SR TELECOM INC. - and - THE PARTIES SPECIFIED ON THE SIGNATURE PAGES HEREOF
Exhibit
99.2
-
and -
THE
PARTIES SPECIFIED ON
THE
SIGNATURE PAGES HEREOF
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Amended
and restated CANADIAN REGISTRATION RIGHTS AGREEMENT
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DATED
AS OF THE 15th
day of DECEMBER, 2006
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TABLE
OF CONTENTS
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ARTICLE
I INTERPRETATION
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2
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1.1
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Definitions.
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2
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ARTICLE
II REGISTRATION RIGHTS
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3
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2.1
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Demand
Registrations
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3
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2.2
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Piggy-Back
Registration Rights
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4
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2.3
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Registration
Expenses
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4
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2.4
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Short-Form
Registrations
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5
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2.5
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Restrictions
on Demand Registrations
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5
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2.6
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Selection
of Underwriters
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6
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ARTICLE
III REGISTRATION PROCEDURES
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6
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3.1
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Procedures
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6
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3.2
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Other
Sales
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8
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3.3
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Obligations
of Holder
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9
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ARTICLE
IV DUE DILIGENCE, INDEMNIFICATION
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9
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4.1
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Preparation;
Reasonable Investigation
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9
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4.2
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Indemnification
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10
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ARTICLE
V GENERAL
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12
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5.1
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No
Inconsistent Agreements
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12
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5.2
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Remedies
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12
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5.3
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Amendments
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13
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5.4
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Assignment
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13
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5.5
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Counterparts
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13
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5.6
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Severability
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13
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5.7
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Delays
or Omissions
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13
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5.8
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Descriptive
Headings
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13
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5.9
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Governing
Law
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14
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5.10
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Notices
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14
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5.11
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Termination
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14
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5.12
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Prior
Registration Rights Agreements
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14
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-i-
AMENDED
AND RESTATED CANADIAN REGISTRATION RIGHTS AGREEMENT
THIS
AGREEMENT
is dated as of the 15th
day of December, 2006.
BETWEEN
SR
TELECOM INC.,
a corporation incorporated under the laws of Canada (the “Company”).
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and -
The
Parties specified on the signature pages hereof.
RECITALS:
WHEREAS,
certain of the parties hereto, other than the Company, currently own 262,337,321
million common shares of the Company and in respect of those shares are parties
to Canadian Registration Rights Agreements dated August 22, 2005 and February
1,
2006, respectively (collectively, the "Canadian
Registration Rights Agreements");
WHEREAS,
certain of the parties hereto as of the date hereof have entered into that
certain Eighth Amending Agreement between the Company, as borrower, BNY Trust
Company of Canada, as agent, and the lenders party thereto, further amending
the
Credit Agreement, dated as of May 19, 2005, between the Company, BNY Trust
Company of Canada and the lenders party thereto (as the same may from time
to
time be amended, restated, modified or supplemented, the “Credit
Agreement”);
WHEREAS,
pursuant to the Credit Agreement, the lenders thereunder have made a convertible
term loan to the Company which loan and interest accrued thereon are convertible
into common shares of the Company (the "Credit
Agreement Shares")
and shall be evidenced by convertible notes ("Convertible
Notes")
issued by the Company ( the "Credit
Agreement Shares"
together with all other common shares now owned or hereafter acquired by the
parties hereto, other than the Company, are hereinafter referred to as the
“Common Shares”);
WHEREAS,
in connection with the Credit Agreement, the Company desires to grant the
parties hereto that are lenders under the Credit Agreement certain registration
rights with respect to the Credit Agreement Shares;
WHEREAS,
the parties to the Canadian Registration Rights Agreements wish to amend and
restate such agreement on the terms hereof to include all Canadian registration
rights with respect to all Common Shares now owned or hereafter acquired by
the
parties hereto in one agreement; and
WHEREAS,
the Company and the parties hereto hereby agree that this Agreement shall govern
the rights of the parties to cause the Company to qualify for distribution
all
Common
Shares
now or hereafter owned by them (including those issuable on conversion of the
Convertible Notes);
NOW
THEREFORE
in consideration of the mutual covenants and agreements contained in this
Agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each of the parties), the
parties hereto agree as follows:
ARTICLE
I
INTERPRETATION
1.1 Definitions.
In
this Agreement, the following terms shall have the meanings set out
below.
