EXHIBIT 10.1
COMMON SHARE SUBSCRIPTION AGREEMENT
THIS COMMON SHARE SUBSCRIPTION AGREEMENT (this "Agreement") is made
between Capital Environmental Resource Inc., a corporation amalgamated under the
laws of the Province of Ontario (the "Company"), and the person executing this
Agreement as an investor (the "Investor").
W I T N E S S E T H:
WHEREAS, in part to finance working capital and planned acquisitions
by the Company, the Company wishes to issue and sell to certain persons
(collectively the "Investors") (i) certain of the Company's authorized but
unissued common shares (such shares, the "Common Shares") and (ii) warrants to
purchase shares of the Company's authorized but unissued Common Shares in the
form attached as Annex A hereto (each a "Warrant" and, collectively, the
"Warrants");
WHEREAS, the Company intends to consummate a reorganization
transaction pursuant to which the Company will become an indirect subsidiary of
Waste Services, Inc., which is currently the Company's wholly-owned U.S.
subsidiary (the "U.S. Migration"); and
WHEREAS, at the Closing, the Investor and the Company desire to
enter into a Registration Rights Agreement, substantially in the form attached
hereto as Annex D (the Registration Rights Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Investor and the Company
hereby agree as follows (capitalized terms used in this Agreement shall, unless
otherwise defined herein, have the meanings ascribed to them in the Glossary
attached as Annex B hereto).
SECTION 1
TERMS OF PURCHASE AND ISSUANCE
1.1 Authorization of Sale of Shares and Warrants. The Company has
authorized the issuance and sale to the Investors of (i) up to an aggregate of
thirteen million four hundred thousand (13,400,000) Common Shares (such shares,
the "Shares") and (ii) up to an aggregate of one million three hundred forty
thousand (1,340,000) Warrants.
1.2 Subscription. Subject to the terms and conditions hereof, the
Investor hereby subscribes to purchase the number of Shares specified on the
signature page hereof and one Warrant to purchase 10% of the number of Shares
specified on the signature page hereof; provided, however, that fractional
shares shall not be issued upon exercise of the Warrant and, in the event that
10% of the number of Shares purchased would otherwise result in a fractional
number of Shares underlying a Warrant, such number shall be rounded down to the
nearest whole Share. Investor hereby tenders a check payable to "Capital
Environmental Resource Inc. - Escrow Account", has wired funds to the Escrow
Agent pursuant to the instructions set forth in
the Private Placement Memorandum (as defined below), or has authorized Xxxxxxx
Xxxxxx Xxxxxx to forward funds from the Investor's account with Xxxxxxx Xxxxxx
Xxxxxx, in each case in an amount equal to US $4.00 for each Share (with each
Share being accompanied by a warrant to purchase 1/10th of a Share, rounded down
to the nearest whole share) for which the Investor has so subscribed (the
"Aggregate Purchase Price").
1.3 Acceptance of Subscription. It is understood and agreed that the
Company shall have the right to accept or reject this Agreement, in whole or in
part, and to allocate a lesser number of Shares than subscribed for and that the
same shall be deemed to be accepted only when it is signed by an authorized
officer of the Company. Except as hereinafter provided, the undersigned
understands and acknowledges that the Company will rely on this Agreement and
that the undersigned has no right to cancel, assign, terminate, or otherwise
change or amend this Agreement and that the Company has the right in its sole
discretion to refuse to accept this Agreement. If not accepted, this Agreement
shall be null and void and all funds deposited by the undersigned shall be
returned, without interest.
1.4 Sale and Purchase. At the Closing (as defined in Section 1.5 hereof)
and subject to the terms and conditions herein set forth, the Company shall
issue and sell to the Investor, and the Investor shall purchase from the
Company, (i) the number of Shares set forth on the signature page hereto and
(ii) one Warrant to purchase ten percent (10%) of the number of Shares specified
on the signature page hereto (rounded down to the nearest whole Share).
1.5 Closing. The closing of the sale and purchase of the Shares and the
Warrant to the Investor (the "Closing") shall take place at the Washington, D.C.
offices of XxXxxxxxx, Will & Xxxxx at 10:00 A.M. local time, as promptly as
practicable (and in any event no later than the third business day) after the
satisfaction or waiver of all the conditions set forth in Sections 4 and 5
hereof (other than those conditions that will be satisfied at or concurrent with
the Closing), or at such other time, date or place as the Investor and the
Company may agree (the date upon which the Closing occurs, the "Closing Date").
At the Closing, the Company will deliver to the Investor a share certificate
issued in the Investor's name representing the number of Shares and the Warrant
to be purchased by the Investor against payment of the Aggregate Purchase Price
therefor in immediately available funds on behalf of the Investor by the Escrow
Agent or otherwise. If Closing does not take place on the agreed Closing Date,
any subscription funds held by the Company or the Escrow Agent shall be promptly
returned to the Investor. In no event shall the Closing occur after May 30,
2004.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor, as of the date
of the Company's execution of this Agreement as set forth on the signature page,
and as of the Closing Date, as follows:
2.1 Organization and Qualification. The Company is a corporation duly
amalgamated, validly existing and in good standing under the laws of the
Province of Ontario
and has the requisite corporate power and authority to carry on its business as
it is now being conducted.
2.2 Capitalization.
(a) The authorized capital of the Company consists of (i) an
unlimited number of Common Shares, no par value, and (ii) an unlimited number of
Preferred Shares, no par value (the "Preferred Shares"). Of such authorized
capital stock, (i) 73,708,778 Common Shares were issued and outstanding as of
April 16, 2004, all of which are validly issued and are fully paid,
nonassessable and free of preemptive rights, (ii) 55,000 Preferred Shares of the
Company's subsidiary, Waste Services, Inc. were issued and outstanding as of
Xxxxx 00, 0000, (xxx) as of April 16, 2004, 6,646,117 Common Shares were
available for issuance pursuant to the exercise of outstanding warrants to
purchase Common Shares and 10,862,541 Common Shares were available for issuance
pursuant to the exercise of outstanding options to purchase Common Shares, and
(iv) as of April 16, 2004, 7,150,000 shares of common stock of the Company's
subsidiary, Waste Services, Inc. were available for issuance pursuant to the
exercise of outstanding warrants to purchase common stock of Waste Services,
Inc.
