EXHIBIT 99.6
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REGISTRATION RIGHTS AGREEMENT
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THIS AGREEMENT dated as of this 16th day of August, 2007.
AMONG:
MITEL NETWORKS CORPORATION, a corporation incorporated under the
laws of Canada (the "CORPORATION")
and
ARSENAL HOLDCO I, S.A.R.L. AND ARSENAL HOLDCO II, S.A.R.L.
("FRANCISCO Partners"), and the other Francisco Partners
investors identified in Schedule A (collectively the "FP
INVESTORS")
and
XXXXXX XXXXXXX PRINCIPAL INVESTMENTS, INC. ("XXXXXX XXXXXXX") and
the other Xxxxxx Xxxxxxx investors identified in Schedule A
(collectively the "MS INVESTORS")
and
EDGESTONE CAPITAL EQUITY FUND II-B GP, INC., as agent for
EdgeStone Capital Equity Fund II-A, L.P. and its parallel
investors, and EDGESTONE CAPITAL EQUITY FUND II NOMINEE, INC., as
nominee for EdgeStone Capital Equity Fund II-A, L.P. and its
parallel investors ("EDGESTONE")
and
XXXXXXX X. XXXXXXXX, an individual residing in the City of
Ottawa, Province of Ontario ("XXXXXXXX")
and
XXXXXX XXXXXX CORPORATION, a corporation incorporated under the
laws of Newfoundland and Labrador ("WCC")
and
CELTIC TECH JET LIMITED, a corporation incorporated under the
laws of Canada ("CTJL", and together with the FP Investors, the
MS Investors, EdgeStone, Xxxxxxxx and WCC, the "PARTIES", and
each a "PARTY")
RECITALS:
A. Prior to or contemporaneously with the execution and delivery of this
Agreement: (i) the Corporation, the MS Investors and the FP Investors
entered into a subscription agreement (the "SUBSCRIPTION AGREEMENT") in
connection with the issuance and sale to the FP Investors and the MS
Investors of the Class 1 Shares (as such term is defined below).
B. The Class 1 Shares referred to above are being issued by the Corporation
prior to or contemporaneously with the execution and delivery of this
Agreement in order to finance, in part, the acquisition of Inter-Tel
(Delaware), Incorporated, pursuant to the Agreement and Plan of Merger
dated as of April 26, 2007, by and between Inter-Tel (Delaware),
Incorporated, the Corporation and Arsenal Acquisition Corporation.
C. As an inducement to the Parties to consummate or approve the transactions
referred to above, the Corporation hereby enters into the covenants and
agreements herein with each of the Parties respecting the registration of
the Registrable Securities under the United States SECURITIES ACT OF 1933
and/or the qualification of such Registrable Securities for trading under
the securities laws of the provinces of Canada, as set forth herein.
NOW THEREFORE the Parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS, PRINCIPLES OF INTERPRETATION
AND REPRESENTATIONS AND WARRANTIES
"AC VALUE" has the meaning ascribed thereto in the Articles of Amendment
attached as Schedule A to the Subscription Agreement
"AFFILIATE" of a Person means any Person that would be deemed to be an
"affiliated entity" of such first-mentioned Person under National Instrument
45-106 promulgated under the Canadian Securities Legislation on the date of this
Agreement;
"AGREEMENT" means this Registration Rights Agreement, including all schedules
hereto and all amendments or restatements hereof;
"ARTICLES OF AMENDMENT" means the articles of amendment of the Corporation
creating the Class 1 Shares in the form filed with the Director appointed under
the CANADA BUSINESS CORPORATIONS ACT AS amended and any successor legislation
and attached to the Shareholders Agreement;
"AS-IF CONVERTED TO COMMON SHARES BASIS" means, at any time and from time to
time, assuming the conversion or exchange of all outstanding Class 1 Shares and
all other securities of the Corporation that are exercisable, convertible or
exchangeable into Common Shares which are fully-vested and exercisable,
convertible or exchangeable on the date of the calculation at the respective
conversion rate or conversion prices or exchange rates, as the case may be,
applicable at such time;
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation;
