Exhibit 10.6
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT made this _________ day of
April, 1999.
BETWEEN:
CAPITAL ENVIRONMENTAL RESOURCE INC., a corporation incorporated
pursuant to the laws of the Province of Ontario (the
"Corporation")
- and -
The holders of Common Shares of the Corporation listed in Schedule
1 to this Agreement (collectively, the "Common Shareholders")
- and -
The holders of the Preference Shares of the Corporation listed in
Schedule 2 to this Agreement (collectively, the "Preference
Shareholders")
- and -
The holders of the Warrants of the Corporation listed in Schedule
3 to this Agreement (collectively, the "Warrant Holders")
WHEREAS the Corporation, the Preference Shareholders, and the Warrant
Holders are parties to a shareholders agreement dated July 16, 1997 as amended
by agreements INTER ALIA adding certain of the Common Shareholders as parties
thereto dated June 16, 1998, and by further amendments dated October 8, 1998 and
October 23, 1998 (collectively, the "Shareholders Agreement");
AND WHEREAS the Corporation intends to complete an initial public
offering of common shares pursuant to a registration statement on Form F-1 to be
filed with the United States Securities and Exchange Commission under the U.S.
SECURITIES ACT OF 1933, as amended, in April or May of 1999 (the "Initial Public
Offering");
AND WHEREAS each of the Preference Shareholders have agreed that the
convertible Preference Shares held by them, as set out in Schedule 2 hereto,
shall be automatically converted into common shares coincident with the closing
of the Initial Public Offering, provided that the issue price to the public of
the common shares of the Corporation on such Initial Public Offering is not less
than U.S. $18.00 per share (prior to taking into account any subdivision of the
common stock authorized in connection with such Initial Public Offering) (a
"Qualifying Public Offering");
AND WHEREAS as a result of the conversion, the Preference Shareholders
will be the holders of that number of common shares set opposite their
respective names in Schedule 2 hereto;
AND WHEREAS the parties wish to amend and restate the Shareholders
Agreement conditional on and effective upon the closing of a Qualifying Public
Offering to, among other things, restate the rights of the parties as
shareholders of the Corporation.
AND WHEREAS the parties intend that upon the closing of a Qualifying
Public Offering this Agreement shall supersede all prior agreements,
understandings, negotiations and discussions whether oral or written entered
into between the parties in respect of their shareholdings in the Corporation,
including without limitation the Shareholder Agreement dated July 16, 1997, as
amended by Agreements dated June 16, 1998, October 8, 1998 and October 23, 1998.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency whereof is
hereby acknowledged, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following terms shall have the meanings
set out below unless the context requires otherwise:
"1934 ACT" means the U.S. SECURITIES EXCHANGE ACT OF 1934, as amended, or
any successor federal statute and the rules and regulations thereunder
and as the same shall be in effect from time to time.
"ACT" means the BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B16.
"AGREEMENT" means this Agreement, including the Schedules to this
Agreement, as it or they may be amended or supplemented from time to time
and the expressions "HEREOF", "HEREIN", "HERETO", "HEREUNDER", "HEREBY"
and similar expressions refer to this Agreement and not to any particular
Section or other portion of this Agreement.
"ARTICLES" means the Articles of Incorporation of the Corporation, as
amended and restated effective upon the closing of the Qualifying Public
Offering, a copy of which are annexed hereto as Exhibit A, and as the
same may be amended from time to time thereafter.
"AMENDING AGREEMENT" has the meaning ascribed to such term in Section
4.2.
"BUSINESS DAY" means any day except Saturday, Sunday or any day on which
banks are generally not open for business in the place where the
registered office of the Corporation is located.
"CANADIAN PUBLIC OFFERING" has the meaning ascribed thereto in Section
3.1 (e).
"COMMON SHARES" means shares in the capital of the Corporation designated
as common shares in the Articles and shall for greater certainty, include
Common Shares issued to the Preference Shareholders on the conversion of
their Convertible Preference Shares as set out in Schedule 2.
"DEMAND HOLDER" has the meaning ascribed thereto in Section 3.2.
"DEMAND REGISTRATION" has the meaning ascribed thereto in Section 3.2.
"INCLUDING" means including without limitation and "INCLUDES" means
includes without limitation.
"OFFERING HOLDER" has the meaning ascribed thereto in Section 3.10.
"PARTY" means a party to this Agreement and any reference to a Party
includes its heirs, executors, administrators, successors and permitted
assigns; and "PARTIES" means every Party.
"PERSON" is to be broadly interpreted and includes an individual, a
corporation, a partnership, a trust, an unincorporated organization, the
government of a country or any political subdivision thereof, or any
agency or department of any such government, and the executor,
administrators or other legal representatives of an individual in such
capacity.
"REGISTRATION NOTICE" has the meaning ascribed to it in Section 3.2.
"RESTRICTED SHARES" has the meaning ascribed to it in Section 2.1.
"RULE 144" means Rule 144 promulgated by the U.S. Securities and Exchange
Commission under the Securities Act, or any successor federal rule as the
same shall be in effect from time to time.