(b) Except with respect to the Shares and the Warrants, as set
forth in subsection 2.2(a) above, or as stated in Section 2.2(b) of the
Disclosure Schedule attached hereto, there are no outstanding options, warrants,
subscriptions, calls, convertible securities or other rights, agreements,
arrangements or commitments (contingent or otherwise) (including any right of
conversion or exchange under any outstanding security, instrument or other
agreement) obligating the Company or any of its direct or indirect subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, any shares
or obligating them to grant, extend or enter into any such agreement or
commitment. Other than as set out in Section 2.2(b) of the Disclosure Schedule,
there are no outstanding contractual obligations of the Company or any of its
direct or indirect subsidiaries to repurchase, redeem or otherwise acquire any
shares or make any investment (in the form of a loan, capital contribution or
otherwise) in any other Person other than a subsidiary of the Company.
(c) Upon consummation of the Closing, including receipt by the
Company of the Aggregate Purchase Price payable pursuant to Section 1.5 hereof,
the Shares and the Warrant purchased by the Investor will be validly issued,
fully paid and nonassessable, and the Common Shares issuable upon exercise of
such Warrant (the "Underlying Warrant Shares") will have been duly authorized,
and upon issuance of the Underlying Warrant Shares upon exercise of the Warrant,
in accordance with the terms thereof, such Underlying Warrant Shares will be
validly issued, fully paid and nonassessable.
2.3 Power and Authority; Non-contravention; Government Approvals.
(a) Power and Authority. The Company has all requisite corporate
power and authority to enter into this Agreement and the Ancillary Documents and
to consummate the transactions contemplated hereby and thereby. This Agreement,
the Ancillary Documents and the transactions contemplated hereby and thereby
have been duly approved by the Board of Directors of the Company. No other
corporate proceedings on the part of the Company are necessary to authorize the
execution and delivery of this Agreement and the
Ancillary Documents or the consummation by the Company of the transactions
contemplated hereby and thereby. This Agreement has been, and when executed and
delivered in accordance with the terms hereof the Ancillary Documents will have
been, duly executed and delivered by the Company. This Agreement constitutes,
and when executed and delivered in accordance with the terms hereof the
Ancillary Documents will constitute, valid and binding obligations of the
Company, enforceable against it in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to enforcement of creditors' rights generally
and by general equitable principles. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of their respective
articles, bylaws or equivalent organizational documents in any material respect.
(b) Non-contravention. The execution, delivery and performance of
this Agreement and the Ancillary Documents by the Company: (i) will not violate
or conflict with any provisions of the articles or bylaws of the Company or any
of its subsidiaries, (ii) will not conflict with or constitute a violation of
any applicable law, order, injunction, regulation or ruling of any governmental
authority applicable to the Company or any of its subsidiaries or by which the
Company or any of its subsidiaries or any of their respective properties or
assets are bound, and (iii) will not, either alone or with the giving of notice
or the passage of time, or both, modify, violate, conflict with or accelerate
the performance required by any agreement, note, license, franchise, permit or
other instrument and will not result in the creation or imposition of (or the
obligation to create or impose) any Lien on any of the Company's or any of its
subsidiaries' assets.
(c) Approvals. Except for (i) compliance with any applicable
requirements of the HSR Act and the Canadian Competition Act, (ii) compliance
with any applicable requirements of the Securities Act, Exchange Act, Ontario
Securities Act and the rules and regulations of Nasdaq, (iii) such filings as
may be required under any applicable state, blue sky or Canadian provincial
securities laws and (iv) compliance with the applicable requirements of the
Investment Canada Act (the filings and approvals referred to in clauses (i)
through (iv) being herein referred to collectively as the "Company Required
Statutory Approvals"), and except for any required approvals under the Credit
Facility (as defined in Section 2.9 hereof), no declaration, filing or
registration with, or notice to, or authorization, consent, approval, order or
permit of, any governmental or regulatory body or authority or any other Person
is necessary for the execution and delivery of this Agreement and the Ancillary
Documents by the Company or the consummation by the Company of the transactions
contemplated hereby and thereby except to the extent that the failure to obtain
any such authorization, consent, approval or order or to make any such
registration, declaration, filing or notice, would not have a Company Material
Adverse Effect or a material adverse effect on the validity, binding effect or
enforceability of this Agreement or the Ancillary Documents or the ability of
the Company to perform its obligations hereunder or thereunder.
2.4 SEC Reports; Financial Statements.
(a) Since January 1, 2001, the Company has filed with the SEC all
forms, statements, reports and documents (including all exhibits, post-effective
amendments and supplements thereto) required to be filed by it under each of the
Securities Act and the Exchange Act (collectively, the "Company SEC Reports"),
all of which complied when filed in all material
respects with all applicable requirements of the appropriate act and the rules
and regulations thereunder. The Company has provided to the Investor a
Confidential Private Placement Memorandum dated April 5, 2004 in connection with
the offering of Shares and Warrant to be purchased pursuant to this Agreement
(the "Private Placement Memorandum"). As of its date, the Private Placement
Memorandum did not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) Each of the consolidated financial statements included in the
Private Placement Memorandum, together with the related notes and schedules
(collectively, the "Company Financial Statements"), has been prepared in
accordance with GAAP applied on a consistent basis, and fairly presents the
consolidated financial position of the Company and its subsidiaries as of the
respective dates thereof and the results of their operations and cash flow for
the periods then ended, subject, in the case of unaudited interim financial
statements, to normal year-end adjustments (none of which the Company reasonably
believes are or will be material in amount) and the omission of footnotes.
2.5 Absence of Undisclosed Liabilities. Except as disclosed in the
Private Placement Memorandum or as set out in Section 2.5 of the Disclosure
Schedule, neither the Company nor any of its subsidiaries had, at December 31,
2003 or has incurred since that date, any Liabilities, except for (a)
Liabilities reflected in the financial statements contained in Company SEC
Reports filed prior to the date hereof, (b) current Liabilities which were
incurred after December 31, 2003 in the ordinary course of business and
consistent with past practice, (c) Liabilities which are of a nature not
required to be reflected in the Company Financial Statements in accordance with
GAAP consistently applied and which were incurred in the ordinary course of
business and (d) other Liabilities in an aggregate amount not exceeding US
$500,000.