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"BUSINESS DAY" means any day, other than a Saturday or Sunday, on which
chartered banks in Ottawa, Ontario and San Francisco, California are open for
commercial banking business during normal banking hours;
"CANADIAN COMMISSIONS" means the securities commission or similar regulatory
authority of each of the provinces or territories of Canada and any successor
regulatory authorities having similar powers;
"CANADIAN INCIDENTAL QUALIFICATION" has the meaning specified in subsection 2.3
of this Agreement;
"CANADIAN QUALIFICATION" means a Canadian Incidental Qualification or a Canadian
Requested Qualification as the context may require;
"CANADIAN REQUESTED QUALIFICATION" has the meaning specified in Section 2.1 of
this Agreement;
"CANADIAN SECURITIES LEGISLATION" means, collectively, the applicable securities
legislation, regulations, rules, policies, blanket rulings, decisions and orders
of each of the provinces of Canada and the Canadian Commissions;
"CANADIAN SHORT FORM QUALIFICATION" means a qualification for distribution under
Canadian Securities Legislation pursuant to National Instrument 44-101, as
applicable;
"CLASS 1 HOLDER" means each of the FP Investors and the MS Investors if and so
long as they hold Class 1 Registrable Securities, or any permitted assignee or
Permitted Transferee of record of such Class 1 Registrable Securities and the
registration and qualification rights pursuant to this Agreement related thereto
(in accordance with Section 3.4 hereof);
"CLASS 1 REGISTRABLE SECURITIES" means:
(i) any Common Shares issued or issuable on the conversion of the Class 1
Shares held by a Class 1 Holder; and
(ii) any Common Shares issued or issuable as a result of any share splits,
share dividends, reclassifications, capital reorganizations, or
similar events affecting the securities described in subpart (i) of
this definition;
"CLASS 1 SHARES" means the Class 1 Convertible Preferred Shares, in the capital
of the Corporation, including the Class 1 Convertible Preferred Shares currently
issued and any Class 1 Convertible Preferred Shares that may be issued after the
date hereof;
"COMMISSION(S)" means (i) with respect to a U.S. Registration, the SEC, and (ii)
with respect to a Canadian Qualification, the applicable Canadian Commission(s);
"COMMON SHARES" means the Common Shares in the capital of the Corporation,
including the Common Shares currently issued and any Common Shares that may be
issued after the date hereof;
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"CONTROL" means, with respect to any Person at any time,
(i) holding, as owner or other beneficiary, other than solely as the
beneficiary of an unrealized security interest, directly or indirectly
through one or more intermediaries: (A) more than 50% of the voting
securities of that Person; or (B) securities of that Person carrying
votes sufficient to elect or appoint the majority of individuals who
are responsible for the supervision or management of that Person; or
(ii) the exercise of DE FACTO control of that Person whether direct or
indirect and whether through the ownership of securities, by contract
or trust or otherwise;
and the terms "CONTROLS", "CONTROLLING" and "CONTROLLED" have corresponding
meanings;
"EDGESTONE GROUP" means
(a) any Affiliate of EdgeStone;
(b) any other Person, provided that EdgeStone or any Affiliate thereof has
the exclusive right to exercise all rights of EdgeStone transferred
hereunder on behalf of such Person;
(c) any Person whose funds are managed by EdgeStone or an Affiliate of
EdgeStone;
(d) EdgeStone Capital Equity Fund II-A, L.P. and /or any Person which
agrees to invest with it on a parallel or co-investment basis (and the
respective partners thereof, if any) in the manner contemplated in the
constating documents of EdgeStone Capital Equity Fund II-A, L.P or
EdgeStone Capital Equity Fund II-B, L.P.; and
(e) upon the termination or dissolution of any limited partnership or
other entity that is a limited, special or general partner of
EdgeStone, the beneficial holders of interests of such limited,
special or general partner.
