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EXHIBIT 10
SHAREHOLDERS AGREEMENT
This Shareholders Agreement dated as of March 31, 1998 between
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries, Inc., a corporation formed under the laws of the
State of Delaware, U.S.A. ("Blue") and Suez Lyonnaise des Eaux S.A., a societe
anonyme formed under the laws of France ("Lion"), relating to SITA S.A., a
societe anonyme formed under the laws of France ("Solid").
WHEREAS, Blue, BFI International, Inc. ("Blue International"),
Lion and Solid are parties to a Transaction Agreement dated February 16, 1998
(the "Transaction Agreement") providing, inter alia, (i) for the sale and
exchange on the Share Closing Date (as defined therein) of certain stock held
directly and indirectly by Blue, as set forth in the Transaction Agreement, for
the consideration specified therein, and (ii) the undertaking by Solid of a
capital increase through an equity offering (the "Equity Offering") to its
existing shareholders on the terms specified in the Transaction Agreement;
WHEREAS, the parties anticipate that following the
consummation of the transactions contemplated in the Transaction Agreement,
including the Equity Offering, Lion will own 51.5% of the outstanding capital
stock of Solid and Blue will own 19.2% of the outstanding capital stock of
Solid; and
WHEREAS, Blue and Lion have agreed that they will participate
in the ownership of Solid, attend to its management and have such other
relationships with each other and with respect to Solid in accordance with, and
in the manner, contemplated hereby.
NOW, THEREFORE, in consideration of the promises and the
mutual covenants herein contained, Blue and Lion agree as follows:
1. DEFINITIONS. For purposes of this Shareholders Agreement:
(a) "Affiliate" means with respect to any Person, each other
Person that directly or indirectly (through one or more intermediaries or
otherwise) controls, is controlled by or is under common control with such
Person.
(b) "Arbitration Rules" shall have the meaning specified in
Section 4(b).
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(c) "Blue" shall have the meaning specified in the preamble of
this Shareholders Agreement.
(d) "Blue Nominees" shall have the meaning specified in
Section 2(a).
(e) "Board" means the conseil d'administration of Solid.
(f) "Change in Control" shall have the meaning specified in
Section 3(e).
(g) "Consultation Period" shall have the meaning specified in
Section 2(c).
(h) "Discussion Matter" shall have the meaning specified in
Section 2 (d).
(i) "Equity Offering" shall have the meaning specified in the
preamble of this Shareholders Agreement.
(j) "Lion" shall have the meaning specified in the preamble of
this Shareholders Agreement.
(k) "Lock-Up Period" shall have the meaning specified in
Section 3(b).
(l) "Market Value" per Solid Share for purposes of this
Shareholders Agreement means the average of the closing price for the shares of
Solid on the 20 trading days on the Bourse de Paris ending on the trading day
immediately preceding the date on which such Market Value is being determined,
provided, however, if less than 20% of the outstanding Solid Shares are held by
Persons other than Blue and Lion and other than Persons who hold in excess of 5%
of the Solid Shares (other than investment funds, mutual funds and institutional
investors), Market Value shall be determined in accordance with Section 6.
(m) "Minimum Number" shall have the meaning specified in
Section 2(a).
(n) "Other Matter" shall have the meaning specified in Section
2(d).
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(o) "Person" (i) means any natural person, corporation,
company, limited or general partnership, joint stock company, joint venture,
association, limited liability company, trust, bank, trust company, land trust,
business trust or other entity or organization organized or existing under any
law and (ii) shall, for purposes of the definition of "Change in Control" in
Section 3(e) only, also mean, as a single Person, any group or syndicate of
Persons, as defined by clause (i) hereof, acting in concert for the purpose of
acquiring, holding or disposing of securities of any other Person, as defined in
such clause (i).
(p) "Principals" means Blue and Lion and their respective
successors and assigns.
(q) "Prohibited Transferee" shall have the meaning specified
in Section 3(b).
(r) "Share Closing Date" shall have the meaning specified in
Section 2.3(b)(i) of the Transaction Agreement.
(s) "Significant Matter" shall have the meaning specified in
Section 2(d).
(t) "Solid" shall have the meaning specified in the preamble
of this Shareholders Agreement.
(u) "Solid Shares" means the ordinary shares, FF 50 par value,
of Solid.
(v) "Statuts" means the Statuts of Solid as in effect from
time to time.
(w) "Strategic Committee" means the committee of the Board
referred to in Section 2(c).
(x) "Subsidiary" means, with respect to any Person, any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person, are held by the
Person or one or more of its Subsidiaries.
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(y) "Transaction Agreement" shall have the meaning specified
in the preamble of this Shareholders Agreement.
(z) "Transfer" shall have the meaning specified in Section
3(b).
(aa) "Wholly-Owned Subsidiary" means, with respect to a
Person, a Subsidiary of such Person all of the capital stock of which (other
than directors' qualifying shares) is owned by such Person.