"RULE 144A" means Rule 144A promulgated by the U.S. Securities and
Exchange Commission under the Securities Act, or any successor federal
rule as the same shall be in effect from time to time.
"SECURITIES ACT" means the U.S. SECURITIES ACT OF 1933, as amended, or
any successor federal U.S. statute, and the rules and regulations
thereunder, and as the same shall be in effect from time to time.
"SHAREHOLDER" means each holder of Common Shares listed in Schedule 1 and
the holders of Common Shares listed in Schedule 2 hereto following the
conversion of their Convertible Preference Shares and any Person who
acquires Restricted Shares in
accordance with the provisions of this Agreement and for as long as such
Person owns any issued shares of the Corporation; and "SHAREHOLDERS"
means collectively every Shareholder.
"SHAREHOLDER REQUEST" has the meaning ascribed thereto in Section 3.1.
"TRANSFER" of shares includes any sale, exchange, transfer, assignment,
gift, pledge, encumbrance, hypothecation, alineation, transmission or
other transaction, whether voluntary, involuntary or by operation of law,
by which the legal or beneficial ownership of, or a security interest or
other interest in Restricted Shares passes from one Person to another, or
to the same Person in a different capacity, whether or not for value.
"WARRANT" means a warrant to purchase a Common Share of the Corporation
pursuant to a Warrant Certificate (as hereinafter defined), and
"WARRANTS" refers collectively to all Warrants.
"WARRANT CERTIFICATES" refers to the Warrant Certificates issued to the
Warrant Holders to purchase in the aggregate 88,889 Common Shares in the
capital of the Corporation and "WARRANT CERTIFICATE" refers to any one of
the Warrant Certificates.
"WARRANT SHARES" means common shares issuable pursuant to the Warrants.
1.2 HEADINGS AND TABLE OF CONTENTS. The division of this Agreement into Articles
and Sections and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement.
1.3 NUMBER AND GENDER. Unless the context requires otherwise, words importing
the singular include the plural and VICE VERSA and wordings importing gender
include all genders.
1.4 BUSINESS DAYS. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.
1.5 STATUTE REFERENCES. Any reference in this Agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted or
replaced from time to time.
1.6 SECTIONS AND SCHEDULE REFERENCES. Unless the context requires otherwise,
references in this Agreement to Articles, Sections, Subsections or Schedules are
to Articles, Sections, Subsections or Schedules of this Agreement.
ARTICLE 2
SHARE TRANSFERS
2.1 RESTRICTED SHARES. Each certificate for Common Shares (including for Common
Shares issued to the Preference Shareholders on the conversion of their
Convertible Preference Shares to Common Shares) issued to the Shareholders shall
be stamped or imprinted with a legend substantially as follows:
Restrictions: The shares represented by this certificate have
not been registered under the SECURITIES ACT OF 1933, as
amended (the "Securities Act"), or any state securities or
blue sky laws, nor have the shares been qualified for
distribution to the public under the securities laws of any
Province of Canada. Such shares have been acquired for
investment and may not be sold, transferred, pledged, or
hypothecated in the absence of an effective registration
statement for such shares under the Securities Act and any
state securities or blue sky laws, or a qualification for
distribution to the public under the securities laws of any
Province of Canada unless in the written opinion of legal
counsel (which opinion is satisfactory in form and substance
to the Corporation acting reasonably) that such registration
or qualification is not required.
2.2 SECURITIES LAW RESTRICTIONS. No Shareholder shall Transfer any shares
containing the legend set out in Section 2.1 above, unless and until (i) the
Transfer is registered under the Securities Act and any applicable state
securities laws, or (ii) the Corporation shall have received a written opinion
of legal counsel to the Shareholder, which is satisfactory in form and substance
to the Corporation's legal counsel acting reasonably, that the Transfer is
exempt from the registration requirements of the Securities Act and applicable
state securities laws, and /or from the prospectus and registration requirements
of applicable securities laws of any relevant province of Canada.
ARTICLE 3
REGISTRATION RIGHTS
3.1 PIGGYBACK REGISTRATIONS. If at any time after the closing of a Qualifying
Public Offering, while any Shareholder holds a share certificate evidencing
Common Shares which bears the restrictive legend set forth in Section 2.1 above
(the "Restricted Shares"), the Corporation proposes to file a registration
statement under the Securities Act to register the sale of Common Shares on a
form other than Form S-4, F-4 or S-8 (or such other forms as the Securities and
Exchange Commission may promulgate hereafter for registration of the sale of
securities in transactions for which Forms S-4, F-4 or S-8 may be used as of the
date hereof) and, other than a registration statement to be filed pursuant to
Section 3.2 hereof, it will give written notice to each Shareholder and Warrant
Holder at least twenty (20) days prior to the date of the first filing of a
registration statement with the U.S. Securities and Exchange Commission. Each
Shareholder who is the holder of Restricted Shares at the time of receipt of
such notice and each Warrant Holder (subject to compliance with the provisions
of Subsection 3.1(e) may, within ten (10) days of receipt of such notice,
request in writing (the "Shareholder Request") that the Corporation include in
the registration statement to
be filed by the Corporation that number of Restricted Shares owned by such
Shareholder (the "Requesting Shareholder") and specified in the Shareholder
Request and the Corporation shall include in the registration statement all of
the Restricted Shares specified in the Shareholder Request subject to the
following:
(a) The Corporation will pay all expenses of such registration, except that
each Requesting Shareholder whose Common Shares are included in such
registration shall pay all underwriting discounts and commissions
applicable to its Common Shares and all accounting and legal fees and
expenses of its own accountant and legal counsel, if any; provided,
however, that if the expense of such registration is borne by a Person
other than the Corporation, the Corporation shall pay on behalf of the
Requesting Shareholder, whose Common Shares are included in such
registration, a PRO RATA share of the incremental expense of such Common
Shares being included in such registration.