"FRANCISCO PARTNERS GROUP" means:
(a) Francisco Partners;
(b) limited, special and general partners of Francisco Partners and
Francisco Partners II, L.P., and any Person to which Francisco
Partners II, L.P. shall transfer all or substantially all of its
assets;
(c) all Affiliates, employees and consultants of Francisco Partners and/or
Francisco Partners II, L.P.;
(d) any other Person, provided that Francisco Partners or any Affiliate
thereof has the exclusive right to exercise all rights of Francisco
Partners transferred hereunder on behalf of such Person;
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(e) any Person whose funds are managed by Francisco Partners or an
Affiliate of Francisco Partners and/or Francisco Partners II, L.P.;
and
(f) upon the termination or dissolution of any limited partnership or
other entity that is a Person referred to in clause (b) of this
definition, (A) the beneficial holders of interests in such Person,
and (B) any other Person referred to in clause (b) of this definition,
whether or not, in either case, an Affiliate described in clause (c)
has the exclusive right to exercise the rights of Francisco Partners
transferred hereunder on behalf of such beneficial holder or Persons;
"HOLDER" means each Party so long as it holds Registrable Securities, or any
permitted assignee or Permitted Transferee of record of such Registrable
Securities and the registration and qualification rights pursuant to this
Agreement related thereto (in accordance with Section 3.4 hereof), or, with
respect to Section 2.11 hereof, any such Person who has become a seller of
Registrable Securities;
"HOLDERS MAJORITY" means Francisco Partners (in which such case unanimous
consent provided by the Francisco Partners Nominees (as defined in Section 2.2
of the Shareholders Agreement) shall conclusively be deemed a Holders Majority);
provided, however, that if the Francisco Partners Group does not hold 5% or more
of the Common Shares (on an as-if converted to Common Shares basis), then
Holders Majority shall mean Holders representing not less than fifty percent
(50%) of the Registrable Securities held by all of the Holders (calculated on an
as-if converted to Common Shares basis);
"INCIDENTAL REGISTRATION" means, as applicable, a U.S. Incidental Registration
or a Canadian Incidental Qualification;
"INITIAL PUBLIC OFFERING" means the initial public offering of Common Shares or
other securities in the capital of the Corporation or the securities in the
capital of a Successor Corporation or any other transaction, as a result of
which (in either case) the shares of the Corporation or the Successor
Corporation are listed and posted for trading, traded or quoted on one or more
of the Toronto Stock Exchange, the New York Stock Exchange or the NASDAQ
National Market System;
"LONG FORM DEMAND NOTICE" has the meaning specified in Section 2.1 of this
Agreement;
"XXXXXXXX GROUP" means
(a) Xx. Xxxxxxx X. Xxxxxxxx, his spouse or former spouse, any lineal
descendant of Xx. Xxxxxxx X. Xxxxxxxx, any spouse or former spouse of
any such lineal descendant, and their respective legal personal
representatives;
(b) the trustee or trustees of any trust (including without limitation a
testamentary trust) for the exclusive benefit of any one or more
members of the Xxxxxxxx Group;
(c) any corporation all of the issued and outstanding shares of which are
beneficially owned by any one or more members of the Xxxxxxxx Group;
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(d) any partnership all of the partnership interests in which are
beneficially owned by any one or more members of the Xxxxxxxx Group;
and
(e) any charitable foundation Controlled by any one or more members of the
Xxxxxxxx Group,
and, for this purpose, a trustee or trustees referred to in clause (b)
above shall be deemed to beneficially own any shares or partnership
interests held by them.
"MS AFFILIATE" means any affiliate of any MS Investor. For the purposes of this
definition, "affiliate" means any Person that would be deemed an "affiliate"
under Rule 405 of the U. S. Securities Act;
"OTHER AGREEMENTS" means, collectively, the Shareholders Agreement, the
Subscription Agreement and all of the agreements, instruments, certificates, and
other documents, executed and delivered by or on behalf of the Corporation or
the Holders or any of their respective Affiliates in connection with the
Subscription Agreement and the transactions contemplated herein or therein;
"PERMITTED TRANSFEREE" of any Person means:
(i) in the case of a Person who is a natural person: (A) the spouse of
such Person; (B) any lineal descendant of such Person or a spouse of
any such descendant; (C) a trust (including, without limitation, a
testamentary trust) solely for the benefit of one or more of such
Person, the spouse of such Person or any lineal descendant of such
Person or a spouse of any such descendant; (D) any self-directed
registered retirement savings plan controlled by such Person; or (E) a
corporation of which all of the outstanding shares of each class of