2. MANAGEMENT OF SOLID.
(a) For so long as Blue holds 10% or more of the outstanding
Solid Shares (but subject to Section 2(h) below), Blue shall be entitled to
designate from time to time a number of Board members (the "Blue Nominees")
equal to the greater of (i) two and (ii) the largest whole number (the "Minimum
Number") that does not exceed 20% of the total number of Board members. In the
event that any of such Blue Nominees shall cease to serve as a director for any
reason, Lion and Blue agree, in their capacity as shareholders of Solid, to
cause the vacancy resulting thereby, subject to the terms of this Shareholders
Agreement, with a person designated by Blue (and such person shall be a "Blue
Nominee" for purposes hereof). Notwithstanding the foregoing, Lion shall not
have any obligation to support the nomination, recommendation or election of any
Blue Nominee pursuant to this Section 2(a) if Blue has acquired any Solid Shares
in violation of the terms of this Shareholders Agreement or otherwise materially
breached its obligations hereunder. The Principals agree that, during the term
of this Shareholders Agreement, they will vote their respective Solid Shares at
any meeting of shareholders of Solid at which directors are to be elected for
the number of Blue Nominees, if any, necessary so that following such election
of directors not fewer than the Minimum Number of Blue Nominees are serving on
the Board.
(b) Upon the termination of this Shareholders Agreement or in
the event of a breach of the terms hereof by Blue at any time, Blue shall have
no further rights under this Section 2 and shall cause all Blue Nominees on the
Board to resign promptly from the Board and any committees thereof. In addition,
if at any time Blue directly or indirectly owns Solid Shares representing less
than 10% of the outstanding Solid Shares, Blue shall cause to resign promptly
from the Board that number of Blue Nominees as shall exceed the number of
directors that Blue would then be entitled to designate pursuant to Section 2(a)
(i) or Section 2(a) (ii), as the case may be, provided, however, that if Blue is
entitled to acquire additional Solid Shares pursuant to Section 2(h), the Blue
Nominees shall not be required to resign until the passage of the 30-day notice
period under Section 2(h) or, if notice is given pursuant to Section 2(h), until
the passage of the 180-day acquisition
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period under Section 2(h) in the event that following the passage of such period
Blue's ownership of Solid Shares remains less than 10%.
(c) The Principals agree that, at any time Blue is entitled to
have Blue Nominees serve on the Board, all Significant Matters, Other Matters
and Discussion Matters shall be submitted to the Board for the prior approval by
the Board. The Principals further agree that the Board will establish a
"Strategic Committee" of the Board made up of two members of the Board
designated by Lion, one member of the Board designated by the Chief Executive
Officer of Solid and, for so long as Blue owns at least 10% of the outstanding
Solid Shares (but subject to Section 2(h)), one member of the Board who is a
Blue Nominee. Any party may designate any individual to substitute for any of
its representatives on the Strategic Committee at any meeting at which any such
representative does not attend, provided, that any such substitute need not
otherwise be a member of the Strategic committee.
The member of the Strategic Committee designated by the Chief
Executive Officer of Solid will be the Chairman of the Strategic Committee and
the member of the Strategic Committee designated by Blue will be the
Vice-Chairman of the Strategic Committee.
Unless the Strategic Committee unanimously determines not to
consider a Significant Matter, Other Matter or Discussion Matter, each
Significant Matter, Other Matter and Discussion Matters must be approved by the
Strategic Committee of the Board in accordance with the procedures set forth in
this Section 2(c) prior to proposal to the Board for its consideration,
provided, however, that if the Strategic Committee does not act on a Significant
Matter, Other Matter or Discussion Matter within seven days of notice being
given in accordance with this Section to consider any such Significant Matter,
Other Matter or Discussion Matter, the Board shall be free to vote on any such
issue without the prior vote of the Strategic Committee.
In the event that the Blue designee to the Strategic Committee
has voted against adoption of a proposal with respect to a Significant Matter or
an Other Matter that has been approved by a majority of the members present at a
meeting of the Strategic Committee, then, prior to submission of such
Significant Matter or Other Matter to the Board for approval, Blue and Lion
shall consult in good faith for a period of 30 days (the "Consultation Period")
in an effort to reach agreement on how to proceed with respect to such
Significant Matter or Other Matter. Following such Consultation Period with
respect to such Significant Matter or Other Matter, the Significant Matter or
Other Matter shall be resubmitted to the Strategic Committee for consideration
and, if approved by a majority of the members present at the meeting of the
Strategic Committee, may then be submitted to
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the Board for consideration. The foregoing provisions shall not apply to
Discussion Matters.