“Commissions”
means the securities commissions or other securities authorities in each of
the
provinces of Canada.
"DDJ"
means DDJ Capital Management, LLC, in its capacity as manager and/or adviser
to
each Holder;
“Demand
Registration”
shall have the meaning set out in Section 2.1.
“Holder”
means each of those funds and/or accounts that DDJ manages or exercises control
or direction over that are or hereafter become holders of Common Shares and
that
are listed on the signature pages of this Agreement, and "Holders"
means all of them.
“Person”
means an individual, partnership, joint venture, trust, unincorporated
association, unincorporated syndicate, corporation or a government or any
department or agency thereof.
“Piggy-Back
Registration”
shall have the meaning set out in Section 2.2.
“Registrable
Securities”
means:
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(a)
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Common
Shares; and
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(b)
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any
securities of the Company issued in exchange for or in replacement
of the
Common Shares
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owned
by the Holder at the date hereof or thereafter (including all Common Shares
issuable on conversion of the Convertible Notes).
“Registration”
means the qualification of common shares of the Company under any of the
Securities Acts for distribution in any or all of the provinces of
Canada.
“Registration
Expenses”
means all expenses (other than fees or commissions payable to an underwriter,
investment banker, manager or agent in connection with the distribution of
the
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2
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Registrable
Securities) in connection with any Demand Registration or Piggy-Back
Registration pursuant to this Agreement including, without limitation, the
following:
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(a)
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all
fees, disbursements and expenses of counsel and auditors to the Company
and the Holder;
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(b)
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all
expenses in connection with the preparation, translation, printing
and
filing of any preliminary prospectus, prospectus or any other offering
document and any amendments and supplements thereto and the mailing
and
delivering of copies thereof to any underwriters and
dealers;
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(c)
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all
filing fees of any Commission;
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(d)
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all
transfer agents’, depositaries’ and registrars’ fees and the fees of any
other agent appointed by the Company in connection with the Demand
Registration;
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(e)
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all
expenses relating to the preparation of certificates for the Registrable
Securities; and
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(f)
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all
fees and expenses payable in connection with the listing of any
Registrable Securities on each securities exchange or over the counter
market on which the Common Shares are then
listed.
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“Securities
Acts”
means the applicable securities legislation of each of the provinces of Canada
and all published regulations, policy statements, orders, rules, rulings,
communiqués and interpretation notes issued thereunder or in relation thereto,
as the same may hereafter be amended or replaced.
ARTICLE
II
REGISTRATION
RIGHTS
2.1 Demand
Registrations.
At
any time and from time to time, each Holder individually, or together with
the
other Holders, may require the Company to effect a qualification under the
Securities Acts of all or part of the Registrable Securities owned or over
which
the Holder exercises control or direction for their distribution in any or
all
of the provinces of Canada, provided that the reasonably anticipated aggregate
gross proceeds to be raised (before any underwriting discounts and commissions)
would be equal to or exceed $1,000,000 (such qualification being hereinafter
referred to as a “Demand
Registration”).
Any such request shall be in writing and shall specify the number and the class
or classes of Registrable Securities to be sold (the “Designated
Registrable Securities”),
the intended method of disposition and the jurisdictions in which the
qualification is to be effected.
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2.2 Piggy-Back
Registration Rights.
If
the Company proposes to effect a Registration of common shares for a treasury
offering of common shares by the Company or for a secondary offering of common
shares, the Company will, at that time, give each Holder prompt written notice
of the proposed Registration. Upon the written request of a Holder given within
five (5) Business Days after receipt of notice from the Company of the proposed
Registration, the Company will use reasonable commercial efforts to, in
conjunction with the proposed Registration, cause to be included in such
Registration all of the Registrable Securities held by the Holder that the
Holder has requested to be included in such distribution pursuant to the
Securities Acts (such qualification of the Registrable Securities held by the
Holder being hereinafter referred to as a “Piggy-Back
Registration”).