2.6 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports or in the Private Placement Memorandum, since December 31,
2003, the business of the Company and its subsidiaries has been conducted in the
ordinary course consistent with past practice and there has not been any event,
occurrence or development that has had, or could reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
2.7 Litigation. There are no claims, suits, actions or proceedings
pending or, to the knowledge of the Company, threatened against, relating to or
affecting the Company, before any court, governmental department, commission,
agency, instrumentality or authority, or any arbitrator that seek a remedy (at
law or in equity) as a result of or otherwise in connection with this Agreement
and the transactions contemplated hereby. Neither the Company nor any of its
subsidiaries nor any of their respective properties or assets is subject to any
judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or authority or arbitrator which
prohibits or restricts the consummation of the transactions contemplated hereby.
2.8 Environmental Matters. The Company and its subsidiaries conduct and
have conducted their businesses in material compliance with all applicable
Environmental Laws,
including, without limitation, having all material permits, licenses and other
approvals and authorizations necessary for the operation of their businesses. To
the knowledge of the Company, none of the properties currently or formerly owned
or operated by the Company or any of its subsidiaries contain any Hazardous
Substance, no Hazardous Substance has been disposed of at or released from any
such properties as a result of any activity of the Company or any of its
subsidiaries other than in material compliance with applicable Environmental
Laws, and no such condition exists on or with respect to any of such properties
as a result of any activity by any other Person. Except as reflected, accrued or
reserved against in the Company Financial Statements or in the financial
statements contained in Company SEC Reports filed prior to the date hereof,
neither the Company, nor its subsidiaries, nor any of their respective
properties or assets are subject to any material Liabilities relating to any
suit, settlement, court order, administrative order, regulatory requirement,
judgment or claim asserted or arising under any Environmental Law. To the
knowledge of the Company, there are no and have not been any investigations or
proceedings in which it is alleged that the Company, its subsidiaries, or any of
their predecessors, are potentially responsible for a clean-up or remediation of
lands contaminated with a Hazardous Substance or for any other remedial or
corrective action under an Environmental Law. There are no proceedings pending
or, to the Company's knowledge, threatened to revoke, change or limit any
material permits, licenses, approvals or other authorizations required under any
Environmental Law for the operation of the Company and its subsidiaries.
2.9 Title to and Condition of Assets. Each of the Company and its
subsidiaries has good and marketable title to, or, in the case of leased
properties and assets, has good and valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for use
in, or which are necessary to conduct, the business of the Company and its
subsidiaries as currently conducted, free and clear of all Liens, except for (a)
Liens arising under the Company's Credit Agreement dated as of December 31, 2003
(as amended, the "Credit Facility"), (b) security interests granted to the
Company's bonding company, and (c) other Liens arising in the ordinary course of
business none of which are with respect to obligations that are material in
amount.
2.10 Insurance. The Company and each of its subsidiaries has in effect
insurance coverage, including directors and officers' liability insurance, with
reputable insurers which, in respect of amounts, premiums, types and risks
insured, constitutes reasonably adequate coverage against all risks customarily
insured against by companies comparable in size and operations to the Company
and its subsidiaries. Neither the Company nor any of its subsidiaries has
received any notice of cancellation of any insurance policy or binder currently
in effect.
2.11 No Violation of Law; Licenses; Permits and Registration. Neither the
Company nor any of its subsidiaries is in material violation of, or has been
given notice or been charged with, or, to the Company's knowledge, is being
investigated with respect to, any material violation of, any law, statute,
order, rule, regulation, ordinance or judgment of any governmental or regulatory
body or authority or arbitration panel. Each of the Company and its subsidiaries
has all material permits, licenses, approvals, authorizations of and
registrations under all Federal, state, local, provincial and foreign laws
applicable to it, and from all applicable governmental authorities as are
required by the Company and its subsidiaries to carry on their respective
businesses as currently conducted.
2.12 Non-competition Agreements. Except as disclosed in the Company SEC
Reports, the Private Placement Memorandum or as set out in Section 2.13 of the
Disclosure Schedule, neither the Company nor any subsidiary of the Company is a
party to any agreement which purports to restrict or prohibit in any material
respect any of them or any corporation affiliated with any of them from,
directly or indirectly, engaging in any business involving the collection,
interim storage, transfer, recovery, processing, recycling, marketing or
disposal of rubbish, garbage, paper, textile wastes, liquid and other wastes or
any other material business currently engaged in by the Company or any of its
subsidiaries. None of the Company's officers or key employees is a party to any
agreement which, by virtue of such person's relationship with the Company,
restricts in any material respect the Company or any subsidiary of the Company
from, directly or indirectly, engaging in any of the businesses described above.
2.13 Brokers and Finders. Except for placement agent commissions payable
to Xxxxxxx Xxxxxx Xxxxxx Inc. as described in the Private Placement Memorandum,
the Company is not a party to or bound by any contract, arrangement or
understanding with, or subject to any claim by, any person or firm which may
result in an obligation of the Company to pay any finder's fees, brokerage or
agent commissions or other like payments in connection with the transactions
contemplated hereby.
2.14 Material Contracts. Neither the Company nor any of its subsidiaries
is in material breach or violation of or in default in the performance or
observance of any terms or provisions of, and no event has occurred which, with
notice, lapse of time or both, could result in a default under any contract,
agreement, lease or deed that is material to the business or operation of the
Company and its subsidiaries taken as a whole (a "Material Contract"). To the
knowledge of the Company, no other party to any Material Contract is in material
breach thereof or default thereunder.
2.15 Securities Law Compliance. Assuming the representations and
warranties of the Investor set forth in Section 3 hereof and the representations
of any placement agent in the applicable placement agent agreement are true and
correct in all material respects, the issuance and sale of the Shares and a
Warrant pursuant to this Agreement will be exempt from the prospectus filing and
registration requirements of applicable U.S. and Canadian Federal, state, and
provincial securities laws.
2.16 Rights Agreement. The Company, including its Board of Directors, has
irrevocably taken all actions necessary to (i) render the Rights Agreement
inapplicable to the transactions contemplated by this Agreement and (ii) ensure
that (x) none of the Investors or the Investors as a group are an Acquiring
Person (as defined in the Rights Agreement) pursuant to the Rights Agreement as
a result of the execution of this Agreement and the consummation of the
transactions contemplated hereby and (y) a Distribution Date, a Triggering Event
or a Share Acquisition Date (as such terms are defined in the Rights Agreement)
does not occur by reason of the approval, execution or delivery of this
Agreement, the announcement thereof or the consummation of the transactions
contemplated hereby.