shares of such corporation are beneficially owned, directly or
indirectly, in any manner (including, without limitation, through
intermediary corporations or trusts), by one or more of such Person,
the spouse of such Person, any lineal descendant of such Person or a
spouse of any such descendant or such trust and includes the legal
personal representative(s) of such Person or any Person referred to in
(A);
(ii) in the case of a corporation or a limited liability company: (A) any
shareholder of such corporation or member of such limited liability
company, as applicable, if such shareholder or member either alone or
together with one or more Permitted Transferees of such shareholder or
member beneficially owns, directly or indirectly, in any manner
(including, without limitation, through intermediary corporations or
trusts), all of the outstanding shares of each class of shares in the
capital of such corporation or membership interests of such limited
liability company; (B) any Permitted Transferee of such shareholder or
member; or (C) an Affiliate, all of the shares of which are owned by
such corporation and/or any Permitted Transferee (other than under
this subclause (ii)) of such corporation;
(iii) in the case of a Person which is a trustee: (A) any beneficiary of
such trust; (B) another trustee, provided that the class of
beneficiaries is limited to Permitted
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Transferees of the beneficiaries of the original trust; or (C) any
Permitted Transferee of such beneficiary;
(iv) in the case of a Person which is an estate of a deceased Person, a
Permitted Transferee of such deceased person determined pursuant to
this definition as if such Person were not deceased or a legal
personal representative of such Person holding on behalf of such
Permitted Transferees;
(v) in the case of a partnership, any partner of the partnership if all of
the partnership interests are beneficially held by such partner either
alone or together with one or more Permitted Transferees of such
partner;
(vi) in the case of Francisco Partners, any member of the Francisco
Partners Group;
(vii) in the case of MS Investors, any MS Affiliate;
(viii) in the case of any member of the Xxxxxxxx Group, any member of the
Xxxxxxxx Group; and
(ix) in the case of EdgeStone, any member of the EdgeStone Group.
"PERSON" includes any individual, corporation, limited liability company, sole
proprietorship, government body, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body corporate and
a natural Person in his capacity as trustee, executor, administrator, or other
legal representative;
"QUALIFIED IPO" has the meaning set forth in the Articles of Amendment;
"REGISTRABLE SECURITIES" means:
(i) any Common Shares held by, or issued or issuable on the conversion of
securities convertible, exchangeable or exercisable into Common Shares
(including, without limitation, the Class 1 Shares) held by, a Holder
as of the date of this Agreement, as set forth in Schedule A, or
acquired subsequent to the date hereof by a Holder (other than
securities acquired through brokerage transactions conducted through
the exchange on which the Corporation is listed after an Initial
Public Offering); and
(ii) any Common Shares issued or issuable as a result of any share splits,
share dividends, reclassifications, capital reorganizations, or
similar events affecting the securities described in subpart (i) of
this definition;
"REQUESTED REGISTRATION" means, as applicable, a U.S. Requested Registration or
a Canadian Requested Qualification;
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement of even date herewith
between the Corporation and the Shareholders (as such term is defined in the
Shareholders Agreement), as the same may be amended from time to time in
accordance with its terms;
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"SHARING FACTOR" means 0.6 for the Class 1 Holders and EdgeStone, to the extent
of 50% of the Registrable Securities of the EdgeStone Group, allocated among the
Class 1 Holders and the EdgeStone Group on a pro rata as-if-converted to Common
Shares basis and 0.4 for the Xxxxxxxx Group and the EdgeStone Group, to the
extent of 50% of the Registrable Securities of the EdgeStone Group, allocated
among the Xxxxxxxx Group and the EdgeStone Group on a pro rata as-if-converted
to Common Shares basis;
"SEC" means the United States Securities and Exchange Commission;
"SECURITIES LAWS" means, collectively, the Canadian Securities Legislation and
the U.S. Securities Legislation;
"SHARES" means, collectively, the Common Shares and the Class 1 Shares;
"SHORT FORM DEMAND NOTICE" has the meaning specified in Section 2.2 of this
Agreement;
"SHORT FORM REGISTRATION" means, as applicable, a U.S. Short Form Registration
or a Canadian Short Form Qualification;
"SUCCESSOR CORPORATION" has the meaning specified in Section 1.4 of this
Agreement;
"UNDERWRITER'S MAXIMUM NUMBER" means in connection with a firm underwritten
registration or offering of Shares or any shares of the capital stock or other