If any offering pursuant to this Section 2.2 involves an underwritten offering
and the lead underwriter or underwriters advise the Company in writing that,
in
their opinion, acting reasonably, the number of Registrable
Securities
requested by the Holder to be included in such offering either exceeds the
number that can be sold in such offering within a price range acceptable to
the
Company (the “Sale
Number”)
or may materially and adversely affect the success of the offering, the Company
will
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(a)
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in
the case of a treasury offering by the Company, include in such
offering:
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(i)
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all
common shares that the Company proposes to qualify for its own account
(the “New
Common Shares”);
and
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(ii)
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to
the extent the number of New Common Shares is less than the Sale
Number,
that number of common shares not to exceed the difference between
the Sale
Number and the number of New Common Shares, with such number of common
shares being equal to the aggregate number of
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(A)
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Registrable
Securities requested to be included by the Holder;
and
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(B)
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common
shares of any other selling shareholder with registration rights,
with (A)
and (B) pro rated to each of the seller’s respective shareholdings on a
fully diluted basis; and
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(b)
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in
the case of a secondary offering, include the number of Registrable
Securities agreed upon by the Holder with the other selling shareholders
not to exceed the Sale Number or if the selling shareholders cannot
agree
upon such number not to exceed the Sale Number pro rated to each
of the
sellers’ respective shareholdings on a fully diluted
basis.
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In
the event a Holder does not include in a registration by way of secondary
offering any Registrable Securities, it shall not be permitted to effect a
Demand Registration for a period of 45 days from the closing of the
offering.
2.3 Registration
Expenses.
The
Company will pay all Registration Expenses in connection with a Demand
Registration and/or a Piggy-Back Registration, provided that, in connection
with
any one Demand
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4
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Registration
or any one Piggy-Back Registration, the Company shall not be liable for any
of
the Holders' legal fees in excess of $25,000.
2.4 Short-Form
Registrations.
If
at the time a Demand Registration is delivered or at the time that notice of
a
Piggy-Back Registration is given, the Company has in force a receipt for its
Annual Information Form from the Commissions in all of the jurisdictions in
which the Demand Registration is to be effected and meets the eligibility
criteria to file a prospectus pursuant to the requirements of National
Instrument 44-101 or any successor, rule, regulation or similar instrument
established from time to time by Commissions in Canada (“NI
44-101”),
the Company will effect such Demand Registration or Piggy-Back Registration
by
way of a short-form prospectus prepared pursuant to NI 44-101.
2.5 Restrictions
on Demand Registrations.
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(a)
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The
Company shall not be obligated to effect more than two Demand
Registrations hereunder while it does not meet the eligibility criteria
set out in NI 44-101 to file a short- form prospectus. There shall
be no
restriction on the number of Demand Registrations that may be requested
at
a time in which the Company meets the eligibility requirements for
a
short-form prospectus filing pursuant to NI 44-101. Notwithstanding
the
foregoing, the Company shall not be obligated to effect a Demand
Registration by way of short-form prospectus more than once in any
given
six (6) month period. For the purposes of this subsection, a Demand
Registration will not be considered as having been effected until
a final
receipt has been issued in all jurisdictions for
the prospectus pursuant to which the Registrable Securities are to
be
sold.
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(b)
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Notwithstanding
Section 2.1, the Company is not obligated to comply with a Holder’s
request for a Demand Registration for a period (the “Standstill
Period”)
ending on the earlier of:
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(i)
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90
days following the date on which the Company gave notice (a “Standstill
Notice”)
to the Holders that the Company is in the course of offering Common
Shares
(or securities convertible into or carrying the right to acquire
Common
Shares), or that it intends to do so within 30 days of such
notice;
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(ii)
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45
days following completion of the offering described in clause (i);
and
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(iii)
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45
days after the giving of the Standstill Notice if (1) in the case
of an
offering by way of prospectus, no preliminary prospectus has been
filed by
the end of the 45 day period; and (2) in the case of an offering
by way of
private placement, binding subscription agreements have not been
entered
into by the end of the 45 day period or an offering memorandum has
not
been distributed to potential purchasers by the end of the 45 day
period;
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5
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if,
in the opinion of the Company’s investment dealer acting reasonably (with a copy
of such written opinion to be supplied by the Company to the Holders), the
sale
of Registrable Securities pursuant to such Demand Registration at the time
and
on the terms requested would materially and adversely affect the offering of
Common Shares (or securities convertible into or carrying the right to acquire
Common Shares) undertaken or to be undertaken by the Company. The Company may
not deliver a Standstill Notice after receipt by the Company of a Demand
Registration and may not give a Standstill Notice to the Holders for a period
of
60 days following the termination of any Standstill Period.