SECTION 3
INVESTOR REPRESENTATIONS
3.1 Representations. The Investor hereby represents and warrants to the
Company with respect to the Investor's purchase of Shares and one Warrant
hereunder that:
(a) The Investor is resident in the jurisdiction set forth
below the Investor's name on the signature page hereto.
(b) If the Investor is an individual, he or she has obtained
the age of majority and is legally competent to execute this Agreement and the
Ancillary Documents and to take all actions required pursuant thereto.
(c) If the Investor is a corporation, partnership,
unincorporated association or other entity, the Investor has the legal capacity
and authority to execute this Agreement and the Ancillary Documents and to take
all actions required pursuant thereto.
(d) The execution of this Agreement and each of the
Ancillary Documents to which the Investor is a party has been duly and validly
authorized by all necessary action on the part of the Investor, has been duly
and validly executed and delivered by the Investor, and constitutes a valid,
binding agreement of the Investor, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to enforcement of creditors' rights generally
and by general equitable principles.
(e) Neither the execution and delivery of this Agreement or
the Ancillary Documents to which the Investor is a party, or any other document
or instrument to be executed by the Investor in connection with the transactions
contemplated thereby nor the consummation of the transactions contemplated
thereby, nor the performance by the Investor of its covenants and agreements
thereunder, (i) violates any law, statute, ordinance, regulation, order,
judgment or decree of any court or other governmental authority applicable to
the Investor, or (ii) violates or will violate, or conflicts with or will
conflict with, or results in or will result in any breach of any of the terms
of, or constitutes or will constitute a default under, any contract or agreement
to which the Investor is a party or by which the Investor or any of its assets
is subject to or bound.
(f) No broker, finder, agent or similar intermediary has
acted on behalf of the Investor in connection with this Agreement or the
transactions contemplated hereby and, except as set forth in Section 2.13, there
are no brokerage commissions, finder's fees or similar fees or commissions
payable in connection therewith.
(g) The Investor acknowledges that it has been advised that
it and/or the Company may be required to provide to applicable securities
regulatory authorities with a list setting forth the identities of the
beneficial purchasers of the Shares and Warrants and the Investor will provide
to the Company and applicable securities regulatory authorities all such
information concerning the Investor as may be required to comply with applicable
securities laws. The Investor further acknowledges that if it is acting on
behalf of beneficial purchasers, the Investor has due and proper authority to
act on behalf of each such beneficial purchaser in connection with the
transactions contemplated hereby.
(h) The Investor acknowledges that the Company has not made
any written representations, warranties or covenants in respect of the Company,
its business, results of operations, financial condition or prospects, or the
offering of Shares and a Warrant to be purchased pursuant to this Agreement,
except as expressly set forth in this Agreement. Without limiting the generality
of the foregoing, except as may be provided herein, no person has made any
written or oral representation to the Investor that any person will re-sell or
re-purchase the Shares, the Warrants or the Underlying Warrant Shares, or refund
any of the purchase price of the Shares, the Warrants or the Underlying Warrant
Shares or that the Shares, the Warrants or the Underlying Warrant Shares will be
listed on any exchange or quoted on any quotation system or that application has
been or will be made to list any such security on any exchange or quotation
system and no person has given any undertaking to the Investor relating to the
future value or price of the Shares, the Warrants or the Underlying Warrant
Shares.
(i) Except for the Private Placement Memorandum, the
Investor has not received, nor has the Investor requested, nor does the Investor
have any need to receive, any prospectus, sales or advertising literature,
offering memorandum or any other document describing the business and affairs of
the Company in order to assist it in making an investment decision in respect of
the purchase of the Shares and one Warrant (including the Underlying Warrant
Shares) pursuant to this Agreement.
(j) The obligations of the Investor under this Agreement,
the Registration Rights Agreement and any other documents delivered in
connection herewith and therewith (collectively, the "Transaction Documents")
are several and not joint with the obligations of any other purchaser of Shares
and Warrants, and the Investor shall not be responsible in any way for the
performance of the obligations of any other purchaser of Shares and Warrants
under any Transaction Document. The decision of the Investor to purchase Shares
and a Warrant pursuant to the Transaction Documents has been made by the
Investor independently of any other purchaser of Shares and Warrants. Nothing
contained herein or in any Transaction Document, and no action taken by any
purchaser of Shares and a Warrant pursuant hereto, shall be deemed to constitute
such purchasers as a partnership, an association, a joint venture, or any other
kind of entity, or create a presumption that the purchasers of Shares and
Warrants are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. The
Investor acknowledges that no other purchaser of Shares and a Warrant has acted
as agent for the Investor in connection with making its investment hereunder and
that no other purchaser of Shares and a Warrant will be acting as agent of the
Investor in connection with monitoring its investment in the Shares and Warrant
or enforcing its rights under the Transaction Documents. The Investor shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other purchaser of
Shares and a Warrant to be joined as an additional party in any proceeding for
such purpose.
3.2 Representations by US Investor. The Investor, if resident in the
United States, hereby represents to the Company with respect to the Investor's
purchase of Shares and one Warrant hereunder that:
(a) The Investor is acquiring the Shares and the Warrant
(including the Underlying Warrant Shares) for its own account, for investment,
and not with a view to any "resale" or "distribution" thereof within the meaning
of the Securities Act.
(b) The Investor understands that because the Shares, the
Warrants and the Underlying Warrant Shares have not been registered under the
Securities Act, it cannot dispose of any or all of such securities unless such
securities are subsequently registered under the Securities Act or exemptions
from such registration are available. The Investor understands that each
certificate or other instrument representing the Shares, the Warrants and the
Underlying Warrant Shares will bear the following legend or one substantially
similar thereto:
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). 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 Company may request an opinion of counsel as to
the availability of any such exemption.
(c) The Investor is sufficiently knowledgeable and
experienced in the making of investments so as to be able to evaluate the risks
and merits of its investment in the Company, and is able to bear the economic
risk of loss of its investment in the Company.
(d) The Investor will execute and deliver within the
applicable time periods all documentation as may be required to be executed by
the Investor by applicable securities laws to permit the purchase of the Shares
and one Warrant by the Investor on the terms herein set forth.
(e) The Investor believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares and one Warrant (including the Underlying Warrant Shares).
The Investor has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the offering of the Shares and
the Warrants (including the Underlying Warrant Shares) and the business,
properties and financial condition of the Company. The foregoing, however, does
not limit or modify the representations and warranties of the Company in Section
2 or the right of the Investor to rely thereon.
