EXHIBIT 2.1
THIRD AMENDMENT TO RIGHTS AGREEMENT
THIRD AMENDMENT TO RIGHTS AGREEMENT, dated as of March 27, 2003
("Amendment"), to the rights agreement, dated as of September 2, 1999, as
amended on July 27, 2001 and January 25, 2002 (the "Rights Agreement"), between
Capital Environmental Resource Inc. (the "Company") and American Stock Transfer
& Trust Company (the "Rights Agent"). Any capitalized terms not otherwise
defined herein shall have the meaning ascribed to such term in the Rights
Agreement.
WHEREAS, the Board of Directors of the Company believes it to be in the
best interest of the Company and its shareholders to enter into a Series 1
Preferred Subscription Agreement (the "Third Subscription Agreement"), by and
among the Company and certain investors and dated March 27, 2003, which
agreement provides for, among other things, the subscriptions by such investors
for shares of the Company's Series 1 Preferred Shares (the "Series 1 Preferred
Shares"), and warrants (the "Warrants") to purchase Company common shares (the
"Common Shares").
WHEREAS, as a result of the foregoing, the Company desires that the
transactions contemplated by the Third Subscription Agreement, and the investors
listed therein be exempt from the provisions of the Rights Agreement;
WHEREAS, the Company and the Rights Agent have heretofore
executed and entered into the Rights Agreement;
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company may
supplement or amend any provision of the Rights Agreement in accordance with the
provisions of Section 27 thereof;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereby agree as follows:
Section 1. AMENDMENTS TO SECTION 1 OF THE RIGHTS AGREEMENT.
(a) The definition of "Acquiring Person" in Section 1 of the Rights
Agreement is hereby amended by deleting the last sentence thereof and adding the
following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, no Investor,
Permitted Assignee, or Substitute Investor (as such terms are defined in the
Subscription Agreement dated July 27, 2001 by and among the Company and the
persons listed in Schedule A thereto (the "Subscription Agreement"), the
Subscription Agreement dated February 5, 2002 by and among the Company and the
persons listed in Schedule A thereto (the "Second Subscription Agreement") or
the Series 1 Preferred Subscription Agreement, dated March 27, 2003 by and among
the Company and the persons listed in
Schedule A thereto (the "Third Subscription Agreement")), nor any of their
Affiliates or Associates, shall become an Acquiring Person, either individually
or collectively, by virtue of (A) the announcement of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, (B) the issuance and acquisition of Common
Shares pursuant to the Subscription Agreement, (C) the issuance and acquisition
of shares of the Company's Series 1 Preferred Shares (the "Series 1 Preferred
Shares") pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the execution
and delivery of the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, or (G) the consummation of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement."
(b) The definition of "Distribution Date" in Section 1 of the Rights
Agreement is hereby amended by deleting the last sentence thereof and adding the
following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, neither (A)
the announcement of the transactions contemplated by the Subscription Agreement,
the Second Subscription Agreement or the Third Subscription Agreement, (B) the
issuance and acquisition of Common Shares pursuant to the Subscription
Agreement, (C) the issuance and acquisition of Series 1 Preferred Shares
pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the execution
and delivery of the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, nor (G) the consummation of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, shall be deemed to cause a Distribution Date."
(c) The definition of "Permitted Offer" in Section 1 of the Rights
Agreement is hereby amended and restated in its entirety and replaced with the
following:
"`Permitted Offer' shall mean (i) a tender offer or an exchange offer for
all outstanding Common Shares, (ii) an issuance of Common Shares or other equity
securities of the Company in connection with a merger, consolidation or
acquisition, in both cases at a price and on terms determined by at least a
majority of the members of the Board of Directors, and concurred in by a
majority of those members who are not officers or employees of the Company and
who are not, and are not representatives, Affiliates or Associates of, an
Acquiring Person or the person making the offer in the case of (i) or the entity
the Company is seeking to merge or consolidate with or acquire, as the case may
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be, in the case of (ii), after receiving advice, in the case of either (i) or
(ii), from one or more investment banking firms, to be (a) at a price and on
terms that are fair to shareholders (taking into account all factors that such
members of the Board deem relevant including, without limitation, prices that
could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its shareholders or (iii) the offer, issuance or
acquisition of (a) Common Shares pursuant to the terms and conditions of the
Subscription Agreement, (b) Series 1 Preferred Shares pursuant to the terms and
conditions of the Second Subscription Agreement or the Third Subscription
Agreement, (c) Common Shares upon conversion of Series 1 Preferred Shares issued
or acquired pursuant to the terms and conditions of the Second Subscription
Agreement or the Third Subscription Agreement or (d) Common Shares pursuant to
the exercise of the Warrants."