(b) If such registration statement is for a prospective underwritten
offering, the Requesting Shareholder agrees to sell its Common Shares on
the same basis as the other Common Shares covered by such registration
statement are being sold. Each Requesting Shareholder whose shares are to
be registered pursuant to the registration statement shall be a party to
the applicable underwriting agreement and shall provide customary
representations, warranties, opinions and other agreements, and shall be
responsible for its PRO RATA share of any underwriting fees, commissions
or discounts payable to the underwriters.
(c) The Corporation may withdraw any such registration statement before it
becomes effective or postpone the offering of Common Shares contemplated
by such registration statement without any obligation to any Requesting
Shareholder.
(d) If such registration statement is for an underwritten offering and, in
the opinion of the managing underwriters or the Board of Directors of the
Corporation (as determined by a resolution thereof), the inclusion in the
registration statement of all or any part of the Restricted Shares
specified in all Shareholder Requests received by the Corporation
pursuant to this Section 3.1, would be detrimental to the proposed
offering of Common Stock, the Corporation may reduce or eliminate the
number of Restricted Shares to be included from all Requesting
Shareholders; and, unless the Requesting Shareholder and the Corporation
otherwise agree, in making such reduction, the Warrant Holders and the
Preference Shareholders (notwithstanding the conversion of their shares
to Common Shares coincident with the closing of the Qualifying Public
Offering) shall have priority over the Common Shareholders in including
their Restricted Shares in the offering and subject to a special
allocation to accomplish the foregoing preference in favour of the
Warrant Holders and Preference Shareholders , each Requesting Shareholder
shall have Restricted Shares owned by it included in the registration
statement in the same proportion that the number of its Restricted Shares
requested to be included at that time bears to the total holdings of
Restricted Shares that the Requesting Shareholders have requested be
included in the registration statement; provided, however, in no event
shall a Requesting Shareholder be entitled or required to include a
greater number of Restricted Shares in the
registration statement than are specified in the Shareholder Request.
(e) In requesting the inclusion of Restricted Shares in the registration
statement pursuant to Section 3.1, a Requesting Shareholder may include
Common Shares to be acquired on the exercise of Warrants, provided such
Warrants are then exercisable and the Warrant Holder shall have acquired
the Common Shares to be included pursuant to the exercise of the Warrants
in accordance with the terms thereof prior to the closing of the sale of
such Common Shares pursuant to the registration statement. .
(f) If, at any time while Restricted Shares are outstanding, the Corporation
proposes to file a prospectus or otherwise qualify any Common Shares for
offering to the public in any province in Canada (a "Canadian Public
Offering") then any Shareholder and Warrant Holder who would have
piggyback registration rights in accordance with the foregoing provisions
of this Section 3.1 if those provisions become operative shall be
afforded the opportunity to have its Common Shares qualified for
participation in the Canadian Public Offering on the terms and conditions
set out above.
3.2 DEMAND REGISTRATION. At any time after the expiration of one hundred and
eighty (180) days following the closing of the Qualifying Public Offering and
prior to the expiration or termination of this Agreement, holders of a majority
of the then outstanding Restricted Shares and of the Warrant Shares taken
together (the "Demand Holders") may make a written request to the Corporation
(the "Demand") for registration under the Securities Act of all or part of the
Restricted Shares held by the Demand Holders issuing the Demand, and which
request shall specify the number of Restricted Shares (including Warrant Shares
issuable on the exercise of Warrants that are then exercisable) and the intended
method of distribution thereof and as soon as practicable thereafter, the
Corporation will cause a registration on Form S-1 or F-1 (on form X-0, X-0, xx
X-0 or F-3 if any of such forms can be used) under the Securities Act , or any
comparable form then in force, as selected by the Corporation in its discretion
from time to time, to be filed covering the Restricted Shares specified in the
Demand (the "Demand Registration") and shall use its best efforts to cause the
registration statement to become effective, subject to the following:
(a) Within ten (10) days after receipt of the Demand, the Corporation shall
give written notice (the "Registration Notice") of the Demand to all
other Demand Holders who did not join in the Demand. Subject to the
applicable provisions of Section 3.1 (to the extent the same are not
inconsistent with the provisions of this Section 3.2)) and this Section
3.2, the Corporation will include in the Demand Registration all
Restricted Shares of such other Demand Holders and with respect to which
the Corporation has received written request for inclusion therein within
ten (10) days after the receipt by such other Demand Holders of the
Registration Notice. All requests made pursuant to this Section 3.2(a)
will specify the aggregate number of Restricted Shares to be registered
and also will specify the intended methods of disposition thereof. In
requesting the inclusion of Restricted Shares in the registration
statement pursuant to this Section 3.2(a), the Warrant Holders may
specify Common Shares which could then be acquired by each Warrant Holder
pursuant to the exercise of the Warrant provided that such Warrant Holder
shall have acquired
Common Shares pursuant to the exercise of the Warrant in accordance with
the terms thereof prior to the closing of the offering of such shares
pursuant to the Demand Registration..