(f) The Investor is an "accredited investor" within the
meaning of SEC Rule 501 of Regulation D of the Securities Act, as presently in
effect and within the meaning of Section 1.1 of Ontario Securities Commission
Rule 45-501 (a copy of which is attached hereto as Annex C) and is purchasing
the Shares and one Warrant (including the Underlying Warrant Shares) hereunder
as principal, not for the benefit of any other person and not with a view to the
sale or distribution of all or any part of the Shares, the Warrant, or the
Underlying Warrant Shares.
(g) The Investor has been advised that the Shares, the
Warrant and the Underlying Warrant Shares have not been registered under the
Securities Act or under the "blue sky" laws of any jurisdiction and that the
Company, in issuing such securities is relying upon, among other things, the
representations and warranties of the Investor contained in this Section 3.
(h) The Investor acknowledges that the Company will be
issuing the Shares and the Warrant (including the Underlying Warrant Shares)
under an exemption from the prospectus filing and registration requirements of
the Ontario Securities Act, that the resale or other disposition of all or any
part of such securities will be restricted by the Ontario Securities Act, that
it has been advised to consult its legal advisers in connection with resale
restrictions that will pertain to the Shares, the Warrant and the Underlying
Warrant Shares, and that it is solely responsible for compliance with applicable
resale restrictions.
3.3 Representations by Ontario Investor. The Investor, if resident in
Ontario, hereby represents and warrants to the Company with respect to the
Investor's purchase of Shares and one Warrant hereunder that:
(a) The Investor acknowledges that the Company will be
issuing the Shares and the Warrant (including the Underlying Warrant Shares)
under an exemption from the prospectus filing and registration requirements of
the Ontario Securities Act, that the resale or other disposition of all or any
part of such securities will be restricted by the Ontario Securities Act, that
it has been advised to consult its legal advisers in connection with resale
restrictions that will pertain to the Shares, the Warrant and the Underlying
Warrant Shares and that it is solely responsible for compliance with applicable
resale restrictions.
(b) The Investor acknowledges that the Shares, the Warrant
and the Underlying Warrant Shares may only be resold in compliance with
applicable securities laws.
(c) The Investor agrees to comply with any relevant
securities legislation, order or policy applicable to the Investor concerning
the purchase of and holding of the Shares, the Warrant and the Underlying
Warrant Shares by the Investor and concerning any resale of all or any part of
such securities by the Investor. The Investor understands that each certificate
or other instrument representing the Shares, the Warrant and the Underlying
Warrant Shares will bear the following legend or one substantially similar
thereto:
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). 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 Company may request an opinion of counsel as to
the availability of any such exemption.
Unless permitted under securities legislation, the holder of the
securities shall not trade the securities before the earlier of (i)
the date that is 12 months and a day after the date 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 12 months and a
day after the later of (A) the distribution date, and (B) the date
the Company became a reporting issuer in the local jurisdiction of
the purchaser of the securities that are the subject of the trade.
(d) The Investor is an "accredited investor" within the
meaning of Section 1.1 of Ontario Securities Commission Rule 45-501 (a copy of
which is attached hereto as Annex C), is purchasing the Shares and one Warrant
(including the Underlying Warrant Shares) hereunder as principal, not for the
benefit of any other person and not with a view to the sale or distribution of
all or any part of the Shares, the Warrant or the Underlying Warrant Shares.
(e) The Investor will execute and deliver within the
applicable time periods all documentation as may be required to be executed by
the Investor by applicable securities laws to permit the purchase of the Shares
and one Warrant by the Investor on the terms herein set forth.
(f) The Investor is capable of assessing the proposed
investment as a result of the Investor's financial or investment experience or
as a result of advice received from a registered person other than the Company
or an affiliate thereof, and is able to bear the economic risk of loss of its
investment.
(g) The Investor is not a "U.S. Person" (as that term is
defined in Rule 902(k) of Regulation S promulgated under the Securities Act,
which definition includes, but is not limited to, an individual resident in the
United States, an estate or trust of which any executor or administrator or
trustee, respectively, is a U.S. Person and any partnership or corporation
organized or incorporated under the laws of the United States) and is not
acquiring the Shares or the Warrant (including the Underlying Warrant Shares)
for the account or benefit of a U.S. Person or a Person in the United States or
for resale in the United States and the Shares and
Warrants have not been offered to the Investor in the United States and the
Investor was not in the United States when the order was placed or this
Agreement was executed and delivered.
(h) The Investor will not offer or sell the Shares, the
Warrant or the Underlying Warrant Shares in the United States or to a U.S.
Person unless such securities are registered under the Securities Act or an
exemption from the registration requirements under the Securities Act and the
securities laws of all applicable states of the United States is available
3.4 Representations by Quebec Investor. The Investor, if resident in
Quebec, hereby represents and warrants to the Company with respect to the
Investor's purchase of Shares and one Warrant hereunder that:
(a) The purchase of the Shares and one Warrant (including
the Underlying Warrant Shares) was not made pursuant to any advertisement in
printed media of general or regular public circulation, or on radio, television
or any form of electronic display (including, without limitation, the Internet).
(b) The Investor acknowledges that the Company will be
issuing the Shares and the Warrant (including the Underlying Warrant Shares)
hereunder under an exemption from the prospectus filing and registration
requirements of the Ontario Securities Act 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 Ontario Securities Act and the Securities Act (Quebec),
that it has been advised to consult its legal advisers in connection with resale
restrictions that will pertain to the Shares, the Warrant and the Underlying
Warrant Shares, and that it is solely responsible for compliance with applicable
resale restrictions.
(c) The Investor acknowledges that the Shares, the Warrant
and the Underlying Warrant Shares may only be resold in compliance with
applicable securities laws.
(d) The Investor is purchasing the Shares, the Warrant and
the Underlying Warrant Shares as principal for its own account for investment,
not for the benefit of any other person, and the Shares and the Warrant have an
aggregate purchase price to the Investor of not less than CDN $150,000.
(e) The Investor agrees to comply with any relevant
securities legislation, order or policy applicable to the Investor concerning
the purchase of and holding of the Shares, the Warrant and the Underlying
Warrant Shares by the Investor and concerning any resale of all or any part of
such securities by the Investor. The Investor further acknowledges that it has
been advised to consult its own legal advisers with respect to applicable resale
restrictions and that it will be fully responsible for the compliance with such
restrictions. The Investor understands that each certificate or other instrument
representing the Shares, the Warrant and the Underlying Warrant Shares will bear
the following legend or one substantially similar thereto:
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). 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 Company may request an opinion of counsel as to
the availability of any such exemption.