securities in the capital of the Corporation, a specified maximum number of
securities that, in the written opinion of the managing underwriters, may
successfully be included in such registration or offering having regard to the
dictates of then current and anticipated market conditions. For the purposes of
this definition, managing underwriters shall be investment banking firms of
nationally recognized reputation in the jurisdiction where the Registrable
Securities will be registered;
"U.S. EXCHANGE ACT" means the United States SECURITIES EXCHANGE ACT OF 1934, as
amended, or any successor statute thereto, and the rules and regulations of the
SEC promulgated thereunder, all as the same are in effect at the time;
"U.S. INCIDENTAL REGISTRATION" has the meaning specified in Section 2.3 of this
Agreement;
"U.S. REGISTRATION" means a U.S. Incidental Registration, a U.S. Requested
Registration or a U.S. Short Form Registration, as the context may require;
"U.S. REQUESTED REGISTRATION" has the meaning specified in Section 2.1 of this
Agreement;
"U.S. SECURITIES ACT" means the United States SECURITIES ACT OF 1933, as
amended, or any successor statute thereto, and the rules and regulations of the
SEC promulgated thereunder, all as the same are in effect at the time;
"U.S. SECURITIES LEGISLATION" means, collectively, the securities laws of the
United States, including the U.S. Exchange Act, the U.S. Securities Act, state
securities or "blue sky" laws within the United States, and all rules,
regulations and ordinances promulgated thereunder; and
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"U.S. SHORT FORM REGISTRATION" has the meaning specified in Section 2.2 of this
Agreement.
1.1 CERTAIN RULES OF INTERPRETATION
In this Agreement:
(a) CURRENCY - Unless otherwise specified, all references to money amounts
are to lawful currency of the United States of America. Any U.S.
dollar amounts in this Agreement required to be translated into
Canadian dollars shall be translated at the 10:00 a.m. spot rate of
the Federal Reserve Bank of New York on the Business Day prior to the
required translation date.
(b) GOVERNING LAW - This Agreement is a contract made under and shall be
construed, interpreted and enforced in accordance with the laws of the
Province of Ontario (excluding any conflict of law rule or principle
of such laws that might refer such interpretation or enforcement to
the laws of another jurisdiction). Subject to the provisions of
Section 3.7, any action, suit or proceeding arising out of or relating
to this Agreement shall be brought in the courts of the Province of
Ontario and each of the Parties hereby irrevocably submits to the
non-exclusive jurisdiction of such courts.
(c) HEADINGS - Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
(d) NUMBER AND GENDER - Unless the context otherwise requires, words
importing the singular include the plural and vice versa and words
importing gender include all genders.
(e) STATUTORY REFERENCES - A reference to a statute includes all
regulations made pursuant to such statute and, unless otherwise
specified, the provisions of any statute or regulation which amends,
supplements or supersedes any such statute or any such regulation.
(f) TIME PERIODS -Unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done shall
be calculated by excluding the day on which the period commences and
including the day on which the period ends and by extending the period
to the next Business Day following if the last day of the period is
not a Business Day.
(g) BUSINESS DAYS - If any payment is required to be made or other action
is required to be taken pursuant to this Agreement on a day which is
not a Business Day, then such payment or action shall be made or taken
on the next Business Day.
(h) INCLUDING - Where the word "including" or "includes" is used in this
Agreement, it means "including (or includes) without limitation".
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(i) NO STRICT CONSTRUCTION - The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against any party.
(j) SEVERABILITY - If, in any jurisdiction, any provision of this
Agreement or its application to any Party or circumstance is
restricted, prohibited or unenforceable, such provision shall, as to
such jurisdiction, be ineffective only to the extent of such
restriction, prohibition or unenforceability without invalidating the
remaining provisions of this Agreement and without affecting the
validity or enforceability of such provision in any other jurisdiction
or without affecting its application to other parties or
circumstances.
1.2 ENTIRE AGREEMENT
This Agreement and the Other Agreements together constitute the entire
agreement between the Parties and set out all the covenants, promises,
warranties, representations, conditions, understandings and agreements between
the Parties with respect to the subject matter of this Agreement and the Other
Agreements and supersede all prior understandings, agreements, negotiations and
discussions, whether oral or written.