Meetings of the Strategic Committee may be called at any time
by the Board, the Chairman of the Strategic Committee or the Vice-Chairman of
the Strategic Committee. Meetings of the Strategic Committee may be held at any
time, in Paris or any other place as the Chairman of the Strategic Committee and
the Vice-Chairman of the Strategic Committee shall mutually agree. Reasonable
notice of meetings of the Strategic Committee (taking into account the urgency
of the matter to be considered) shall be given by the person or persons calling
the meeting. Members of the Strategic Committee may participate in a meeting of
such committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting shall constitute presence in person
at such meeting. At all meetings of the Strategic Committee a majority of the
entire Strategic Committee shall constitute a quorum for the transaction of
business, provided that at least one of the members present is a Blue designee.
The vote of a majority of the members of the Strategic Committee present at a
meeting at which a quorum is present shall be the act of the Strategic
Committee. In case at any meeting of the Strategic Committee a quorum shall not
be present, the members of the Strategic Committee present may adjourn the
meeting from time to time until a quorum shall attend. Any action required or
permitted to be taken at any meeting of the Strategic Committee may be taken
without a meeting if all members of the Strategic Committee consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Strategic Committee.
The validity, authorization or enforceability of any contract,
agreement or instrument entered into by Solid or any of its Subsidiaries shall
not be affected by the operation of this Section 2.
(d) A "Significant Matter" shall mean any action, or failure
to act, taking or having the effect of any of the following:
(i) Approval of the annual operating and capital
budgets of Solid for any year;
(ii) Approval of the acquisition, regardless of the
form thereof, by Solid or any Solid Subsidiary of the assets or
securities of another Person for consideration greater than $50 million
in value;
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(iii) Approval of the entry by Solid or any Solid
Subsidiary into any joint venture, partnership, strategic alliance,
merger or other business combination with another Person pursuant to
which the value of the consideration paid or received by Solid (or the
Solid Subsidiary) is greater than $50 million in value;
(iv) Approval of the sale or other divestiture of
assets of Solid or a Solid Subsidiary either (i) having a book value at
the time of sale or divestiture of greater than $50 million, (ii) for
consideration greater than $50 million or (iii) for consideration less
than the fair market value of the assets proposed to be sold or
divested (as determined in the sole discretion of the Board) or for no
consideration;
(v) A decision by the Board or the shareholders of
Solid to issue or authorize the issue of equity securities of, or any
other derivative security or financial instrument giving a right to an
equity participation in, Solid, in any case in an amount in excess of
$100 million or, in the case of a capital increase reserved to Lion or
any Affiliate of Lion, in any amount in excess of $10 million,
provided, however, that a proposed issuance of equity securities, or
such derivative securities or financial instruments, in excess of $100
million shall be deemed not to be a Significant Matter if Blue is given
the opportunity to subscribe for its pro rata share of such securities
(based on its percentage ownership of Solid's capital) of such
issuance;
(vi) Presenting resolutions to the shareholders to
approve an amendment of Solid's Statuts; and
(vii) Approval of any agreement as to any transaction
or series of related transactions between Solid (or any Subsidiary
thereof) and Blue or any Subsidiary or Affiliate of Blue or between
Solid (or any Subsidiary thereof) and Lion or any Subsidiary or
Affiliate of Lion involving consideration or value which is greater
than $10 million or the term of which exceeds one year or that is on
terms which are less favorable to Solid (or any Subsidiary thereof)
than could be obtained in arm's-length dealings with an independent
third party (as determined in the sole discretion of the Board).
An "Other Matter" shall mean any determination by Solid to
enter a new line of business, provided that (i) entering into a business related
or incidental to Solid's existing business operations shall be deemed not to be
entering into a new line of business and (ii) this provision shall not apply to
a new line of business if the aggregate
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expenditure by Solid involved in entering into such new line of business is less
than $50 million.
A "Discussion Matter" shall mean (i) a proposal by the
management of Solid to expand its Waste Business into new countries or (ii)
establishment of rates of return criteria for the operations of Solid.
(e) All meetings of the Board and of the Strategic Committee
may be conducted in French. Blue Nominees shall be entitled to be accompanied at
such meetings by a translator if they desire.
(f) Blue and Lion shall each be present, and shall cause any
of their respective Affiliates that hold Solid Shares to be present, in person
or by proxy, at all meetings of Solid shareholders. Blue and Lion agree that,
for a period of 10 years, to the extent permitted by applicable law, they shall
cast their votes at all meetings of shareholders in favor of the resolutions
submitted by the Board. No vote by Blue at a shareholders meeting with respect
to an item that constitutes a Significant Matter or Other Matter shall be deemed
to constitute a waiver by Blue of its rights under Section 3(d) with respect to
such Significant Matter or Other Matter. Lion and Blue shall vote its shares in
favor of the other's nominees to the Board.