Unless permitted under securities legislation, the holder of the
securities shall not trade the securities before the earlier of (i)
the date that is 12 months and a day after the date 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 12 months and a
day after the later of (A) the distribution date, and (B) the date
the Company became a reporting issuer in the local jurisdiction of
the purchaser of the securities that are the subject of the trade.
(f) The Investor is an "accredited investor" within the
meaning of Section 1.1 of Ontario Securities Commission Rule 45-501 (a copy of
which is attached hereto as Annex C), is purchasing the Shares and one Warrant
(including the Underlying Warrant Shares) hereunder as principal, not for the
benefit of any other person and not with a view to the sale or distribution of
all or any part of the Shares, the Warrant or the Underlying Warrant Shares.
(g) The Investor, if it is a corporation, has not been
established solely to permit the purchase of the Shares and one Warrant
(including the Underlying Warrant Shares) without a prospectus in reliance on an
exemption from the prospectus requirements of applicable securities legislation.
(h) The Investor will execute and deliver within the
applicable time periods all documentation as may be required to be executed by
the Investor by applicable securities laws to permit the purchase of the Shares
and one Warrant (including the Underlying Warrant Shares) by the Investor on the
terms herein set forth.
(i) The Investor is capable of assessing the proposed
investment as a result of the Investor's financial or investment experience or
as a result of advice received from a registered person other than the Company
or an affiliate thereof, and is able to bear the economic risk of loss of its
investment.
(j) The Investor is not a "U.S. Person" (as that term is
defined in Rule 902(k) of Regulation S promulgated under the Securities Act,
which definition includes, but is not limited to, an individual resident in the
United States, an estate or trust of which any executor or administrator or
trustee, respectively, is a U.S. Person and any partnership or corporation
organized or incorporated under the laws of the United States) and is not
acquiring the Shares or the Warrant (including the Underlying Warrant Shares)
for the account or benefit of a U.S. Person or a Person in the United States or
for resale in the United States and the Shares and Warrant have not been offered
to the Investor in the United States and the Investor was not in the United
States when the order was placed or this Agreement was executed and delivered.
(k) The Investor will not offer or sell the Shares, the
Warrant or the Underlying Warrant Shares in the United States or to a U.S.
Person unless such securities are registered under the Securities Act and the
laws of all applicable states of the United States or an exemption from the
registration requirements under the Securities Act and the securities laws of
all applicable states of the United States is available.
SECTION 4
MUTUAL CLOSING CONDITIONS
4.1 Mutual Closing Conditions to Closing. The Investor's obligation to
purchase and pay for its Shares and Warrant at the Closing, and the Company's
obligation to issue the Shares and the Warrant to the Investor and perform its
other obligations hereunder at the Closing, shall be subject to the fulfillment
to such party's satisfaction (or waiver in writing by the Company and the
Investor on or before the Closing Date) of the following conditions:
(a) Waiting Periods. All applicable waiting periods, if any,
under the HSR Act, the Canadian Competition Act and the Investment Canada Act
shall have expired or been terminated.
(b) No Order. No preliminary or permanent injunction or
other order or decree by any court or administrative or regulatory body which
prevents the consummation of the transactions at the Closing contemplated hereby
shall have been issued and remain in effect (the Company and the Investor
agreeing to use their reasonable best efforts to have any such injunction, order
or decree lifted).
(c) Consents. All governmental waivers, consents, orders and
approvals required, if any, under the Canadian Competition Act and the
Investment Canada Act for the consummation of the transactions at the Closing
contemplated hereby shall have been obtained and be in effect. All other
governmental waivers, consents, orders and approvals legally required, if any,
for the consummation of the transactions at the Closing contemplated hereby
shall have been obtained and be in effect, except where the failure to obtain
the same would not be reasonably likely, individually or in the aggregate, to
have a Company Material Adverse Effect following the Closing.
(d) No Conflicting Laws. No statute, rule or regulation
shall have been enacted by any state, provincial or Federal government or
governmental agency which would prevent the consummation of the transactions at
the Closing contemplated hereby.
(e) Minimum Condition. The Company shall have received and
accepted subscription agreements substantially equivalent to this Agreement from
Investors for an aggregate of ten million six hundred and twenty five thousand
(10,625,000) Shares, which
subscription agreements shall remain in full force and effect, enforceable by
the Company in accordance with their respective terms (such condition, the
"Minimum Condition"), and the concurrent transactions described in the Private
Placement Memorandum shall be consummated simultaneously with the Closing
hereunder.
SECTION 5
SEPARATE CLOSING CONDITIONS
5.1 Investor's Closing Conditions. The Investor's obligation to purchase
and pay for its Shares and Warrant at the Closing shall be subject to the
fulfillment to the Investor's satisfaction on or before the Closing Date (or
waiver in writing by the Investor) of the following conditions:
(a) Satisfaction of Conditions. The representations and
warranties of the Company contained in this Agreement shall be, if specifically
qualified by materiality or Company Material Adverse Effect, true in all
respects, and, if not so qualified, shall be true in all material respects, in
each case as of the date of execution of this Agreement by the Company and as of
the Closing Date, and the covenants and agreements contained in this Agreement
to be complied with by the Company on or before the Closing shall have been
complied with in all material respects. The Company shall have delivered to the
Investor a certificate dated as of the Closing Date to the foregoing effect.
(b) Delivery of Warrant and Share Certificates. The Company
shall have executed and delivered to the Investor (or shall have caused to be
executed and delivered to the Investor by the appropriate persons) (i) a stock
certificate issued to the Investor evidencing the Shares issuable to the
Investor at the Closing and (ii) one Warrant to purchase 10% of the number of
Shares purchased by the Investor, rounded down to the nearest whole Share.
(c) Registration Rights Agreement. The Company shall have
duly authorized, executed and delivered to the Investor the Registration Rights
Agreement.
5.2 Company's Closing Conditions. The Company's obligations to issue the
Shares and one Warrant to the Investor at the Closing and perform its other
obligations hereunder with respect to the Investor at the Closing shall be
subject to the fulfillment to the Company's satisfaction at or before the
Closing Date (or waiver in writing by the Company) of the following conditions:
(a) Satisfaction of Conditions. The representations and
warranties of the Investor contained in this Agreement shall be, if specifically
qualified by materiality, true in all respects, and, if not so qualified, shall
be true in all material respects, in each case as of the date of the Investor's
execution of this Agreement and as of the Closing Date, and the covenants and
agreements contained in this Agreement to be complied with by the Investor on or
before the Closing shall have been complied with in all material respects. If
requested, the Investor shall have delivered to the Company a certificate dated
as of the Closing Date to the foregoing effect.