(b) Except as provided in Section 3.2(d) the Demand Holders shall not be
entitled to more than two Demand Registrations pursuant to this Section
3.2 provided that no Demand Registration shall be counted toward this
total unless and until declared effective by the Securities and Exchange
Commission. The Demand Holders issuing the Demand may withdraw their
request for a Demand Registration before it becomes effective provided
that they reimburse the Corporation for out-of-pocket expenses incurred
in connection with the Demand Registration and in such event the same
shall not be counted as a Demand Registration pursuant to this Section
3.2.
(c) If any request for a Demand Registration is for an underwritten public
offering, such public offering shall be lead managed by an underwriter or
underwriters of recognized national stature in the United States of
America, selected by the Corporation.
(d) If the managing underwriter or underwriters of any Demand Registration
advises the Corporation in writing that in its or their opinion the
number of securities proposed to be sold in such Demand Registration
exceeds the number which can be sold in such offering, the Corporation
will include in such registration only the number of Restricted Shares,
if any, which in the opinion of such underwriter or underwriters, should
be so included, and the Warrant Holders and the Preference Shareholders
(notwithstanding the conversion of their shares to common shares
coincident with the closing of the Qualifying Public Offering) shall have
priority over the Common Shareholders in including their shares in the
offering and subject to a special allocation to accomplish the foregoing
preference in favour of the Warrant Holders and Preference Shareholders,
Restricted Shares of the Demand Holders shall be excluded PRO RATA among
all Demand Holders that have requested Common Shares to be included in
such Demand Registration in the same proportion that their total holdings
of Restricted Shares eligible for inclusion in the registration statement
at that time bears to the total holdings of Restricted Shares eligible
for inclusion in the registration statement of all Demand Holders
requesting inclusion; provided, however that (i) if one third (1/3) or
more of all Restricted Shares eligible for inclusion in the registration
statement of the Restricted Shares requested for inclusion in any Demand
Registration are not included in such Demand Registration, then
notwithstanding the terms and provision of Section 3.2(b) a majority of
the Demand Holders shall be entitled to an additional Demand Registration
hereunder (on the same terms and conditions as would have applied to the
Demand Holders had such initial Demand Registration not be made).
(e) The Corporation will pay all expenses of any Demand Registration, except
that each Demand Holder whose Restricted Shares are included in such
registration shall pay all underwriting discounts and commissions
applicable to its Common Shares and all accounting and legal fees and
expenses of its own accountant and counsel, if any. If the Demand
Registration is for an underwritten offering, each Demand Holder
including
Restricted Shares in such Demand Registration, shall be a party to the
applicable underwriting agreement and shall provide customary
representations, warranties, opinions and other agreements, and shall be
responsible for its PRO RATA share of any underwriting fees, commissions
or discounts payable to the underwriters.
(f) Notwithstanding the foregoing, the Corporation may decline to effect a
Demand Registration pursuant to this Section 3.2 during the period
starting with the date sixty (60) days prior to the Corporation's
estimated date of filing of, and ending on a date one hundred and twenty
(120) days following the effective date of, a registration statement
pertaining to an underwritten public offering of Common Shares for the
account of the Corporation, provided that the Corporation's estimate of
the date of filing such registration statement is made in good faith. If
the Corporation (i) shall furnish to the Shareholders requesting
inclusion in such Demand Registration a certificate signed by the
President or Chief Executive Officer of the Corporation stating that the
Board of Directors of the Corporation has in good faith adopted a
resolution stating that it would be detrimental to the Corporation or its
shareholders for a registration statement to be filed in the near future;
or (ii) desires to postpone filing a registration statement in order to
be able to include in such filing audited year-end financial statements
prepared in the ordinary course of preparing its annual report to its
shareholders (including on Form 10-K or such other applicable form); or
(iii) gives notice to the Demand Holders, within thirty (30) days of the
receipt of the Demand, that it is engaged or has plans to engage in an
firm underwritten registered public offering of its securities within
thirty (30) days of the notice date, then the Corporation may delay a
requested Demand Registration for not more than one hundred and twenty
(120) days from the date of the Demand, provided that such delay may be
invoked on not more than three (3) occasions in total and on not more
than one (1) occasion within any twelve (12) month period; and, provided
further that such delay may not be invoked within one hundred and eighty
(180) days of the Corporation having declined to effect a Demand
Registration pursuant to the circumstances set forth in the first
sentence of this Subsection 3.2(f).