1.3 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation hereby represents and warrants that, as at the date hereof:
(a) except for the registration and qualification rights provided for in
this Agreement, the Corporation is not under any obligation to
register or to qualify by filing a registration statement or
prospectus, nor has it agreed to grant registration or qualification
rights, with respect to any presently outstanding securities or
securities which may hereafter be issued, under the U.S. Securities
Legislation or under Canadian Securities Legislation, as applicable,
or the securities laws of any other jurisdiction; and
(b) it is not a party to any agreement which is inconsistent with the
rights and obligations of the Corporation hereunder or otherwise
conflicts with the provisions of this Agreement.
1.4 REVERSE TAKE-OVERS OR SIMILAR TRANSACTIONS
In the event that the Initial Public Offering is effected by the
distribution of securities in the capital of another Person which has been
formed or becomes an Affiliate of the Corporation for the purpose of taking the
business of the Corporation public (the "SUCCESSOR CORPORATION"): (i) references
in this Agreement to "the Corporation" shall be deemed to refer to the Successor
Corporation; (ii) references in this Agreement to the term "Registrable
Securities" shall be deemed to refer to the securities in the capital of the
Successor Corporation issued in exchange for the outstanding Registrable
Securities and/or issued as consideration for the sale or transfer by the
Corporation of all or substantially all of its assets; (iii) the Successor
Corporation shall become a party to this Agreement and assume all the
obligations of the Corporation under this Agreement;
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and (iv) all of the other terms and provisions of this Agreement shall apply
MUTATIS MUTANDIS to the Successor Corporation and to the Securities described in
clause (ii) above.
ARTICLE 2.
REGISTRATION RIGHTS
2.1 LONG FORM DEMAND REGISTRATIONS
(a) If, at any time after 180 days following the closing of the
Corporation's Initial Public Offering, the Corporation receives a
written request (a "LONG FORM DEMAND NOTICE") that the Corporation
effect the registration under the U.S. Securities Legislation (a "U.S.
REQUESTED REGISTRATION") or the qualification for distribution (a
"CANADIAN REQUESTED QUALIFICATION") under the applicable Canadian
Securities Legislation of the Canadian provinces or territories
designated in such request (the "DESIGNATED CANADIAN JURISDICTIONS")
of all or part of the Registrable Securities from a Holders Majority,
the Corporation shall, as soon as possible but in any event within 45
days of the receipt of the Long Form Demand Notice, file, with respect
to all of the Registrable Securities that the Corporation has been
requested to register (including Registrable Securities requested to
be included in such registration pursuant to clause (f) below), in the
event of a U.S. Requested Registration, a registration statement under
the U.S. Securities Act on Form S-1 or F-1 (or any successor to Form
S-1 or F-1), and, in the event of a Canadian Requested Qualification,
a prospectus under the Canadian Securities Legislation in each of the
Designated Canadian Jurisdictions on Form 41-501F1 pursuant to OSC
Rule 41-501 General Prospectus Requirements, and, subject to Section
2.9(c) hereof, shall use its best efforts to effect the registration
or qualification (including, without limitation, the execution of an
undertaking to file post-effective amendments and appropriate
qualification under applicable "blue sky" laws) under applicable
Securities Laws of all of such Registrable Securities as soon as
possible.
(b) Notwithstanding clause (a) above: (i) the Corporation shall not be
obligated to effect a Requested Registration pursuant to this
subsection during the 90 day period immediately following the
effective date of any previous Requested Registration pursuant to this
section; (ii) the Corporation shall not be obligated to effect more
than two Requested Registrations in any 12 month period; and (iii) the
Corporation shall not be obligated to effect a Requested Registration
pursuant to this subsection unless the anticipated aggregate offering
price of the Registrable Securities to be sold is at least
$10,000,000. Subject to all limitations in the preceding sentence, the
Corporation shall not be obligated to effect more than four Requested
Registrations during the term of this Agreement. For the purpose of
this clause (b), any concurrent U.S. Requested Registration and
Canadian Requested Qualification shall be deemed to be a single
Requested Registration only.
(c) Notwithstanding clause (a) above, (i) the Corporation shall not be
required to effect a Canadian Requested Qualification if the
Corporation has not previously been a "reporting issuer" of any
province of Canada; (ii) the Corporation shall not be
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required to effect a Canadian Requested Qualification if the
Corporation is then a "reporting issuer" in good standing in the
province of Ontario and each such Canadian Holder may then resell all
its Registrable Securities immediately under Rule 45-102 (or any
successor rule) without reliance upon any prospectus exemption under
applicable Canadian Securities Legislation in effect at such time; and
(iii) the Corporation shall not be required to effect a U.S. Requested
Registration if the Corporation has not previously effected an Initial
Public Offering in the United States.
