A PREFERRED STOCKHOLDERS