(b) Purchase of Shares and Warrant. The Investor shall have
purchased the Shares and Warrant to be purchased by the Investor at the Closing
pursuant to the
terms of this Agreement, and the Company shall have received the Aggregate
Purchase Price from the Investor, through the Escrow Agent or otherwise, in
accordance with the terms of this Agreement.
SECTION 6
COVENANTS
6.1 Expenses. Each party hereto shall bear and pay its own fees and
expenses incurred in connection with the negotiation, execution, delivery and
performance of this Agreement, the Ancillary Documents and the transactions
contemplated hereby and thereby.
6.2 Conduct of Business by the Company Pending Final Closing. The
Company covenants and agrees that, prior to the Closing Date or earlier
termination of this Agreement as provided herein, except as contemplated by this
Agreement or as disclosed in the Private Placement Memorandum the Company shall,
and shall cause its subsidiaries to, act and carry on their respective
businesses in the ordinary course of business consistent with past practice and
use its and their respective reasonable best efforts to preserve intact their
current material business organizations, keep available the services of their
current officers and employees (except for terminations of employees in the
ordinary course of business) and preserve their material relationships with
others having business dealings with them.
6.3 All Reasonable Efforts; Agreement to Cooperate.
(a) Subject to the terms and conditions herein provided,
each party hereto shall use its reasonable best efforts to take, or cause to be
taken, all action and to do, or cause to be done, and to assist and cooperate
with the other party in doing, all things necessary, proper or advisable
consistent with applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement; provided, however, that nothing
in this Section 6.3 shall require the Investor or the Company to agree to any
modification of this Agreement or any of the Ancillary Documents or the Investor
to make an investment in the Company that is greater than the amount set forth
opposite the Investor's name on the signature page hereto.
(b) Without limiting the generality of the foregoing, and
notwithstanding anything in this Agreement to the contrary, the Company shall
use its reasonable best efforts to take or cause to be taken all reasonable
action and to do, or cause to be done, and to assist and cooperate with the
other party hereto in doing, all things necessary, proper or advisable to obtain
all governmental waivers, consents, authorizations, orders and approvals, all
consents, amendments to or waivers from other parties under the terms of all
Material Contracts and all other material permits, concessions, franchises or
licenses applicable to the Company or its subsidiaries required as a result of
the transactions contemplated by this Agreement.
SECTION 7
ACCESS
7.1 Access; Notification of Certain Matters.
(a) Prior to the Closing Date or the earlier termination of
this Agreement as provided herein, upon reasonable notice, the Company shall
afford the Investor and its representatives reasonable access during normal
business hours to the offices, properties, books, records and personnel of the
Company and its subsidiaries and such additional information concerning the
business and properties of the Company and its subsidiaries as the Investor and
its representatives may reasonably request. The Company shall instruct its and
its subsidiaries' employees, counsel and financial advisors to cooperate with
the Investor in its investigation of the business of the Company and its
subsidiaries during such period.
(b) Prior to the Closing Date or the earlier termination of
this Agreement as provided herein, the Company shall promptly (and in any event
within five (5) business days after obtaining knowledge thereof) notify the
Investor of any action or event which could reasonably be expected to have a
Company Material Adverse Effect.
7.2 Confidential Information. The Company and the Investor for
themselves, their respective directors, officers, employees, Affiliates, agents
and representatives covenant with each other that they each will use all
information provided by or relating to the other party acquired by them pursuant
to the provisions of this Agreement or in the course of negotiations with, or
examinations of, the other party (the "Confidential Information") only in
connection with the transactions contemplated hereby and not in any way
detrimental to the other party and shall cause the Confidential Information
obtained by them pursuant to this Agreement and such negotiations and
examinations to be treated as confidential, except as may otherwise be required
by law or the rules or regulations of Nasdaq or as may be necessary or
appropriate in connection with the enforcement of this Agreement or any
instrument or document referred to herein or contemplated hereby, and provided
that to the extent that any such party or any Affiliate thereof may become
legally compelled to disclose any Confidential Information, such party shall
give notice to and consult with the party providing such information prior to
disclosing such information. Notwithstanding the foregoing, no recipient of
Confidential Information (each, a "Recipient") shall be required to maintain the
confidentiality of Confidential Information that (i) is or becomes generally
available to the public other than as a result of disclosure by the Recipient or
any party to whom the Recipient has disclosed such information; (ii) is obtained
by the Recipient, on a non-confidential basis, from a third party entitled to
disclose such information or (iii) is already known by the Recipient at the time
such information is received by the Recipient. In the event of termination of
this Agreement, each Recipient will cause to be delivered to the party providing
such information all documents, work papers and other material containing
Confidential Information obtained by it from such party, whether so obtained
before or after the execution of this Agreement.
SECTION 8
TERMINATION
8.1 Termination. This Agreement may be terminated pursuant to written
notice of such termination to the other party as follows:
(a) by mutual written consent of the Company and the
Investor;
(b) by either the Company or the Investor if the Closing
shall not have occurred on or before May 30, 2004; provided, however, that the
right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose breach has caused the failure of the Closing to
occur on or before such date;
(c) by either the Company or the Investor if there shall be
any restraining order, injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
Closing or any of the other transactions contemplated hereby which is final and
nonappealable;
(d) by the Investor upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have become
untrue, such that the conditions set forth in Section 5.1(a) would not be
satisfied ("Terminating Company Breach"); provided, however, that if such
Terminating Company Breach is curable by the Company through the exercise of its
reasonable best efforts and for as long as the Company continues to exercise
such efforts, but not beyond the date specified in paragraph (b) above, the
Investor may not terminate this Agreement under this Section 8.1(d); and
(e) by the Company upon a breach of any representation,
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or if any representation or warranty of the Investor shall have
become untrue, such that the conditions set forth in Section 5.2(a) would not be
satisfied.
8.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 8.1, this Agreement shall forthwith become void as to the
Company and the Investor, there shall be no liability under this Agreement on
the part of the Company or the Investor, and all rights and obligations of the
Company and the Investor shall cease, other than the obligations set forth in
Sections 6.1 and 7.2 hereof; provided, however, that nothing herein shall
relieve any party from liability for any willful or intentional breach of any
covenant or agreement of such party contained in this Agreement.