(d) The definition of "Share Acquisition Date" in Section 1 of the Rights
Agreement is hereby amended by deleting the last sentence thereof and adding the
following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, neither (A)
the announcement of the transactions contemplated by the Subscription Agreement,
the Second Subscription Agreement or the Third Subscription Agreement, (B) the
issuance and acquisition of Common Shares pursuant to the Subscription
Agreement, (C) the issuance and acquisition of Series 1 Preferred Shares
pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the execution
and delivery of the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, nor (G) the consummation of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, shall be deemed to cause a Share Acquisition
Date."
(e) The definition of "Triggering Event" in Section 1 of the Rights
Agreement is hereby amended by deleting the last sentence thereof and adding the
following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, neither (A)
the announcement of the transactions contemplated by the Subscription Agreement,
the Second Subscription Agreement or the Third Subscription Agreement, (B) the
issuance and acquisition of Common Shares pursuant to the Subscription
Agreement, (C) the issuance and acquisition of Series 1 Preferred Shares
pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the
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execution and delivery of the Subscription Agreement, the Second Subscription
Agreement or the Third Subscription Agreement, nor (G) the consummation of the
transactions contemplated by the Subscription Agreement, the Second Subscription
Agreement or the Third Subscription Agreement, shall constitute a Triggering
Event."
Section 2. AMENDMENT TO SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT. Section
11(a)(ii) of the Rights Agreement is hereby amended by deleting the last
sentence thereof and adding the following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, neither (A)
the announcement of the transactions contemplated by the Subscription Agreement,
the Second Subscription Agreement or the Third Subscription Agreement, (B) the
issuance and acquisition of Common Shares pursuant to the Subscription
Agreement, (C) the issuance and acquisition of Series 1 Preferred Shares
pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the execution
and delivery of the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, nor (G) the consummation of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, shall constitute a Flip-In Event."
Section 3. AMENDMENT TO SECTION 13(a) OF THE RIGHTS AGREEMENT. Section
13(a) of the Rights Agreement is hereby amended by deleting the last sentence
thereof and adding the following sentence in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, neither (A)
the announcement of the transactions contemplated by the Subscription Agreement,
the Second Subscription Agreement or the Third Subscription Agreement, (B) the
issuance and acquisition of Common Shares pursuant to the Subscription
Agreement, (C) the issuance and acquisition of Series 1 Preferred Shares
pursuant to the Second Subscription Agreement or the Third Subscription
Agreement, (D) the issuance and acquisition of Common Shares upon conversion of
the Series 1 Preferred Shares issued and acquired pursuant to the Second
Subscription Agreement or the Third Subscription Agreement, (E) the issuance and
acquisition of Common Shares upon exercise of the Warrants, (F) the execution
and delivery of the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, nor (G) the consummation of the transactions
contemplated by the Subscription Agreement, the Second Subscription Agreement or
the Third Subscription Agreement, shall constitute a Flip-Over Event."
Section 4. AMENDMENT TO SECTION 15 OF THE RIGHTS Agreement. Section 15 of
the Rights Agreement is hereby amended by deleting the last sentence thereof and
adding the following sentence in lieu thereof:
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"Nothing in this Agreement shall be construed to give any holder of Rights
or any other Person any legal or equitable rights, remedy or claim under this
Agreement in connection with any transactions contemplated by the Subscription
Agreement, the Second Subscription Agreement or the Third Subscription
Agreement."
Section 5. DEFINITION. The term "Agreement", as used in
the Rights Agreement, shall be deemed to refer to the Rights
Agreement, as amended hereby.
Section 6. FULL FORCE AND EFFECT. Except as expressly amended hereby, the
Rights Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof.
Section 7. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts to be made and performed entirely within such State.
Section 8. COUNTERPARTS. This Amendment may be executed in
two counterparts, each of which shall be deemed an original, but
both of which together shall constitute one and the same
instrument.
Section 9. SEVERABILITY. If any term, provision, covenant or restriction
of this Amendment is held by a court of competent jurisdiction or other
authority to be invalid, illegal, or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Amendment, and of the Rights
Agreement, shall remain in full force and effect and shall in no way be
effected.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed as of the day and year first above written.
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx III
Title: Executive Vice-President (General Counsel)
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
