EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
March 31, 2003 between Capital Environmental Resource Inc., a corporation
incorporated under the laws of the Province of Ontario (the "Company"), and the
parties identified as Investors on Schedule A hereto (each individually an
"Investor" and collectively the "Investors").
WHEREAS, the Company and the Investors have entered into that certain
Series 1 Preferred Subscription Agreement, dated as of March 31, 2003 (the
"Series 1 Preferred Subscription Agreement"), pursuant to which the Company is
issuing and selling to the Investors (i) up to an aggregate of $50,000,000 of
the Company's Series 1 Preferred Shares and (ii) warrants to purchase common
shares of the Company ("Warrants");
WHEREAS, the execution and delivery of this Agreement is a condition
to the closing of the Series 1 Preferred Subscription Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Common Shares" means the common shares of the Company.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
(c) "Holder" means any Person owning or having the right to
acquire Registrable Securities, or any assignee thereof in accordance with
Section 11 hereof.
(d) "Initiating Holders" means the Holder(s) initiating a
registration request under Section 2(a) hereof.
(e) "Investor Request" means a request from Holders that in the
aggregate beneficially own at least twenty-five percent (25%) of the Registrable
Securities outstanding as of the date of such request that the Company file a
registration statement under the Securities Act with respect to the Registrable
Securities.
(f) "majority in interest of the Initiating Holders" means
Initiating Holders holding a majority of the Registrable Securities held by all
Initiating Holders.
(g) "Person" means any individual, partnership, limited
liability company, joint venture, corporation, association, trust or any other
entity or organization.
(h) "Preferred Shares" means Series 1 Preferred Shares of the
Company owned by an Investor or any assignee thereof in accordance with Section
11 hereof.
(i) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(j) "Registrable Securities" means (1) any Common Shares
directly or indirectly issuable or issued upon conversion of the Preferred
Shares, (2) any Common Shares issuable upon exercise of the Warrants and (3) any
Common Shares issued to the Investor (or any assignee thereof in accordance with
Section 11) as (or issuable upon conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Common Shares; PROVIDED,
HOWEVER, that any Registrable Securities sold by an Investor in a transaction in
which such Investor's rights under this Agreement are not assigned pursuant to
Section 11 below shall cease to be Registrable Securities from and after the
time of such sale. In addition, any Common Shares shall cease to be Registrable
Securities from and after such time as they are sold to the public in a
registered public offering or pursuant to Rule 144 under the Securities Act.
(k) "SEC" means the United States Securities and Exchange
Commission.
(l) "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.
(m) "Violation" means any of the following statements, omissions
or violations: (i) any untrue statement or alleged untrue statement of a
material fact contained in a registration statement filed pursuant to this
Agreement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents filed under
state securities or "blue sky" laws in connection therewith, or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
2. REQUEST FOR REGISTRATION.
(a) If the Company shall receive a written Investor Request
after September 27, 2003, then the Company shall, within ten (10) days of the
receipt thereof, give written notice of such request to all Holders and, subject
to the limitations of Section 2(c) below, file (as expeditiously as practicable,
and in any event within sixty (60) days after the receipt of such request) and
use its best efforts to have declared effective a registration statement under
the Securities Act on any applicable form as the Initiating Holders may
reasonably request (which may include a "shelf" registration statement for use
in connection with a delayed or continuous offering under Rule 415 promulgated
under the Securities Act, provided that the Company, at its option, may use a
Form S-3 or F-3 for such purpose so long as it is eligible to use such a form)
with respect to all Registrable Securities which the Holders request to be
registered by the giving
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of notice to the Company within thirty (30) days after the mailing of the
Company's notice referred to above, each such notice to be given in accordance
with Section 18 below.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2 and the Company shall include such information in the written
notice referred to in Section 2(a). In the event of an underwritten offering,
the right of any Holder to include such Holder's Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters so
selected for such underwriting by a majority in interest of the Initiating
Holders; PROVIDED, HOWEVER, that no Holder shall be required to make any
representations, warranties or indemnities except as they relate to such
Holder's ownership of shares and authority to enter into the underwriting
agreement and to such Holder's intended method of distribution, and the
liability of such Holder (whether by indemnification, contribution or otherwise)
shall be limited to an amount equal to the net proceeds from the offering
received by such Holder. Notwithstanding any other provision of this Section 2,
if the underwriter advises the Initiating Holders that marketing factors require
a limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise the Company and the Company shall so advise all Holders
of Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares that may be included in the underwriting shall be
allocated as follows: (i) first, among the Holders of Registrable Securities
that have elected to participate in such underwritten offering, in proportion
(as nearly as practicable) to the amount of Registrable Securities requested by
such Holders to be included in such offering in accordance with Section 2(a)
until such Holders have included in the underwriting all shares requested by
such Holders to be included, (ii) second, among any other holders of Common
Shares who have exercised any piggyback registration rights with respect to such
registration that are superior to the piggyback registration rights set forth in
this Agreement, and (iii) thereafter among any other holders of Common Shares
who have exercised their piggyback registration rights, if permitted hereunder,
with respect to such registration.