SECTION 9
GENERAL
9.1 Amendments, Waivers and Consents. No covenant or other provision
hereof may be waived otherwise than by a written instrument signed by the party
so waiving such covenant or other provision. The waiver or failure to insist
upon strict compliance with any
condition or provision hereof shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other waiver or failure. This Agreement may not be
amended or modified except by an instrument in writing signed by the Company and
the Investor.
9.2 Survival of Representations, Warranties and Covenants, Assignability
of Rights. All representations and warranties made herein and in the
certificates, exhibits or schedules delivered or furnished by or on behalf of a
party to the other party in connection herewith shall terminate as of the
Closing. Except as otherwise provided in this Agreement, all covenants,
agreements, representations and warranties shall inure to the benefit of the
successors and assigns of the parties.
9.3 Governing Law. This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of New
York (without giving effect to principles of conflicts of law the effect of
which would cause the application of domestic substantive laws of any other
jurisdiction).
9.4 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts (including by facsimile), each of which when so executed
and delivered shall be taken to be an original; but such counterparts shall
together constitute but one and the same document.
9.5 Notices and Demands. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally, three
business days after being mailed by registered or certified mail (return receipt
requested) or when sent via confirmed facsimile to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(i) If to any Investor, to the address set forth on
the Investor's signature page hereto, and
(ii) If to the Company:
Capital Environmental Resource Inc.
0000 Xxxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx
XxXxxxxxx, Will & Xxxxx
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
9.6 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any
provision of this Agreement shall be deemed prohibited or invalid under such
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Agreement.
9.7 Integration. This Agreement, including the exhibits, documents and
instruments referred to herein or therein, constitutes all of the agreements and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
9.8 No Assignment. This Agreement may not be assigned, pledged,
hypothecated or otherwise transferred by the Company or the Investor.
9.9 Third-Party Beneficiary. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any Person
other than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
[Signature pages follow]
IN WITNESS WHEREOF, the undersigned have executed this Common Share
Subscription Agreement as of the dates indicated below.
INVESTOR
Date:_________________________ ______________________________________________
Name:
Number of Shares: ____________________________
Aggregate Purchase Price: US $ _______________
Country of Residence: ________________________
State or Province of Residence: ______________
Address:
Accepted:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By ________________________________ Date: April 30, 2004
Name: Xxxx X. Xxxxxx
Title: Executive Vice President, General Counsel and Secretary
FORM OF WARRANT
Please see Exhibit [ ]
Annex B
GLOSSARY
As used herein, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Ancillary Documents" means the Registration Rights Agreement, the
Warrant and any other document referred to herein that is required to be
executed by the Company or the Investor as a condition to closing.
"Canadian Competition Act" means the Competition Act (Canada), R.S.
1985 c. C-34, as amended.
"Company Material Adverse Effect" shall mean any material adverse
effect on the business, operations, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
"Disclosure Schedule" means the disclosure statement delivered at or
prior to the execution of this Agreement by the Company to the Investor setting
out certain information relating to the Company.
"Environmental Law" means any Federal, state, provincial, local or
foreign law, statute, ordinance, rule, regulation, code, standard, guideline,
policy, license, permit, authorization, approval, consent, legal doctrine,
order, judgment, decree, injunction, requirement or agreement with any
governmental entity relating to (x) the protection, preservation or restoration
of the environment (including, without limitation, air, surface water,
groundwater, surface land, subsurface land or plant and animal life) or to human
health or safety or (y) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances, in each case as amended
and as in effect on the Closing Date.
"Escrow Agent" means Sterling Bank, who shall act as escrow agent
for the receipt from Investors and disbursement to the Company (or return to the
applicable Investor in the case of termination of a subscription agreement as to
such Investor) of subscription funds pursuant to that certain Escrow Agreement
dated as of April 6, 2004 among the Company, the Escrow Agent and Xxxxxxx Xxxxxx
Xxxxxx Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Federal" shall mean of or relating to the federal government of
each of the United States and Canada.
"GAAP" means generally accepted accounting principles as in effect
in the United States of America from time to time.
"Hazardous Substance" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive, or dangerous, or
otherwise regulated, under any Environmental Law and any substance that may
harm, impair or cause an adverse effect to the environment (including, without
limitation, air, surface water, groundwater, surface land, subsurface land or
plant and animal life) or to human health or safety and property. Hazardous
Substance includes any substance to which exposure is regulated by any
government authority or any Environmental Law including, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos, or
asbestos containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Investment Canada Act" means the Investment Canada Act, R.S. 1985,
c. 28 (1st Supp.), as amended.
"Liability" means any liability or obligation (whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or become due).
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, claim or charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge).
"Nasdaq" shall mean The Nasdaq Stock Market, including the Nasdaq
National Market and the Nasdaq SmallCap Market.
"Ontario Securities Act" means the Securities Act (Ontario) R.S.O
1990, c.S.5 (as amended) and the rules and regulations promulgated thereunder.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or any other entity or organization.
"Rights Agreement" means that certain Rights Agreement between the
Company and American Stock Transfer & Trust Company, as amended.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
As used herein, the following terms shall have the meanings ascribed to
them in the Section of this Agreement opposite each such term:
Term Section
---- -------
Aggregate Purchase Price 1.2
Agreement Preamble
Closing 1.5
Closing Date 1.5
Common Shares Preamble
Company Preamble
Company Financial Statements 2.4(b)
Company Required Statutory Approvals 2.3(c)
Company SEC Reports 2.4(a)
"control" Annex B ("Affiliate"
definition)
Confidential Information 7.2
Credit Facility 2.9
Investor Preamble
Investors Preamble
Material Contract 2.14
Minimum Condition 4.1(e)
Preferred Shares 2.2(a)
Private Placement Memorandum 2.4(a)
Recipient 7.2
Registration Rights Agreement Preamble
Shares 1.1
Terminating Company Breach 8.1(d)
Underlying Warrant Shares 2.2(c)
Warrants Preamble
Annex C
DEFINITION OF "ACCREDITED INVESTOR" UNDER SECTION 1.1 OF
ONTARIO SECURITIES COMMISSION RULE 45-501
Annex D
REGISTRATION RIGHTS AGREEMENT
Please see Exhibit [ ]