(d) Notwithstanding clause (a) above, the Holders shall not be entitled to
deliver a Long Form Demand Notice requesting a U.S. Requested
Registration if the Corporation is then eligible to effect a U.S.
Short Form Registration pursuant to Section 2.2 hereof and the Holders
shall not be entitled to deliver a Long Form Demand Notice requesting
a Canadian Requested Qualification if the Corporation is then eligible
to effect a Canadian Short Form Qualification pursuant to Section 2.2
hereof.
(e) Subject to Section 2.7, the Corporation may include in such Requested
Registration other securities of the Corporation for sale, for the
Corporation's account or for the account of any other Person, if and
to the extent that the managing underwriter determines that the
inclusion of such additional shares will not interfere with the
orderly sale of all of the Registrable Securities of the participating
Holders at a price range acceptable to the requesting Holders.
(f) Upon receipt of a Long Form Demand Notice pursuant to this subsection,
the Corporation shall promptly give written notice of such request to
all Holders, and all Holders shall be afforded the opportunity to join
in such Requested Registration. Subject to Section 2.7 the Corporation
will be obligated to include in the Requested Registration such number
of Registrable Securities of any Holder joining in such request as are
specified in a written request by such Holder received by the
Corporation within 20 days after delivery to the Holder of such
written notice from the Corporation.
2.2 SHORT FORM REGISTRATIONS
(a) If at any time after 180 days following the closing of the
Corporation's Initial Public Offering in the United States, the
Corporation receives a written request from any Holder (a "SHORT FORM
DEMAND NOTICE") that the Corporation effect the registration of
Registrable Securities on Form S-3, Form F-3 or, if the Corporation
has prepared an underlying Canadian prospectus, Form F-10 (or any
successors to such forms) under the U.S. Securities Act (a "U.S. SHORT
FORM Registration"), or the comparable forms in respect of a Canadian
Short Form Qualification, the Corporation shall, with respect to all
of the Registrable Securities that the Corporation has been so
requested to register (including Registrable Securities requested to
be included in such registration pursuant to clause (d) below),
subject to Section 2.9(c) hereof, use its best efforts to effect such
registration (and all such related qualifications and compliances), as
soon as possible and in connection
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therewith shall take such other steps as are necessary to permit or
facilitate the sale and distribution of such Registrable Securities.
(b) Notwithstanding clause (a) above: (i) the Corporation shall not be
obligated to effect a Short Form Registration pursuant to this
subsection unless the anticipated aggregate offering price of the
Registrable Securities to be sold is at least $10,000,000; and (ii)
the Corporation shall not be obligated to effect a Short Form
Registration pursuant to this subsection if as applicable, Form S-3,
Form F-3 or Form F-10, or the comparable forms in respect of a
Canadian Short Form Qualification is not available for such an
offering, provided, that the Corporation shall use its commercially
reasonable efforts to so qualify as promptly as possible following its
Initial Public Offering in the United States for registration on Form
S-3, F-3 or F-10, or in Canada the comparable forms in respect of a
Canadian Short Form Qualification.
(c) Subject to Section 2.7, the Corporation may include in such Short Form
Registration other securities of the Corporation for sale, for the
Corporation's account or for the account of any other Person, if and
to the extent that the managing underwriter determines that the
inclusion of such additional shares will not interfere with the
orderly sale of all of the Registrable Securities of the participating
Holders at a price range acceptable to the requesting Holders.
(d) Upon receipt of a Short Form Demand Notice pursuant to this
subsection, the Corporation shall promptly give written notice of such
request to all Holders, and all Holders shall be afforded the
opportunity to join in such Short Form Registration. Subject to
Section 2.7, the Corporation shall be obligated to include in the
Short Form Registration such number of Registrable Securities of any
Holder joining in such request as are specified in a written request
by such Holder received by the Corporation within 20 days after
delivery to the Holder of such written notice from the Corporation.