(c) The Company shall be obligated to effect only four (4)
registrations pursuant to an Investor Request under this Section 2; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect more than one (1)
registration pursuant to this Section 2 in any six (6) month period. The Company
shall be obligated to cause any registration required to be effected pursuant to
this Section 2(c) to become and remain effective throughout the proposed plan of
distribution or for a period of six months, whichever is shorter. The Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to this Section 2 if the registration request is subsequently
withdrawn at the request of a majority in interest of the Initiating Holders (in
which case all Initiating Holders shall bear such expenses pro rata based upon
the number of Registrable Securities that were requested to be registered in the
withdrawn registration by the Initiating Holders); PROVIDED, HOWEVER, that if at
the time of such withdrawal, the Initiating Holders have learned of a material
adverse change in the condition, business, or
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prospects of the Company different from that known to the Initiating Holders at
the time of their request and have withdrawn the request with reasonable
promptness following disclosure by the Company of such material adverse change,
then the Company shall pay all such expenses, the Initiating Holders shall not
be required to pay any of such expenses, and the Initiating Holders shall retain
their rights pursuant to this Section 2.
(d) Notwithstanding the foregoing, if the Company shall furnish
to the Initiating Holders a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be detrimental to the Company and
its stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for up to sixty (60) days after receipt of
the request of the Initiating Holders; PROVIDED, HOWEVER, that the Company may
not utilize this right for more than an aggregate of one hundred twenty (120)
days in any twelve (12) month period; PROVIDED, FURTHER, that if at the time of
any Investor Request for a registration pursuant to this Section 2, the Company
has fixed plans (following a resolution of the Board of Directors of the Company
so authorizing) to file within sixty (60) days after such request a registration
statement covering the sale of any of its securities in a public offering under
the Securities Act, no registration shall be required to be initiated pursuant
to this Section 2 until one hundred twenty (120) days after the effective date
of such Company registration unless the Company is no longer proceeding
diligently to effect such registration and so long as the Company shall provide
the Holders with the right to participate in such public offering pursuant to,
and subject to, Section 3.
(e) Upon the request of a majority of the Initiating Holders for
the termination of a registration, the Company shall terminate such registration
and such registration shall not be considered one of the four (4) registrations
required under Section 2(c); provided, that the Initiating Holders pay the
expenses of such registration in accordance with Section 2(c) unless excused
from doing so under the proviso set forth in Section 2(c).
3. COMPANY REGISTRATION.
(a) If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than Holders of Registrable Securities) any of
its Common Shares under the Securities Act in connection with the public
offering of such Common Shares for cash (other than a registration on Form S-8
(or similar or successor form) relating to the sale of securities to
participants in a Company stock plan or to other compensatory arrangements to
the extent includable on Form S-8 (or similar or successor form), or a
registration on Form F-4 or Form S-4 (or similar or successor form)), the
Company shall, at such time and in any event at least twenty (20) days prior to
the first filing of the registration statement, promptly give each Holder
written notice of such registration. Upon the written request of any Holder
given within twenty (20) days after mailing of such notice by the Company in
accordance with Section 18, the Company shall use its best efforts to cause to
be registered under the Securities Act all of the Registrable Securities that
each such Holder has requested to be registered, subject to the provisions of
Section 8. The Company shall have no obligation under this Section 3 to make any
offering of its securities, or to complete an offering of its securities that it
proposes to make. Notwithstanding any other
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provision of this Section 3, if the underwriter, if any, advises the Company
that marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise the all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares that may be included in the underwriting shall be allocated as
follows: (i) first, to the Company (including for this purpose a registration
effected by the Company for stockholders other than Holders of Registrable
Securities as referenced in the first sentence of this Section 3(a)), (ii)
second, among any other holders of Common Shares who have exercised any
piggyback registration rights with respect to such registration that are
superior to the piggyback registration rights set forth in this Agreement, and
(iii) thereafter among Holders of Registrable Securities who have exercised
their piggyback registration rights with respect to such registration.