2.6 Selection
of Underwriters.
Subject
to the approval of the Company, which approval shall not be unreasonably
withheld, the Holders will have the sole right to select the investment
banker(s) and manager(s) to administer the offering in connection with the
Demand Registration.
ARTICLE
III
REGISTRATION
PROCEDURES
3.1 Procedures.
Upon
receipt of a request from a Holder pursuant to Section 2.1, the Company will
effect a Demand Registration as requested. In particular, the Company will
as
expeditiously as possible:
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(a)
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prepare
and file (in any event within 60 days after the request for Demand
Registration has been delivered to the Company) in the English and,
if
required, French languages, a preliminary prospectus under and in
compliance with the Securities Acts in each jurisdiction in which
the
Demand Registration is to be effected and such other related documents
as
may be necessary to be filed in connection with any such preliminary
prospectus and shall, as soon as possible after any comments of the
Commissions have been satisfied with respect thereto, prepare and
file
under and in compliance with the Securities Acts a prospectus in
the
English and, if required, French languages, and receive receipts
therefor
and use its best efforts to cause a receipt to be issued for such
prospectus as soon as possible and shall take all other steps and
proceedings that may be necessary in order to qualify the Designated
Registrable Securities under the applicable Securities Acts for
distribution by registrants who comply with the relevant provisions
of the
Securities Acts (provided that, before filing all such documents
referred
to in this Section 3.1(a), the Company will furnish to the counsel
to the
Holder copies thereof and otherwise comply with Section 4.1
hereof);
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(b)
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prepare
and file with the applicable Commissions in the jurisdictions in
which the
Demand Registration is to be effected such amendments and supplements
to
such preliminary prospectus and prospectus as may be necessary to
comply
with the
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provisions
of the applicable Securities Acts with respect to the distribution
of
Designated Registrable Securities, and to take such steps as are
necessary
to maintain the qualification of such prospectus until the earlier
of (i)
the time at which the distribution of the Designated Registrable
Securities is completed and (ii) six months after the receipt for
such
prospectus has been issued by each of the applicable Commissions
(provided
that, before filing such documents, the Company will furnish to
the
counsel to the Holder copies thereof and otherwise comply with
Section 4.1
hereof);
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(c)
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furnish
to the Holders such number of copies of such preliminary prospectus,
prospectus, and any amendment and supplement thereto (including any
documents incorporated therein by reference) and such other relevant
documents as such Holder may reasonably request in order to facilitate
the
disposition of the Designated Registrable Securities owned by the
Holder;
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(d)
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cause
to be furnished to the Holders, the underwriter or underwriters of
any
offering and such other persons as the Holders may reasonably
specify:
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(i)
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an
opinion of counsel to the Company addressed to the Holders and the
underwriter or underwriters of such offering and dated the closing
date of
the offering as to the Company’s legal status and capacity, the Company’s
authorized share capital, the validity of the Designated Registrable
Securities, the “eligibility for investment” of the Designated Registrable
Securities, the enforceability of any underwriting agreement to which
the
Company is a party, and the qualification of the Registrable Securities
for sale;
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(ii)
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a
non-statutory “comfort” letter addressed to the underwriter or
underwriters dated the date of the preliminary prospectus, the prospectus
and the closing date of the offering signed by the auditors of the
Company
and providing comfort in relation to financial information contained
in
the prospectus;
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(iii)
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if
the prospectus is filed in Quebec, opinions of Quebec counsel to
the
Company and the auditors of the Company addressed to such Holder
and
relating to the translation of the preliminary prospectus and the
prospectus, such opinions being dated the dates of the preliminary
prospectus, prospectus and closing;
and
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(iv)
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such
corporate certificates as are customarily furnished in securities
offerings, and, in each case, covering substantially the same matters
as
are customarily covered in such documents in the relevant jurisdictions
and such other matters as such Holder may reasonably
request;
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(e)
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immediately
notify the Holders of the happening of any event during the period
in
Section 3.1(b) as a result of which the preliminary prospectus or
the
prospectus, as then in effect, would include an untrue statement
of
material fact or would omit
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any
fact that is required to be stated or that is necessary to make
any
statement therein not misleading in light of the circumstances
in which it
was made (other than facts or statements provided by the Holders
or any
underwriters);
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(f)
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otherwise
use its best efforts to comply with all applicable published instruments,
policies, rules and regulations of the applicable Commissions and
any
stock exchange, automated quotation system, and over the counter
market on
which the Designated Registrable Securities are then listed or quoted;
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(g)