(g) In the event Lion materially breaches any significant
obligation (i) to present Significant Matters or Other Matters to the Strategic
Committee or the Board or (ii) to vote its Solid Shares in support of the Blue
Nominees, each in accordance with the terms of this Section 2, Blue shall
promptly give Lion written notice thereof and if Lion does not cure such breach
within 30 days of such notice from Blue, Blue shall have the right at its option
to put all, but not less than all, of its Solid Shares to Lion at 110% of the
Market Value of such Solid Shares. The rights set forth in this subsection (g)
shall be in addition to any remedy Blue may otherwise have.
(h) For purposes of Sections 2(a) and 2(c), Blue shall not be
deemed to own 10% of the Solid Shares in the event that Blue has at any time
Transferred Solid Shares such that, following such Transfer, Blue owns less than
10% of the Solid Shares (whether or not Blue thereafter acquires additional
Solid Shares). In the event that, as a result of an issuance of additional Solid
Shares or as a result of a stock split, reclassification or other
recapitalization of Solid, Blue's ownership of Solid Shares decreases to below
10%, Blue shall notify Solid in writing within 30 days of such issuance, stock
split, reclassification or recapitalization whether Blue intends to acquire
additional Solid Shares to increase its ownership to 10% or more and, if so,
Blue shall have a period of 180 days from the date of such issuance, stock
split, reclassification or other
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recapitalization to acquire additional Solid Shares to increase its ownership of
Solid Shares to 10%. If Blue gives such notice and effects such acquisition
during such 180 day period, Blue shall be deemed for purposes of Section 2(a)
and 2(c) to have owned 10% at all times.
(i) At any time Blue is entitled under the provisions of this
Section 2 to have a Blue Nominee serve on the Board, Blue shall be entitled to
have one Blue Nominee serve on the compensation committee of the Board.
3. TRANSFERS AND ACQUISITIONS OF SOLID SHARES.
(a) Transfers of Shares Between the Principals and their
Subsidiaries. Notwithstanding any other provision of this Agreement, Solid
Shares owned by Blue or a Subsidiary of Blue may be Transferred by Blue or such
Subsidiary, as the case may be, to any Wholly-Owned Subsidiary of Blue or, in
the case of Solid Shares issued to or owned or held by such Subsidiary, to Blue,
provided that (i) written notice of such Transfer is given to Lion by Blue and
(ii) any Wholly-Owned Subsidiary of Blue to which any Solid Shares are to be
Transferred agrees to be bound by all the terms and provisions of this
Shareholders Agreement applicable to Blue.
Solid Shares owned by Lion or a Subsidiary of Lion may be
Transferred by Lion or such Subsidiary, as the case may be, to any Subsidiary of
Lion, or in the case of Solid Shares issued to or owned or held by such
Subsidiary, to Lion, provided that (i) written notice of such Transfer is given
to Blue by Lion and (ii) such transferee agrees to be bound by all the terms and
provisions of this Shareholders Agreement applicable to Lion.
(b) Disposition of Shares. Other than as set forth in Sections
3(a), 3(d) and 3(e), except with the prior written consent of Lion (which may be
granted or withheld in Lion's sole discretion) neither Blue nor any Subsidiary
of Blue may sell or transfer (including by dividend, pledge or mortgage) or
otherwise dispose of (collectively, "Transfer"), or permit any pledgee or
mortgagee of Blue or any Subsidiary of Blue to Transfer, any Solid Shares (i)
for a period of three years from the Closing Date (the "Lock-Up Period") or (ii)
following the Lock-Up Period, except in accordance with the provisions of
Section 3(c). Notwithstanding anything to the contrary in this Section 3,
neither Blue nor any Subsidiary of Blue may Transfer, or permit any pledgee or
mortgagee of Blue or any Subsidiary of Blue to Transfer, any Solid Shares to any
entity listed on Annex I hereto (a "Prohibited Transferee").
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(c) Sale of Shares. In the event that, at any time after the
Lock-Up Period, Blue desires to Transfer all or any portion of its Solid Shares
(other than in accordance with Section 3(a)) (including, in the context of an
offre publique de vente or a private placement with unidentified purchasers, to
any underwriter or underwriters) for a fixed price in cash, then Blue shall
first offer or cause to be offered such stock for sale to Lion at a price and on
terms which Blue is prepared to accept, in accordance with the following
provisions:
(i) Blue shall give notice in writing to Lion
indicating the number of Solid Shares Blue desires to Transfer and
specifying the price and terms which it is prepared to accept and
irrevocably offering such Solid Shares to Lion or any Person designated
by Lion.
(ii) Within 30 days from the receipt of such notice,
Lion shall deliver a written notice to Blue stating whether Lion or its
designee accepts such offer. If Lion fails to deliver such notice
within such 30-day period, Lion shall be deemed conclusively not to
accept such offer.