(b) If (but without any obligation to do so) the Company
proposes to file a prospectus or otherwise qualify (including for this purpose a
filing or qualification effected by the Company for stockholders other than
Holders of Registrable Securities) any of its Common Shares for offering to the
public in any province of Canada, then any Holder who would have a registration
right in accordance with Section 3(a) if those provisions were to become
operative shall have rights similar to those granted in Section 3(a) hereof in
respect of any prospectus filed by the Company with the securities regulatory
authorities of one or more provinces or territories of Canada in connection with
the qualification by prospectus of any of the Company's securities for
distribution to the public in any such Canadian jurisdictions, with any
adjustments as may be necessary to achieve the results intended by Section 3(a)
hereof and all related provisions of this Agreement in the context of a sale of
Registrable Securities in Canada made in compliance with applicable Canadian
securities laws; it being understood that the Company shall comply with the
provisions of Section 4 and the other provisions hereof in connection with such
offering, adjusted as necessary in the context of a sale of Registrable
Securities in any province or territory of Canada made in compliance with
applicable Canadian securities laws.
4. OBLIGATIONS OF THE COMPANY. Whenever required under this Agreement
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 promptly, and, upon the request of
the Holders of a majority of the Registrable Securities being registered
thereunder, keep such registration statement effective for up to six (6) months
or until the Holders have completed the distribution referred to in such
registration statement, whichever occurs first (but in any event for at least
any period required under the Securities Act); provided that before filing such
registration statement or any amendments thereto, the Company will furnish to
the Holders copies of all such registration statements or amendments thereto
proposed to be filed.
(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 Securities Act with respect to the disposition of all
securities covered by such registration statement.
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(c) Furnish to the Holders such number of copies of such
registration statement and of each amendment and supplement thereto (in each
case without exhibits unless requested by such Holders), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents as any of the
Holders 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 states or 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 (i) to qualify to do business in any state or
jurisdiction where it would not otherwise be required to qualify but for the
requirements of this clause (d), or (ii) to file a general consent to service of
process in any such state or jurisdiction.
(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.
(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 Securities 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, in light of the circumstances under which such statements
were made, not misleading.
(g) Notify each Holder of Registrable Securities covered by such
registration statement and such Holder's underwriters, if any, and confirm such
advice in writing: (i) when the registration statement has become effective,
(ii) when any post-effective amendment to the registration statement becomes
effective and (iii) of any request by the SEC for any amendment or supplement to
the registration statement or prospectus or for additional information.
(h) Notify each Holder of Registrable Securities if at any time
the SEC should institute or threaten to institute any proceedings for the
purpose of issuing, or should issue, a stop order suspending the effectiveness
of the Registration Statement. Upon the occurrence of any of the events
mentioned in the preceding sentence, the Company will use its reasonable best
efforts to prevent the issuance of any such stop order or to obtain the
withdrawal thereof as soon as possible. The Company will advise each Holder of
Registrable Securities promptly of any order or communication of any public
board or body addressed to the Company suspending or threatening to suspend the
qualification of any Registrable Securities for sale in any jurisdiction.
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(i) in the case of an offering that is an underwritten public
offering, (x) cause to be delivered an opinion of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the Holders and the underwriters, and (y) cause to be delivered, on the date
that the registration statement with respect to such securities becomes
effective, a "comfort" letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to the underwriters, addressed to
the underwriters, and, a reaffirmation of such letter on the date that such
Registrable Securities are delivered to the underwriters for sale.
(j) As soon as practicable after the effective date of the
registration statement, and in any event within sixteen (16) months thereafter,
have "made generally available to its security holders" (within the meaning of
Rule 158 under the Securities Act) an earnings statement (which need not be
audited) covering a period of at least twelve (12) months beginning after the
effective date of the registration statement and otherwise complying with
Section 11(a) of the Securities Act.