3.3 EXPIRATION. This Agreement and all of the rights and obligations of the
Shareholders, Warrant Holders and of the Corporation pursuant to this Article 3
shall automatically expire on the date when 2/3 of the Restricted Shares owned
by all of the Shareholders on the date hereof have been sold in registered
transactions or may be immediately sold pursuant to Rule 144 (taking into
account the volume limitations thereunder).
3.4 AMENDMENTS. In connection with any registration statement filed pursuant to
this Article 3, the Corporation shall file any post-effective amendment or
amendments to the registration statement which may be required under the
Securities Act during the period reasonably required to effect the distribution
contemplated thereby; provided, however, that the Corporation shall not be
required to file any post-effective amendment to any registration statement
described in this Article 3 more than one hundred and twenty (120) days after
the effective date of the registration statement.
3.5 NOTIFICATION OF CERTAIN EVENTS. During the period for which the Corporation
is required to file
and keep effective a registration statement pursuant to this Agreement, the
Corporation shall furnish each Shareholder who included his Restricted Shares in
the registration statement with the number of copies of the registration
statement (including exhibits) and prospectuses contained therein that are
reasonably requested for the purposes contemplated by the Securities Act. The
Corporation shall notify each Shareholder selling Restricted Shares covered by
such registration statement during the period such registration statement is
required to remain effective, or 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 registration statement or the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of circumstances then existing. Each Shareholder who has included
Restricted Shares in the registration statement agrees, upon receipt of such
notice, forthwith to cease making offers and sales of such securities pursuant
to such registration statement or deliveries of the prospectus contained therein
for any purpose and to return to the Corporation the copies of such prospectus
not theretofore delivered by such Shareholder. Subject to Section 3.5 at the
request of such Shareholder, the Corporation shall prepare and furnish to such
Shareholder a reasonable number of copies of any supplement to or amendment of
such prospectus that may be necessary so that, as thereafter delivered to the
purchaser of such shares, such prospectus shall not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
circumstances then existing. The Corporation shall promptly notify all
Shareholders who has included Restricted Shares in the registration statement of
any stop order, injunction or similar proceeding initiated by state or federal
regulatory bodies and, subject to Section 3.5, use its reasonable efforts to
take all necessary steps expeditiously to remove such stop order or similar
proceeding. The Corporation shall be permitted to suspend the effectiveness of a
registration statement during such time as any such stop order, injunction or
other similar proceeding is in effect.
3.6 PROVISION OF INFORMATION. As a condition to the Corporation's obligation
under Article 3 to cause the registration statement or an amendment to be filed
or Restricted Shares to be included in the registration statement, the holders
of any Restricted Shares that are to be included in such registration statement
shall provide such information and execute such documents and certificates
(including any agreement or undertaking relating to expenses, indemnification or
other matters contemplated by this Agreement) as may reasonably be required by
the Corporation in connection with such registration.
3.7 REPORTS. After the first registration statement under the Securities Act for
any securities of the Corporation shall have become effective, the Corporation
will use its best efforts to file by the required filing date (as such date may
be extended) all reports required to be filed by it pursuant to the 1934 Act
and, upon the request of any Shareholder, to furnish such Shareholder such
information as may be necessary to enable it to effect sales of its securities
pursuant to Rule 144 or Rule 144A.
3.8 NEW CERTIFICATES. As expeditiously as possible after the effectiveness of
any registration statement provided for in this Article 3, the Corporation shall
deliver, in exchange for any
certificate evidencing Restricted Shares the sale of which has been registered,
new share certificates not bearing the legend set forth in Section 2.2 of this
Agreement. In the event that any of such Common Shares remain unsold when such
registration statement ceases to be effective, the share certificates not
bearing such legends evidencing such unsold Common Shares shall be delivered to
the Corporation in exchange for share certificates bearing such legends.
3.9 STATE SECURITIES LAWS. In connection with the offering of any Common Shares
the sale of which is registered pursuant to this Article 3, the Corporation
shall use reasonable efforts to qualify or register the Common Shares to be sold
under the securities or "Blue Sky" laws of such jurisdictions within the United
States as may be reasonably requested by the holder of any Common Shares so
registered; provided, however, that the Corporation shall not be obligated to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction in which it is not then qualified or to file any general consent to
service of process. The expense of such qualification or registration shall be
borne by the Corporation.
3.10 INDEMNIFICATION. In connection with any registration of the sale of Common
Shares pursuant to this Article 3, to the extent permitted by law, the
Corporation shall indemnify the Offering Holders of Common Shares and the
Offering Holders of Common Shares shall indemnify the Corporation in the manner
provided in this Section 3.10.