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cause
all such Designated Registrable Securities to be listed on each securities
exchange, automated quotation system, or over the counter market
on which
similar securities issued by the Company are then
listed;
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(h)
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provide
a transfer agent and registrar for such Designated Registrable Securities
no later than the closing date of the
offering;
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(i)
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enter
into an underwriting agreement with the underwriters for the offering,
such agreement to contain such representations and warranties by
the
Company and such other terms and provisions as are customarily contained
in underwriting agreements with respect to secondary distributions
and
indemnification agreements consistent with Section 4.2 and such other
documents on such terms and conditions as are customary in secondary
offerings and take all such other actions as permitted by law as
the
Holders or the underwriters, if any, reasonably request in order
to
expedite or facilitate the disposition of the Designated Registrable
Securities by the Holders; and
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(j)
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in
the event of the issuance of any order or ruling suspending the
effectiveness of a prospectus receipt or of any order suspending
or
preventing the use of any prospectus or suspending the qualification
of
any of the Designated Registrable Securities qualified by such prospectus
for sale in any applicable Canadian provinces, the Company will notify
the
Holders of such event and use its best efforts promptly to obtain
the
withdrawal of such order or ruling.
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The
Holders will not (until further notice) effect sales of Designated Registrable
Securities or deliver any prospectus in respect of such sale after notification
by the Company of any order or ruling suspending the effectiveness of the
prospectus or after notification by the Company under paragraph (e)
hereof.
3.2 Other
Sales.
After
receipt by the Company of a Demand Registration, the Company will not without
the prior written consent of the Holders, which will not be unreasonably
withheld, authorize, issue or sell Common Shares or securities convertible
or
exchangeable into or exercisable for such securities in any jurisdiction or
agree to do so or publicly announce any intention to do so (except for
securities issued pursuant to any legal obligation in effect prior to the
delivery of the Demand Registration) until a period of at least 90 days has
elapsed from the date receipts are issued under all Securities Acts applicable
to the prospectus or 7.5 months after the date of the request for a Demand
Registration, whichever shall first occur.
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3.3 Obligations
of Holder.
3.3.1 In
connection with any Demand Registration, each Holder shall:
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(a)
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provide
such information with respect to itself and the number of securities
of
the Company held by the Holder as may be reasonably required by the
Company to comply with the applicable Securities Acts in each jurisdiction
in which the Demand Registration is to be
effected;
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(b)
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if
required under applicable Securities Acts, execute any certificate
forming
part of a preliminary prospectus, prospectus or similar document
to be
filed with the applicable
Commissions;
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(c)
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immediately
notify the Company of the happening of any event during the period
in
Section 3.1(b), as a result of which the preliminary prospectus or
the
prospectus, as in effect, would include an untrue statement of material
fact or would omit any fact that is required to be stated or is necessary
to make any statement therein not misleading in light of the circumstances
in which it was made insofar as such facts or statements relate to
or were
provided by the Holder; and
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(d)
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otherwise
use its best efforts not to breach all applicable published instruments,
policies, rules and regulations of the applicable Commissions and
any
stock exchange, automated quotation system, and over-the-counter
market on
which the Designated Registrable Securities are then listed or
quoted.
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3.3.2 Each
Holder agrees and acknowledges that, for so long as DDJ is its manager and/or
advisor, all such actions required to be taken by the Holder pursuant to this
Agreement shall be taken by DDJ on its behalf.
ARTICLE
IV
DUE
DILIGENCE, INDEMNIFICATION
4.1 Preparation;
Reasonable Investigation.
In
connection with the preparation and filing of any preliminary prospectus or
prospectus as herein contemplated, the Company will give the Holders and its
underwriters, if any, and their respective counsel, auditors and other
representatives, the opportunity to participate in the preparation of such
documents and each amendment thereof or supplement thereto, and shall insert
therein such material, furnished to the Company in writing, which in the
reasonable judgment of the Holders and their counsel should be included, and
will give each of them such reasonable and customary access to the Company’s
books and records and such reasonable and customary opportunities to discuss
the
business of the Company with its officers and auditors as shall be necessary
in
the opinion of any such Holder, such underwriters and their respective counsel,
and to conduct all reasonable and customary due diligence which any such Holder,
such underwriters and their respective counsel may reasonably require in order
to conduct a
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9
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reasonable
investigation for purposes of establishing a due diligence defence as
contemplated by the Securities Acts and in order to enable such underwriters
to
execute the certificate required to be executed by them in Canada for inclusion
in each such document.