(k) List the Registrable Securities which are registered
pursuant to Section 2 or Section 3 on each national securities exchange or
automated quotation system upon which the shares to be registered are traded.
5. AMENDMENTS, SUPPLEMENTS TO PROSPECTUS. Immediately upon receipt of
a notice referred to in Section 4(f) hereof, each Holder agrees to (i) cease
making sales of securities pursuant to any then effective registration statement
or any prospectus contained therein until it has received from the Company an
amendment or supplement to the registration statement or prospectus and (ii) to
promptly deliver to the Company any copies of the registration statement or such
prospectus then in its possession.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling Holder that such Holder
shall promptly 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.
7. EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including (without limitation) all
registration, filing and qualification fees, printers' fees, fees and expenses
of counsel and accountants for the Company and the reasonable fees and
disbursements of one firm of counsel for the selling Holders, shall be borne by
the Company, even if such registrations, filings, or qualifications do not
become effective, subject to Section 2(c).
8. UNDERWRITING REQUIREMENTS. In connection with any underwritten
offering initiated by the Company or any stockholder other than a Holder of
Registrable Securities, the Company shall not be required under Section 3 to
include any Holder's securities in such
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underwriting unless such Holder accepts the terms of the underwriting as agreed
upon between the Company or such stockholder and the underwriters selected by
the Company or such stockholder; PROVIDED, HOWEVER, that no Holder participating
in such underwriting shall be required to make any representations, warranties
or indemnities except as they relate to such Holder's ownership of shares and
authority to enter into the underwriting agreement and to such Holder's intended
method of distribution, and the liability of such Holder (whether by
indemnification, contribution or otherwise) shall be limited to an amount equal
to the net proceeds from the offering received by such Holder. If a Holder
complies with the requirements set forth in this Section 8, then such Holder
shall have the right to be included in any underwritten offering by the Company,
whether initiated by the Company or any stockholder, subject to the terms of
Section 3 and to the limitations set forth below in this Section 8. If the total
number of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the largest number of
securities that the underwriters reasonably believe can be sold without having
an adverse effect on such offering, then the Company shall be required to
include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not have an adverse
effect on such offering. The securities included in such offering shall be
allocated as follows: (i) first, the securities that the Company or any
stockholders initiating the offering propose to sell, (ii) second, if any, other
securities required to be registered pursuant to agreements entered into prior
to the date of this Agreement which by their terms state that the signatories
thereof have priority in the event of such cutbacks over all beneficiaries under
subsequent registration rights agreements, (iii) third, among all Holders of
Registrable Securities that have elected to participate in such underwritten
offering, and other holders of Common Shares who are signatories to agreements
entered into prior to the date of this Agreement which, by their terms, give
such other holders priority equal to that of the Holders, in proportion (as
nearly as practicable) to the amount of Registrable Securities and Common
Shares, respectively, owned by such holders until such holders have included in
the underwriting all shares requested by such holders to be included, and (iv)
thereafter among any other holders of Common Shares who have exercised their
piggyback registration rights, if permitted hereunder, with respect to such
registration.
9. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) The Company will indemnify and hold harmless each Holder,
its heirs, personal representatives and assigns, each of such Holder's officers,
directors, partners, employees and affiliates, any underwriter (as defined in
the Securities Act) for such Holder and each Person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal, state, Canadian, or provincial securities law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon a Violation; and the Company will pay to each such
indemnified party, 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 Section 9(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage,
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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 to a particular indemnified party 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 such indemnified party.
(b) Each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers, each Person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder (and any affiliate thereof) 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
Securities Act, the Exchange Act or other federal, state, Canadian, or
provincial securities 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
Section 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 Section 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, FURTHER, that in no event shall the
liability of any Holder under this Section 9(b) or otherwise in connection with
the offering exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 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 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 shall
have the right to retain its own counsel (but no more than one separate counsel,
plus any required local counsel, with respect to all indemnified parties) with
the fees and expenses to be paid by the indemnifying party, if in the reasonable
opinion of counsel to an indemnified party, representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential conflicts of interests between, or different defenses
available to, 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 shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 9 except if, and only to the extent that,
the indemnifying party is actually prejudiced thereby.