(a) The Corporation shall indemnify and hold harmless each holder of
Restricted Shares included in the registration statement pursuant to the
provisions of this Article 3 (the "Offering Holder") and each officer,
each director and each partner (and each officer or director of such
partner), if any, of the Offering Holder, each underwriter, if any, for
the sale or distribution of such Offering Holder's Common Shares, and
each Person, if any, who controls such Offering Holder or underwriter
within the meaning of the Securities Act, against all losses, claims,
damages or liabilities, joint or several, to which such Offering Holder,
officer, director, partner, partner's officer or director, underwriter or
controlling Person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any registration statement, prospectus or any amendment or supplement
thereto filed by the Corporation in which an Offering Holder's Restricted
Shares are included pursuant to the provisions of this Article 3, or
arise out of or are based upon the omission or alleged omission to state
therein a materiel fact required to be stated therein or necessary to
make the statement therein, in the light of the circumstances under which
they were made, not misleading and, subject to Section 3.10(c) of this
Agreement, the Corporation shall reimburse each Offering Holder, officer,
director, partner, partner's officer or director, underwriter or
controlling Person thereof for any legal or other expenses reasonably
incurred by such Offering Holder, officer, director, partner, partner's
officer or director, underwriter or controlling Person thereof in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Corporation shall not be
required to indemnify and hold harmless or reimburse an Offering Holder,
officer, director, partner, partner's officer or director, underwriter or
controlling Person thereof, as the case may be, to the extent that any
such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission in any document made in
reliance upon and in conformity with written information furnished to the
Corporation by or on behalf of an Offering Holder, officer, director,
partner, partner's officer or director, underwriter or controlling Person
thereof for use in the preparation of such documents.
(b) Each Offering Holder shall severally and not jointly indemnify and hold
harmless the Corporation, each of its directors and officers, each other
Offering Holder, and each underwriter, if any, for the sale or
distribution of such Offering Holder's shares, and each Person, if any,
who controls the Corporation, such other Offering Holder(s) or such
underwriter within the meaning the Securities Act, against all losses,
claims, damages or liabilities to which the Corporation or any such
director, officer, other Offering Holder, underwriter or controlling
Person may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in any registration statement,
prospectus or any amendment or supplement thereto filed by the
Corporation in which an Offering Holder's Restricted Shares are included
pursuant to the provisions of this Article 3, or arise out of or are
based upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of
circumstances under which they were made, not misleading, in each case,
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Corporation by and on behalf of such Offering Holder for use in the
preparation thereof; and, subject to Section 3.10(c), such Offering
Holder shall reimburse the Corporation or any such director, officer,
underwriter, other Offering Holder(s) or controlling Person thereof for
any legal or other expenses reasonably incurred by the Corporation or any
such director, officer, other Offering Holder(s), underwriter or
controlling Person thereof in connection with investigating or defending
against any such loss, claim, damage, liability or action; provided,
however, that the maximum amount of liability in respect of such
indemnification shall be limited, in the case of any such Offering
Holder, to an amount equal to the net proceeds actually received by such
Offering Holder from the sale of Common Shares effected pursuant to such
registration.
(c) Promptly after receipt by an indemnified party under Section 3.10(a) or
Section 3.10(b) of notice of the commencement of any action, the
indemnified party shall notify the indemnifying party. The failure to so
notify the indemnifying party shall relieve the indemnifying party from
any liability hereunder with respect to the action to the extent such
failure prevents the indemnifying party from contesting such action;
provided, however, that any such failure shall not relieve the
indemnifying party from any other liability which it may have to any
other party. In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to assume and control the
defence of the action at its expense and if the indemnifying party gives
notice to such indemnified party of its election to assume and control
the defense, the indemnifying party will not be liable to such
indemnified party
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense or investigation of the action.
3.11 STANDBY.
(a) Each of the Shareholders, Warrant Holders and the Corporation agree that,
with respect to any registration statement under the Securities Act that
the Corporation may file (other than on Forms S-8 or F-8 ), neither such
Shareholder, Warrant Holder nor the Corporation will sell any securities
of the Corporation (whether or not such securities are Restricted Shares,
and however acquired) other than securities, if any, of such Shareholder,
Warrant Holder or the Corporation included in such registration statement
for a period of at least five (5) days before, and until one hundred and
twenty (120) days after, the date such registration statement is declared
effective, provided that such Shareholder or Warrant Holder shall be so
limited only if notice of the effective date of such registration
statement has been given to such Shareholder or Warrant Holder.
(b) The Corporation agrees that any registration rights that it may grant
with respect to its securities subsequent to the date of this Agreement
will provide that upon receipt of a request from a holder or holders of
Restricted Shares pursuant to this Article 3 of this Agreement, the
Corporation shall not be obligated to file a registration statement under
the Securities Act at the request of any holder or holders of
subsequently issued securities of the Corporation until at least one
hundred and twenty (120) days after the date on which the registration
statement filed pursuant to this Article 3 of this Agreement becomes
effective.
3.12 MERGERS, ETC. The Corporation agrees that, as a condition to any merger,
amalgamation, consolidation or other business combination or the sale of all or
substantially all of its assets in exchange for securities of another company,
it will require the surviving, consolidated or purchasing company to enter into
an agreement to register the sale of the securities of such surviving,
continuing, consolidated or purchasing company to be received by the
Shareholders and Warrant Holders on substantially the same terms and provisions
as are provided in this Agreement.