(iii) In the event that, within 30 days from the
receipt of the notice of Blue referred to in Section 3(c)(i), Lion
delivers a written notice to Blue to the effect that Lion accepts such
offer, delivery of such notice shall constitute an agreement binding on
Blue and Lion to sell and to purchase (or to cause Lion's designee to
purchase, as the case may be), respectively, all of the Solid Shares
offered by Blue, subject to receipt of any required regulatory
approvals, at the price and upon the terms stated in the offer of Blue.
(iv) If Lion fails to accept the offer of Blue within
such 30-day period specified in Section 3(c)(ii), Blue shall be free
for a period of 90 days from the date of the notification to Lion under
Section 3(c)(i) to Transfer such Solid Shares to a third-party
purchaser or third-party purchasers at a price not less than the price
at which, and on terms no more favorable than, such Solid Shares were
offered to Lion as provided in the notice to Lion and, upon such
Transfer, such Solid Shares shall cease to be subject to the terms of
this Shareholders Agreement.
(v) In the event that Blue (or its Subsidiary) does
not complete the Transfer contemplated by the foregoing Section
3(c)(iv) above within a period of 90 days from the date of the
notification to Lion under Section 3(c)(i) of its desire to sell Solid
Shares, all the provisions of this Section 3(c), including the notice
and offer provisions of Section 3(c)(i), (ii) and (iii), shall apply to
any proposed Transfer of such Solid Shares, other than as provided
under Section 3(a).
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(vi) Any purchase of Blue's Solid Shares by Lion
pursuant to Section 3(c)(iii) shall be completed in any manner
permitted by then applicable French law and regulations upon payment of
the purchase price to Blue (provided that Blue or its Subsidiary, as
the case may be, shall have delivered good title to such Solid Shares
free of all encumbrances in the manner provided for by then applicable
French law).
(vii) In the event that Blue desires to Transfer all
or any portion of its Solid Shares (other than in accordance to Section
3(a)) for consideration other than a fixed price in cash, Lion shall
retain, at Blue's expense, a financial advisor independent of both Lion
and Blue to value such proposed consideration, Blue shall supply to
Lion and its financial advisors all information requested by them in
connection with such valuation, and Lion shall have the right to accept
Blue's offer to purchase such Solid Shares at the cash equivalent of
such consideration within 60 days from the receipt of the notice
referred to in Section 3 (c)(i). Such offer and purchase shall
otherwise be governed by the provisions of this Section 3(c).
(d) Significant Matter; Other Matter. In the event that on two
separate occasions within any 12 month period during the duration of this
Agreement, (i) the Blue designee to the Strategic Committee shall have voted
against adoption of a proposal with respect to a Significant Matter at the
meeting of the Strategic Committee following the Consultation Period with
respect to such Significant Matter and (ii) such Significant Matter shall have
been approved by a meeting of the Board at which all Blue Nominees present or
represented voted against approval of such Significant Matter (such vote by the
Board being a "Triggering Event") then Blue (or any Subsidiary thereof, as the
case may be) may sell all, but not less than all, of its Solid Shares to any
Person other than a Prohibited Transferee in accordance with the provisions of
Section 3(c) (subject to Lion's right to purchase such Solid Shares in
accordance with Section 3(c) by giving written notice to Lion within 10 days of
such Triggering Event). In the event Blue has exercised its right pursuant to
the immediately preceding sentence and at the end of the 90-day period provided
under Section 3(c)(iv) Blue has not sold its Solid Shares, Blue shall have the
right for a period of 30 days to put all, but not less than all, of its Solid
Shares to Lion at a price of 99% of the Market Value on the date of the
Triggering Event and, if at the end of such 30-day period Blue has not exercised
such put right, Lion shall have a right for a period of 30 days to call all, but
not less than all, of such Solid Shares at a price of 101% of the Market Value
on the date of the Triggering Event. In the event that Blue does not transfer
its Solid Shares pursuant to the right of first offer, put or call provisions of
this Section 3(d), all provisions of this Shareholders Agreement (including
Section 3(d) in the event of disagreements with respect to two additional
Significant Matters) shall continue to apply.
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In the event that during the duration of this Agreement, (i)
the Blue designee to the Strategic Committee shall have voted against adoption
of a proposal with respect to an Other Matter at the meeting of the Strategic
Committee following the Consultation Period with respect to such Other Matter
and (ii) such Other Matter shall have been approved by a meeting of the Board
(at which all Blue Nominees present or represented voted against approval of
such Other Matter) then Blue (or any Subsidiary thereof, as the case may be) may
sell all, but not less than all, of its Solid Shares to any Person other than a
Prohibited Transferee in accordance with the provisions of Section 3(c) by
giving written notice to Lion within 10 days of such meeting of the Board
(subject to Lion's right to purchase such Solid Shares in accordance with
Section 3(c)). In the event that Blue does not transfer its Solid Shares
pursuant to the right of first offer provisions of this Section 3(d) within 90
days of such notice, all provisions of this Shareholders Agreement (including
Section 3(d)) shall continue to apply.