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(d) The obligations of the Company and Holders under this
Section 9 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Agreement.
(e) Any indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party.
(f) If for any reason the foregoing indemnity is unavailable,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, then, in lieu of indemnifying such
indemnified party, the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by or on behalf of the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
Notwithstanding anything to the contrary in this Section 9, no Holder shall be
required, pursuant to this Section 9 or otherwise in connection with the
offering, to contribute any amount in excess of the net proceeds received by
such indemnifying party from the sale of Common Shares in the offering to which
the losses, claims, damages, liabilities or expenses of the indemnified party
relate.
10. REPORTS UNDER THE EXCHANGE ACT. With a view to making available
to the Holders the benefits of Rule 144 under the Securities 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, the Company agrees
to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) remain registered under the Exchange Act and file with the
SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
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(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 Rule 144, (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.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned in whole or in part to any Person acquiring Registrable Securities from
a Holder in compliance with the applicable provisions of any relevant agreement
between such Holder and the Company, provided that such transferee or assignee
delivers to the Company a written instrument by which such transferee or
assignee agrees to be bound by the obligations imposed on Holders under this
Agreement to the same extent as if such transferee or assignee was a party
hereto.
12. AMENDMENT; WAIVER. Any provision of this Agreement may be amended
only with the written consent of the Company and Holders holding a majority of
the Registrable Securities. The observance of any provision of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of Holders holding
a majority of the Registrable Securities. Any amendment or waiver effected in
accordance with this Section 12 shall be binding upon each Holder of Registrable
Securities at the time outstanding, each future Holder of all such securities,
and the Company.
13. CHANGES IN REGISTRABLE SECURITIES. If, and as often as, there are
any changes in the Registrable Securities by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or consolidation.
14. OTHER AGREEMENTS; PRIORITY. The Company has granted rights to
shareholders to request or require the Company to register any securities issued
by the Company, including (i) the rights granted to certain Persons pursuant to
the Registration Rights Agreement, dated as of September 7, 2001, by and between
the Company and the investors named therein, (ii) the rights granted to certain
Persons pursuant to the Registration Rights Agreement, dated as of February 6,
2002, by and between the Company and the investors named therein, (iii) the
rights to be granted in connection with the sale and issuance of Series 2
Preferred Shares on or about the date hereof and (iv) the rights granted to the
Holders herein. The piggyback registration rights granted hereunder pursuant to
Section 3 shall be subordinate in right to the piggyback registration rights set
forth in the agreements referenced in phrases (i) and (ii) above and may be
subordinate to the piggyback registration rights set for in the agreement
referenced in phrase (iii) above.
15. ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof. Nothing
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in this Agreement, express or implied, is intended to confer upon any Person,
other than the parties hereto and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided herein.
16. GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of Delaware as such laws are applied to agreements
between Delaware residents entered into and to be performed entirely within
Delaware.
17. SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, permitted assigns (as provided
in Section 11), heirs, executors and administrators of the parties hereto.
18. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified (including by
telecopier, receipt confirmed) or three (3) days after being sent by registered
or certified mail, postage prepaid and addressed to the party to be notified (a)
if to a party other than the Company, at such party's address set forth at the
end of this Agreement or at such other address as such party shall have
furnished to the Company in writing, or (b) if to the Company, at its address
set forth at the end of this Agreement, or at such other address as the Company
shall have furnished to the parties in writing.
19. SEVERABILITY. Any invalidity, illegality or limitation on the
enforceability of this Agreement or any part hereof, by any party whether
arising by reason of the law of the respective party's domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of
this Agreement with respect to other parties. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
20. TITLES AND SUB-TITLES. The titles and sub-titles of the Sections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
21. DELAYS OR OMISSIONS; REMEDIES CUMULATIVE. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the
parties, upon any breach or default of another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach or default, or any acquiescence therein, or of any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character by a party of any breach or default under
this Agreement, or any waiver by a party of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to a party, shall be cumulative and
not alternative.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts (including by facsimile), each of which shall be deemed an
original, but all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first above written.
CAPITAL ENVIRONMENTAL RESOURCE INC.
By:
-------------------------------------------------
Name:
Title:
INVESTOR
----------------------------------------------------
Name:
Title (if applicable):
Address:
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