3.13 ASSIGNMENT. The registration rights contained in this Agreement shall be
transferable by a Shareholder or transferee of a Shareholder to any Person who
acquires Restricted Shares from such Shareholder or transferee in compliance
with the terms and conditions of this Agreement (including any pledgee but
excluding any Person who acquires such shares in a transaction with respect to
which a registration statement under the Securities Act is effective at the time
or in a sale complying with Rule 144).
3.14 LIMITATION OF REGISTRATION RIGHTS. Nothing contained in this Agreement
shall create any obligation on behalf of the Corporation to register under the
Securities Act any securities that are not Common Shares.
ARTICLE 4
GENERAL
4.1 ENTIRE AGREEMENT. This Agreement, together with any Schedules attached to
this Agreement and any agreements and documents to be delivered pursuant to the
terms of this Agreement, constitutes the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written with respect to the subject matter hereof including without limitation
the Shareholder Agreement dated July 16, 1997, as amended by Agreements dated
June 16, 1998, October 8, 1998, and October 23, 1998. There are no conditions,
representations, warranties or other agreements between the Parties in
connection with the subject matter of this Agreement, whether oral or written,
express or implied, statutory or otherwise, except as specifically set out in
this Agreement.
4.2 AMENDMENT. No amendment of this Agreement will be effective unless made in
writing and signed by the parties (the "Amending Agreement"). This Agreement may
and shall be amended if a majority of the holders of the Common Shares approve
such an amendment, in which case such amendment shall be deemed to be agreed to
by the Warrant Holders and the Corporation and the Warrant Holders and the
Corporation shall execute the Amending Agreement.
4.3 WAIVER. A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the Party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a Party in respect of any default, breach, non-observance
or by anything done or omitted to be done by another Party. The waiver by a
Party of any default, breach or non-compliance under this Agreement shall not
operate as a waiver of that Party's rights under this Agreement in respect of
any continuing or subsequent default, breach or non-compliance (whether of the
same or any other nature).
4.4 GOVERNING LAW. This Agreement shall be construed in accordance with the laws
of the State of New York.
4.5 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
4.6 FURTHER ASSURANCES. Each Party shall promptly do, execute, deliver or cause
to be done, executed and delivered all further acts, documents and things in
connection with this Agreement that another Party may reasonably require for the
purposes of giving effect to this Agreement.
4.7 NOTICES.
(a) Any notice or other communication required or permitted to be given by
this Agreement shall be in writing and shall be effectively given and
made if (i) delivered personally; or (ii)
sent by prepaid courier service; or (iii) sent by registered mail; or
(iv) sent prepaid by fax or other similar means of electronic
communication, in each case to the applicable address set out below:
(i) if to the Common Shareholders or to the Preference Shareholders,
to the addresses and facsimile numbers set out in Schedules 1 and
2, respectively;
(ii) if to the Warrant Holders, to the respective addresses and
facsimile numbers set out in Schedule 3; and
(iii) if to the Corporation, to:
Capital Environmental Resource Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX X0X 0X0
Xxxxxx
Attention: General Counsel
Facsimile: (000) 000-0000
(b) Any notice or other communication so given shall be deemed to have been
given and received on the day of delivery if delivered, or on the day of
faxing or sending by other means of recorded electronic communication,
provided that such day is a Business Day and such notice or other
communication is so delivered, faxed or sent prior to 4:30 p.m. on such
day. Otherwise, such notice or other communication shall be deemed to
have been given and received on the next following Business Day. Any
notice or other communication sent by registered mail shall be deemed to
have been given and received on the fifth (5th) Business Day following
the mailing thereof; provided, however, that no such notice or other
communication shall be mailed during any actual or apprehended disruption
of postal services. Any such notice or other communication given in any
other manner shall be deemed to have been given and received only upon
actual receipt.
(c) Any Party may from time to time change its address under this Section 4.7
by notice to the Corporation given in the manner provided by this
Section.
4.8 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and be
binding on, the Parties and their respective heirs, executors, administrators,
successors and permitted assigns. Except as otherwise provided herein, no Party
hereto may assign or transfer, whether absolutely, by way of security or
otherwise, all or any part of its rights or obligations under this Agreement
without the prior written consent of the Corporation.
4.9 SUBDIVISION, CONSOLIDATION, ETC., OF SHARES. The provisions of this
Agreement relating to Common Shares shall apply MUTATIS MUTANDIS to any
securities into which the Common Shares or any of them may be converted or
changed, to any securities of the Corporation resulting from a reclassification,
subdivision or consolidation of any Common Shares, to any securities of the
Corporation which are received by the Shareholders as a dividend in kind, and to
any securities
of the Corporation or of any successor body corporate which may be received by
the Shareholders or the Warrant Holders on an amalgamation, reorganization,
merger or combination of the Corporation.