4.2 Indemnification.
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(a)
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By
Company.
The Company agrees to indemnify, to the extent permitted by law,
each
Holder and each Person, if any, who participates as an underwriter
in the
offering or sale of the Designated Registrable Securities, their
respective officers and directors and each Person who controls such
Holder
or underwriter (within the meaning of any applicable Securities Act)
against all losses (excluding loss of profits), claims, damages,
liabilities and expenses arising out of or based upon (i) any information
or statement contained in the preliminary prospectus, the prospectus
or
any amendment thereto which at the time and in light of the circumstances
under which it was made contains a misrepresentation (as defined
in the
applicable Securities Act); (ii) any omission to state in the preliminary
prospectus or the prospectus any fact that was required to be stated
in
such document or necessary to make any statement in such document
not
misleading in light of the circumstances under which it was made;
(iii)
any order made or inquiry, investigation or proceedings commenced
or
threatened by any applicable Commission, court or other competent
authority based upon any untrue statement or omission or any
misrepresentation in the preliminary prospectus, the prospectus or
any
amendment thereto or based upon any failure to comply with applicable
securities laws (other than any failure by the Holder or the underwriters)
preventing or restricting the trading in or the sale and distribution
of
the Designated Registrable Securities pursuant to a Demand Registration;
and (iv) non-compliance by the Company with any of the Securities
Acts in
connection with a Demand Registration and the distribution effected
thereunder, except insofar as (v) any information or statement referred
to
in clause (i), (ii) or (iii) of this Section 4.2(a) has been furnished
in
writing to the Company by the Holder pursuant to Section 4.2(b) or
the
underwriters expressly for use therein or (vi) caused by such Holder’s or
any underwriter’s failure to deliver to a purchaser of Designated
Registrable Securities a copy of the prospectus or any amendments
or
supplements thereto after the Company has furnished such Holder with
a
sufficient number of copies of the
same.
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(b)
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By
Holders.
In connection with any Registration of Designated Registrable Securities,
the Holders will indemnify the Company, its directors and officers
and
each Person who controls the Company (within the meaning of any Securities
Act) against any losses (excluding loss of profits), claims, damages,
liabilities and expenses arising out of or based upon (i) any untrue
statement of material fact contained in the prospectus or any amendment
thereof or supplement thereto or any omission of a material fact
required
to be stated therein or necessary to make any statement therein not
misleading, but only to the extent that such untrue statement, or
omission
is contained in any information so furnished in writing by such Holders,
pursuant to this Section 4.2(b), or (ii) any default by the Holders
in
respect of its obligations under Section 3.3
hereof.
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10
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(c)
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Procedure.
Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect
to
which it seeks indemnification and (ii) unless in such indemnified
party’s
reasonable judgment a conflict of interest between such indemnified
and
indemnifying parties may exist with respect to such claim, permit
such
indemnifying party to assume the defense of such claim with counsel
satisfactory to the indemnified party, acting reasonably. If such
defense
is assumed, the indemnifying party will not be subject to any liability
for any settlement made by the indemnified party without its consent
(but
such consent will not be unreasonably withheld). An indemnifying
party who
is not entitled to, or elects not to, assume the defense of a claim
will
not be obligated to pay the fees and expenses of more than one counsel
for
all parties indemnified by such indemnifying party with respect to
such
claim, unless in the reasonable judgment of any indemnified party
a
conflict of interest may exist between such indemnified party and
any
other of such indemnified parties with respect to such claim. No
indemnifying party, without the express written consent of an indemnified
party, may settle any claims.
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(d)
|
Survival:
The indemnification provided for under this Agreement will survive
the
expiry of this Agreement and will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified
party and will survive any transfer of securities pursuant thereto.
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(e)
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Contribution.