The Principals agree that neither they nor any of their
respective Affiliates shall effect purchases of Solid Shares during the 20
trading days prior to any date upon which Market Value is determined pursuant to
this Shareholders Agreement.
(e) Change in Control. In the event of a Change in Control of
Blue, Lion shall have the option either (i) to call from Blue (or its
Subsidiaries, as the case may be) all, but not less than all, of Blue's Solid
Shares at a price equal to 101% of the Market Value of such Solid Shares as of
the date of such Change in Control by giving written notice to Blue at any time
prior to the 30th day following receipt by Lion of written notice from Blue of
such Change in Control or (ii) to terminate this Shareholders Agreement by
giving written notice to Blue at any time prior to the 30th day following
receipt by Lion of written notice from Blue of such Change in Control.
In the event of a Change in Control of Lion, the Lock-Up
Period shall immediately terminate.
A "Change in Control" shall be deemed to have occurred as to
Blue or Lion if any Person is or becomes the owner, directly or indirectly, of
more than 30% of the total voting power of all shareholders or other equity
holders of Blue or Lion, as the case may be, entitled to vote generally in the
election of directors of Blue or Lion, as the case may be, provided, however,
that a Change in Control shall be deemed not to have occurred with respect to
Blue if Lion has approved the acquisition by such Person in writing in advance
of the acquisition and that a Change in Control shall be deemed not to have
occurred with respect to Lion if Blue has approved the acquisition by such
Person in writing in advance of the acquisition.
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(f) Pledge of Solid Shares. The provisions of Section 3(b) and
3(c) shall be deemed not to apply to any pledge or mortgage by Blue or any
Subsidiary thereof of the Solid Shares owned or held by it if such pledge or
mortgage is required or provided for under the terms of any mortgage, trust,
indenture or other agreement which provides that any Transfer of Solid Shares by
the pledgee or mortgagee shall be governed by the provisions of Sections 3(b)
and 3(c) of this Shareholders Agreement.
(g) Acquisitions of Solid, Lion and Blue Shares. At any time
this Shareholders Agreement is in effect, Blue agrees that none of Blue, any of
its Affiliates, or any group of which Blue or any such Affiliate is a member,
will acquire ownership (i.e., voting rights, economic rights or other rights) of
any Solid Shares (or securities convertible into or exercisable for Solid
Shares) except for (x) the acquisition of Solid Shares (provided that Blue has
not breached its obligations under this Shareholders Agreement) which would not,
after giving effect to such acquisition, result in ownership (i.e., voting
rights, economic rights or other rights) of Solid Shares representing more than
25% of the outstanding Solid Shares or 30% of the voting rights in respect of
the outstanding Solid Shares or (y) pursuant to a stock split, stock dividend,
rights offering, recapitalization, reclassification or similar transaction made
available to holders of Solid Shares generally; provided that any such Solid
Shares shall be subject to the restrictions of this Shareholders Agreement. In
the event that Blue directly or indirectly owns or acquires any Solid Shares in
violation of this Shareholders Agreement, such Solid Shares shall immediately be
disposed of to Persons who are not Affiliates of Blue (but only in compliance
with the provisions of this Shareholders Agreement relating to Transfers of
Solid Shares); provided, however, that Lion may also pursue any other available
remedy to which it may be entitled as a result of such violation. At any time
this Shareholders Agreement is in effect, Blue will give Solid reasonable prior
notice of any acquisition of Solid Shares by Blue, any of its Affiliates or any
group of which Blue or any such Affiliate is a member.
At any time this Shareholders Agreement is in effect, Blue
agrees that none of Blue or any of its Affiliates, or any group of which Blue or
any such Affiliate is a member, will acquire ownership (i.e., voting rights,
economic rights or other rights) of any shares of Lion's ordinary shares, par
value FF 60 per share (or securities convertible into or exercisable for Lion
ordinary shares). In the event that Blue owns or acquires any Lion ordinary
shares in violation of this Shareholders Agreement, such Lion ordinary shares
shall immediately be disposed of in an orderly fashion to Persons who are not
Affiliates of Blue and who will not, to the knowledge of Blue, after such
disposition, own more than 5% of the outstanding Lion ordinary shares, provided
that such 5% limitation shall not apply to transfers to investment funds, mutual
funds and other similar types of passive investors; provided, further however,
that Lion may also pursue any other available remedy to which it may be entitled
as a result of such violation. At any time this Shareholders Agreement is in
effect, Blue will give Solid reasonable prior notice of any
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acquisition of Lion ordinary shares by Blue, any of its Affiliates or any group
of which Blue or any such Affiliate is a member.