4.10 TERMINATION OF AGREEMENT. This Agreement shall come into force and be
effective as of and from the date of this Agreement appearing on the first page
hereof and will continue in full force until the earlier of the date upon which
this Agreement expires pursuant to Section 3.3 hereof, or is terminated by the
written agreement of the Shareholders and the Warrant Holders and the
Corporation, or the Corporation is dissolved pursuant to the Act (provided that
if the Corporation is dissolved and is subsequently revived pursuant to the Act,
the dissolution shall be deemed not to have occurred for the purposes of this
Section).
4.11 COUNTERPARTS. This Agreement may be executed by the Parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
IN WITNESS WHEREOF this Agreement has been duly executed on the date first noted
above.
CAPITAL ENVIRONMENTAL
RESOURCE INC. BRANARD INVESTMENT CORP.
By: C.S. By: C.S.
------------------------------ ----------------------------
Name: Name:
Title: Title:
ENVIRONMENTAL OPPORTUNITIES ENVIRONMENTAL OPPORTUNITIES
FUND, L.P. FUND (CAYMAN), L.P.
BY: ENVIRONMENTAL OPPORTUNITIES BY: ENVIRONMENTAL OPPORTUNITIES
MANAGEMENT CO., LLC MANAGEMENT CO., LLC
ITS GENERAL PARTNER ITS GENERAL PARTNER
Per: /s/ Xxxxx X. XxXxxxx Per: /s/ Xxxxx X. XxXxxxx
---------------------------- -----------------------------
Name: Xxxxx X. XxXxxxx Name: Xxxxx X. XxXxxxx
Title: Manager Title: Manager
ENVIRONMENTAL OPPORTUNITIES ENVIRONMENTAL OPPORTUNITIES
FUND II, L.P. FUND II (INSTITUTIONAL), L.P.
BY: FUND II MGT. CO., LLC BY: FUND II MGT. CO., LLC
ITS GENERAL PARTNER ITS GENERAL PARTNER
Per: /s/ Xxxxx X. XxXxxxx Per: /s/ Xxxxx X. XxXxxxx
---------------------------- -----------------------------
Name: Xxxxx X. XxXxxxx Name: Xxxxx X. XxXxxxx
Title: Manager Title: Manager
CERI INVESTORS, X.X. XXXXX CAPITAL CORPORATION
Per: Per:
----------------------------- ------------------------------
Name: Name:
Title Title:
XXXXXXX XXXXXX XXXXX INC.
Per:
-----------------------------
Name:
Title:
/s/ XXXXXX XXXX /s/ XXXXXXX X. XXXXXXXX
----------------------------- -----------------------------
XXXXXX XXXX XXXXXXX X. XXXXXXXX
/s/ XXXXXX XXXX /s/ XXXXXXX X. XXXXX
----------------------------- -----------------------------
XXXXXX XXXX XXXXXXX X. XXXXX
/s/ XXXXXX X. XXXXX /s/ XXXXX XXXXXXX XXXXXX
----------------------------- -----------------------------
XXXXXX X. XXXXX XXXXX XXXXXXX XXXXXX
/s/ R. XXXXX XXXXXX /s/ XXXX X. AND XXXX X. XXXXXXX
----------------------------- -----------------------------
R. XXXXX XXXXXX XXXX X. AND XXXX X. XXXXXXX
/s/ XXXXXXX X. XXXXXXXXX /s/ XXXXX XXXXXXX
----------------------------- -----------------------------
XXXXXXX X. XXXXXXXXX XXXXX XXXXXXX
/s/ XXXXXX X. XXXXXXXXX, XX. /s/ XXX X. XXXXXX
----------------------------- -----------------------------
XXXXXX X. XXXXXXXXX, XX. XXX X. XXXXXX
/s/ XXXX X. XXXXX /s/ XXXX X. X'XXXXX
----------------------------- -----------------------------
XXXX X. XXXXX XXXX X. X'XXXXX
/s/ XXXXXXX X. XXXXXX, III /s/ XXXXXXX XXXXX
----------------------------- -----------------------------
XXXXXXX X. XXXXXX, III XXXXXXX XXXXX
/s/ XXX X. AND XXXXXX X. XXXX /s/ XXXXX XXXX
----------------------------- -----------------------------
XXX X. AND XXXXXX X. XXXX XXXXX XXXX
/s/ XXXXXXXXX X. XXXXXXX /s/ XXXXXXXXX X. XXXXXXX
----------------------------- -----------------------------
XXXXXXXXX X. XXXXXXX XXXXXXXXX X. XXXXXXX
/s/ XXXXX X. XXXXXXX /s/ XXXX X. XXXXXXX
----------------------------- -----------------------------
XXXXX X. XXXXXXX XXXX X. XXXXXXX
/s/ XXXX X. XXXXXXX /s/ XXX X. XXXXXXX
----------------------------- -----------------------------
XXXX X. XXXXXXX XXX X. XXXXXXX
/s/ XXXXXXX X. XXXXX /s/ XXXXX XXXXXXXX
----------------------------- -----------------------------
XXXXXXX X. XXXXX XXXXX XXXXXXXX