If the indemnity and reimbursement obligation provided for in any
paragraph of this Section is unavailable or insufficient to hold
harmless
an indemnified party in respect of any losses (or actions or proceedings
in respect thereof) referred to therein, then the indemnifying party
shall
contribute to the amount paid or payable by the indemnified party
as a
result of such losses (or actions or proceedings in respect thereof)
in
such proportion as is appropriate to reflect the relative fault of
the
indemnifying party on the one hand and the indemnified party or the
other
hand in connection with the statements or omissions which resulted
in such
losses, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the
omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified
party
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by
pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first
sentence
of this paragraph. The amount paid by an indemnified party as a result
of
the losses referred to in the first sentence of this paragraph shall
be
deemed to include any legal and other expenses reasonable incurred
by such
indemnified party in connection with investigating or defending any
loss
which is the subject of this
paragraph.
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No
indemnified party guilty of fraudulent misrepresentation shall be entitled
to
contribution from the indemnifying party if the indemnifying party was not
guilty of such fraudulent misrepresentation. No contribution shall be made
by an
indemnifying party under circumstances where such party would not have been
liable for indemnification under Section 4.2. Moreover, contribution by a
Holder
of Designated Registrable Securities shall be limited in amount to the net
amount of proceeds received by such Holder from the sale of such Designated
Registrable Securities pursuant to such prospectus. The provisions of this
Section 4.2(e) shall remain in full force and effect, regardless of the
investigation made by or on behalf of the beneficiaries of this Section 4.2(e)
and shall survive the transfer of Designated Registrable Securities by the
Holders pursuant to Section 5.4 of this Agreement.
ARTICLE
V
GENERAL
5.1 Other
Agreements.
The
Company represents and warrants to each Holder that it has not, and covenants
with each Holder that it will not, enter into any agreement with respect to
its
securities that is inconsistent with or violates the rights granted to the
Holders pursuant to this Agreement. Other than this Agreement, a Canadian
registration rights agreement dated the date hereof entered into with Greywolf
Capital Management LP and those certain United States Registration Rights
Agreement dated August 22, 2005 and as of the date hereof, respectively
(collectively, the “Other
Registration Rights Agreements”),
the Company represents and warrants to the Holder that there is not in effect
on
the date hereof any agreement by the Company pursuant to which any holders
of
securities of the Company have a right to cause the Company to register or
qualify such securities under the Securities Acts or any securities or blue
sky
laws of any jurisdiction. The Company agrees that, for so long as any Holder
is
entitled to registration rights under this Agreement, the Company shall not
enter into any agreement, other than the Other Registration Rights Agreements,
granting registration rights with respect to the Company’s capital stock that
conflict with or impair, or have any priority over, the registration rights
granted hereby.
5.2 Remedies.
Any
Person having rights under any provision of this Agreement will be entitled
to
enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties hereto agree and acknowledge that money damages
may
not be an adequate remedy for any breach of the provisions of this Agreement
and
that any party may in its sole discretion apply to any court of law or equity
of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
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5.3 Amendments.
Except
as otherwise provided herein, the provisions of this Agreement may only be
amended with the prior written consent of the Company and the
Holders.
5.4 Assignment.
This
Agreement and the rights and obligations of the parties hereto shall bind and
enure to the benefit of each of the parties hereto. Each Holder shall have
the
right to transfer or assign any of its rights or obligations under this
Agreement in connection with the transfer of all of its Common Shares to a
third
party.
5.5 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, any one
of
which need not contain the signature of more than one party, but all such
counterparts taken together will constitute one and the same
Agreement.
5.6 Severability.
If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, portions of such provisions or such provisions in their
entirety, to the extent necessary, shall be severed from this Agreement, and
the
balance of this Agreement shall be enforceable in accordance with its
terms.
5.7 Delays
or Omissions.
No
delay or omission to exercise any rights, power or remedy accruing to any party
to this Agreement, upon the breach or default of the other party shall impair
any such rights, power or remedy of such non-breaching party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of the party
of any provisions or conditions of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to
the
parties, shall be cumulative and not alternative.
5.8 Descriptive
Headings.
The
descriptive headings of this Agreement are inserted for convenience only and
do
not constitute a part of this Agreement.
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5.9 Governing
Law.
All
question concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto will be governed by the internal
law, and not the law of conflicts, of the Province of Ontario.