At any time this Shareholders Agreement is in effect, Lion
agrees that none of Lion, Solid, any of their Affiliates, or any group of which
Lion, Solid or any such Affiliate is a member, will acquire ownership (i.e.,
voting rights, economic rights or other rights) of any shares of Blue's Common
Stock, par value $0.162/3 per share (or securities convertible into or
exercisable for Blue Common Stock) except for (x) the acquisition of Blue Common
Stock (provided that Lion has not breached its obligations under this
Shareholders Agreement) which would not, after giving effect to such
acquisition, result in ownership (i.e., voting rights, economic rights or other
rights) of Blue Common Stock representing more than 10% of the outstanding Blue
Common Stock or (y) pursuant to a stock split, stock dividend, rights offering,
recapitalization, reclassification or similar transaction made available to
holders of Blue Common Stock. In the event that Lion beneficially owns or
acquires any Blue Common Stock in violation of this Shareholders Agreement, such
Blue Common Stock shall immediately be disposed of in an orderly fashion to
Persons who are not Affiliates of Lion or Solid and who will not, to the
knowledge of Lion or Solid, after such disposition, own more than 5% of the
outstanding Blue Common Stock, provided that such 5% limitation shall not apply
to transfers to investment funds, mutual funds and other similar types of
passive investors; provided, further however, that Blue may also pursue any
other available remedy to which it may be entitled as a result of such
violation. At any time this Shareholders Agreement is in effect, Lion and Solid
will give Blue reasonable prior notice of any acquisition of Blue's Common Stock
by Lion, Solid, any of their Affiliates, or any group of which Lion, Solid or
any such Affiliate is a member.
(h) Other than with respect to a Transfer in accordance with
Section 3(a), the rights of Blue under this Shareholders Agreement shall not be
transferable and shall terminate with respect to any Solid Shares Transferred by
Blue. Any Solid Shares Transferred by Blue in accordance with the provisions of
Section 3 shall be free of any restrictions under this Shareholders Agreement.
4. RESOLUTION OF DISPUTES. Any dispute between the Principals
arising out of this Shareholders Agreement, whether as to this Shareholders
Agreement's construction, interpretation or enforceability or as to any
Principal's breach or alleged breach of any provision of this Shareholders
Agreement, shall be submitted to final and binding arbitration in accordance
with the following procedures:
(a) Either Principal may demand such arbitration by
giving written notice of that demand to the other Principal. Any such
arbitration shall be before a panel of three arbitrators, one selected
by each Principal and the third
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(who shall serve as chairman of the tribunal) selected by the agreement
of each of the two arbitrators selected by the Principals in the manner
set forth in Section 4(b). The notice pursuant to this Section 4(a)
shall state (x) the matter in controversy and (y) the name of the
arbitrator selected by the Principal giving the notice.
(b) Not more than 15 days after notice is given
pursuant to Section 4(a), the other Principal shall give written notice
to the Principal who demanded arbitration of the name of an arbitrator
selected by the other Principal. If the other Principal shall fail to
give such notice within such 15 day period, a second arbitrator shall
be selected in accordance with the Arbitration Rules of the
International Chamber of Commerce (the "Arbitration Rules"). Not more
than 30 days after the second arbitrator is so named, the two
arbitrators shall select a third arbitrator. If the two arbitrators
shall fail to select a third arbitrator within such 30 day period, the
third arbitrator shall be named pursuant to the Arbitration Rules.
All arbitrators shall be fluent in English and French.
(c) The dispute shall be arbitrated at a hearing to
be conducted in French, although documents may be submitted in English
or French. The arbitration shall take place in Geneva or such other
place as the Principals agree and shall be concluded as soon as
practicable in accordance with the Arbitration Rules. Any award, which
may be made by a majority of the arbitrators, shall be made as soon as
possible following the conclusion of the arbitration and shall be
conclusive and binding on the parties and may be entered as a judgment
of any court having jurisdiction.
(d) Each Principal shall bear half the arbitrators'
fees and expenses and administrative expenses of the arbitration and
its own legal and other costs.
The agreement of the Principals contained in the foregoing provisions of Section
4 shall be a complete defense to any action, suit or other proceeding instituted
in any court or before any administrative tribunal with respect to any dispute
between the Principals arising out of this Shareholders Agreement.
5. SALES BY LION. (a) Lion will not reduce its ownership of Solid
Shares to less than 40% of the outstanding Solid Shares voting rights unless
Lion receives a written opinion of a nationally recognized French law firm in
form and substance satisfactory to Blue, and delivers a copy of such opinion to
Blue, to the effect that Lion and Blue will not be obligated to launch a tender
offer for all of the outstanding Solid Shares as a result of
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such reduction in ownership. The parties agree that the provisions of this
Section 5(a) are in addition to, and do not negate, the rights provided to Blue
under the agreements executed in connection with the transactions contemplated
by this Shareholders Agreement.
6. In the event that Market Value is being determined at any time
when less then 20% of the outstanding Solid Shares are held by Persons other
than Blue and Lion and other than Persons who hold in excess of 5% of the Solid
Shares (other than investment funds, mutual funds and institutional investors),
Market Value shall be determined as follows:
Blue shall designate and appoint an investment bank to
participate in establishing Market Value. Within 15 days after written notice of
the identity of such investment bank by Blue is given, Lion shall appoint an
investment bank to participate in establishing Market Value. Using generally
accepted valuation techniques and investment banking methodology, such
investment banks as so appointed shall endeavor to agree upon the Market Value
of the subject Solid Shares and shall, within 30 days following the engagement
of the second such investment bank, each deliver to the other in writing the
amount arrived at as representing its opinion as to Market Value. If such
amounts are the same (an "agreed value") or one of them shall be no less than 90
percent of the other, then the Market Value shall be the agreed value or the
arithmetic mean of the two. If the two investment banks are unable to agree
within 30 days after the appointment of its investment bank by Lion or if one of
the amounts proposed by one of such two investment banks shall be less than 90
percent of the other, then such Market Value shall be established by a third
investment bank appointed by the two investment banks named by the Principals
or, failing such appointment by such investment banks within five days after the
expiry of their 30-day period of effort, then by the President of the Paris
Commercial Court. Such third investment bank shall be instructed to establish
such Market Value (which shall not be greater than the larger of the two
estimates nor less than the lesser of the two estimates), using generally
accepted valuation techniques and investment banking methodology, as soon as
possible and shall, upon completion of its task, so notify the Principals.
7. AMENDMENT. This Shareholders Agreement may not be amended
except by a written instrument signed on behalf of each of the Principals.
8. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and either delivered personally or by
facsimile transmission and shall be deemed given when received at the following
addresses or facsimile transmission numbers (or at such other address or
facsimile transmission number for a party as shall be specified by like notice):
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(a) If to Blue: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇ (77253)
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (facsimile transmission
number: (281) 870- 7825); with a copy (which shall not constitute notice) to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (facsimile transmission number: (▇▇▇) ▇▇▇-▇▇▇▇).
(b) If to Lion: ▇, ▇▇▇ ▇' ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
Attention: Le President du Directoire (facsimile transmission number: (331)
40.06.66.66); with copies (which shall not constitute notice) to Le Directeur
Juridique (facsimile transmission number: (331) 40.06.64.77) and ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (facsimile transmission number:
212-558-3588).
9. SEVERABILITY. Any term or provision of this Shareholders
Agreement that is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Shareholders Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Shareholders Agreement
in any other jurisdiction. If any provision of this Shareholders Agreement is so
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
10. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Shareholders Agreement (together with the documents and instruments delivered by
the parties in connection with this Shareholders Agreement or specifically
contemplated hereby) (a) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof; (b) is agreed to in English
and shall be read and interpreted according thereto notwithstanding any
translation hereof for the convenience of the parties into French; and (c) is
solely for the benefit of the Principals hereto and, other than as provided
herein, their respective successors, legal representatives and assigns and does
not confer on any other person any rights or remedies hereunder.
11. APPLICABLE LAW. THIS SHAREHOLDERS AGREEMENT SHALL BE GOVERNED
IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETA TION AND EFFECT, BY THE LAWS OF
FRANCE REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
12. ASSIGNMENT. Neither this Shareholders Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either Principal
except as contemplated hereby without the prior written consent of the other
Principals. Subject to the preceding sentence, this Shareholders Agreement will
be binding upon, inure to the
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benefit of and be enforceable by the Principals and their respective successors
and permitted assigns.
13. WAIVERS. Either Principal hereto may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other Principal and (b) waive performance of any of the
covenants or agreements contained herein. Any agreement on the part of a
Principal to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such Principal. Except as specifically
and explicitly provided in this Shareholders Agreement, no action taken pursuant
to this Shareholders Agreement shall be deemed to constitute a waiver by the
Principal taking such action of compliance with any covenants or agreements
contained in this Shareholders Agreement. The waiver by any Principal of a
breach of any provision hereof shall not operate or be construed as a waiver of
any prior or subsequent breach of the same or any other provisions hereof.
14. This Shareholders Agreement shall terminate and expire at the
later of (i) the fifth anniversary of the Share Closing Date and (ii) the date
on which Blue owns less than 5% of the outstanding Solid Shares.
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SUEZ LYONNAISE DES EAUX S.A.
By:
--------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES, INC.
By:
--------------------------------
Name:
Title:
Witnessed, as of the date hereof:
SITA S.A.
By:
--------------------------------
Name:
Title:
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ANNEX I
- Generale des Eaux
- Waste Management
- Bouygues
- Tredi-EMC
- FCC
- Caisse des Depots et Consignations
- EDF
- RWE
- VEW
- Rethmann
- Any affiliate of any of the foregoing entities.
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