5.10 Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or by facsimile transmission
or mailed (registered or certified mail, postage prepaid). Such notices, demands
and other communications will be delivered to the parties at the respective
addresses or facsimile numbers indicated below:
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(a)
|
if
to the Company:
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0000
XxxxxXxxxxx Xxxxxxx
Xxxxxxxx,
Xxxxxx
X0X
0X0
Attention:
Chief Financial Officer
Facsimile:
000-000-0000
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(b)
|
if
to the Holders, to:
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DDJ
Capital Management LLC
000
Xxxxxx Xxxxxx
Xxxxxxxx
0, Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Xxxxxx X. XxXxxxxx
Facsimile:
(000) 000-0000
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5.11 Termination.
This
Agreement shall terminate on the date on which the Holders, based on their
aggregate holdings (including any Common Shares issuable on conversion of the
Convertible Notes on the basis that only the Holders and no other holder of
Convertible Notes converts the Convertible Notes ) cease to hold less than
20%
of the issued and outstanding Common Shares (including Common Shares issuable
on
conversion of the Convertible Notes on the basis that only the Holders and
no
other holders of Convertible Notes converts the Convertible Notes) and otherwise
cease to be a person described in paragraph (c) of the definition of
“distribution” in the Securities
Act
(Ontario).
5.12 Prior
Registration Rights Agreements.
This
Agreement shall supercede all prior Canadian Registration Rights Agreements
between the parties relating to the distribution of securities in Canada and
all
such agreements are hereby terminated.
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IN
WITNESS WHEREOF, the parties hereto have caused the agreement to be duly
executed as of the date first above written.
|
By:
|
(s)
Xxxx Xxxxxx
|
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|
Name:
Title:
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||
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B
IV CAPITAL PARTNERS, L.P.
|
|
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By:
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GP
Capital IV, LLC, its General Partner
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By:
|
DDJ
Capital Management LLC, Manager
|
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By:
|
(s)
Xxxxx X. Xxxxxxxxx
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|
Name:
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Xxxxx
X. Xxxxxxxxx
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Title:
|
Member
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GMAM
INVESTMENT FUNDS TRUST II, for the account of Promark Alternative
High
Yield Bond Fund (Account No. 7M2E)
By:
DDJ Capital Management, LLC, on
behalf of GMAM Investment Funds Trust II, for the account of Promark
Alternative High Yield Bond Fund, in its capacity as investment manager
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|
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By:
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(s)
Xxxxx X. Xxxxxxxxx
|
|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
|
GMAM
INVESTMENT FUNDS TRUST II, for the account of Promark High Yield
Bond Fund
(Account No. 7MWD)
By:
DDJ Capital Management, LLC, on
behalf of GMAM Investment Funds Trust II, for the account of Promark
High
Yield Bond Fund, in its capacity as investment manager
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|
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By:
|
(s)
Xxxxx X. Xxxxxxxxx
|
|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
|
DDJ
OCTOBER FUND ONSHORE FEEDER, LIMITED
PARTNERSHIP
|
|
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By:
|
October
G.P., LLC, its general partner
|
|
By:
|
DDJ
Capital Management, LLC, its Manager
|
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By:
|
(s)
Xxxxx X. Xxxxxxxxx
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|
Name:
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Xxxxx
X. Breazzona
|
|
Title:
|
Member
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DDJ/ONTARIO
OS INVESTMENT SUB 2006 LTD.
|
|
|
By:
|
DDJ
Capital Management, LLC, in its capacity as Investment
Manager
|
|
By:
|
(s)
Xxxxx X. Xxxxxxxxx
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|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
|
OCTOBER
OS INVESTMENT SUB 2006, LTD.
|
|
|
By:
|
DDJ
Capital Management, LLC, in its capacity as Investment
Manager
|
|
By:
|
(s)
Xxxxx X. Xxxxxxxxx
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|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
|
DDJ
HIGH YIELD FUND
|
|
|
By:
|
DDJ
Capital Management LLC, its attorney-in-fact
|
|
By:
|
(s)
Xxxxx X. Xxxxxxxxx
|
|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
|
THE
OCTOBER FUND, LIMITED PARTNERSHIP
|
|
|
By:
|
October
G.P., LLC, its General Partner
|
|
By:
|
DDJ
Capital Management LLC, Manager
|
|
By:
|
(s)
Xxxxx X. Xxxxxxxxx
|
|
Name:
|
Xxxxx
X. Breazzona
|
|
Title:
|
Member
|
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