(e) Subject to the foregoing provisions of this Section 2.2, the
Corporation shall file a Form S-3, F-3 or F-10 registration statement
or the comparable forms in respect of a Canadian Short Form
Qualification, covering the Registrable Securities requested to be
registered as soon as practicable after receipt of all written
requests from the Holders of Registrable Securities pursuant to this
Section 2.2, but in any event within sixty (60) days of the receipt by
the Corporation of the initial request for registration from the
Holder(s) pursuant to this Section 2.2.
2.3 INCIDENTAL REGISTRATIONS
If the Corporation for itself or for any of its security holders (other
than Holders) shall at any time or times after the date hereof determine, (i) to
register under the U.S. Securities Legislation any shares of its capital stock
or other securities (a "U.S. INCIDENTAL REGISTRATION") (other than: (A) the
registration of an offer, sale or other disposition of securities solely to
employees of, or other Persons providing services to, the Corporation, or any
direct or indirect subsidiary of the Corporation pursuant to an employee or
similar benefit plan; or (B) relating to a
13
merger, acquisition or other transaction of the type described in Rule 145 under
the U.S. Securities Act or a comparable or successor rule, registered on XXX
Xxxx X-0 or similar or successor forms), or (ii) to file a prospectus under any
Canadian Securities Legislation in order to qualify a distribution of securities
in its capital stock or in a form and manner that, with the appropriate changes,
would permit some or all of the Registrable Securities to be qualified for
distribution to the public under such prospectus (a "CANADIAN INCIDENTAL
QUALIFICATION") (other than in connection with any acquisition, securities
exchange offer, corporate reorganization, dividend reinvestment plan or stock
option or other employee benefit plan), the Corporation shall notify each Holder
of such determination at least 45 days prior to the filing of such registration
statement or prospectus, and upon the written request of any Holder given in
writing to the Corporation within 20 days after the receipt of such notice, the
Corporation shall, subject to Section 2.7, use its best efforts as soon as
practicable thereafter to cause any Registrable Securities specified in such
Holder's request to be included in such registration statement or prospectus to
the extent such registration or qualification is permissible under the
applicable Securities Laws and subject to the conditions of such applicable
Securities Laws.
2.4 U.S.-ONLY IPO
In the event that the Initial Public Offering is proposed to be made under
the U.S. Securities Act only without a simultaneous offering under Canadian
Securities Legislation, the Corporation shall, if requested by any member of the
Xxxxxxxx Group and if necessary in order to permit Holders to sell their
Registrable Securities in the United States free from resale restrictions under
Canadian Securities Legislation either as part of such Initial Public Offering
or immediately thereafter, concurrently with the Initial Public Offering use
best efforts to become a "reporting issuer" under the applicable Canadian
Securities Legislation of the Province of Ontario, and to take such other steps
(including applying for exemptive relief) as may be required such that the
Registrable Securities will be free from restricted periods, seasoning periods
or other restrictions on resale of such Registrable Securities under Canadian
Securities Legislation immediately on the closing of the Initial Public
Offering.
2.5 EXPENSES
Except to the extent otherwise required by law, the Corporation shall pay
all documented expenses incurred by it in complying with its obligations to the
Holders under this Agreement, including without limitation, the cost of
preparing any registration statement or prospectus, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Corporation, fees and expenses (including reasonable
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer fees of transfer agents and registrars, translation costs, costs of
insurance, and reasonable fees and disbursements of one counsel in Canada and
one counsel in the United States for the sellers of Registrable Securities, but
excluding underwriting discounts and commissions and transfer taxes applicable
to any sale of Registrable Securities.
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2.6 EFFECTIVE REGISTRATION STATEMENT
A Requested Registration, a Short Form Registration or an Incidental
Registration shall not be deemed to have been effected unless, with respect to a
U.S. Registration, the registration statement relating thereto has become and
remained effective with the SEC for the period required for the distribution of
all Registrable Securities included thereunder or, with respect to a Canadian
Qualification, a receipt (or its equivalent) for the (final) prospectus relating
thereto has been issued by the applicable Canadian Commission(s).
Notwithstanding the foregoing, a Requested Registration, a Short Form
Registration or an Incidental Registration will be deemed not to have been
effected or receipted if: (i) within 60 days after it has become effective with
the applicable Commission(s), such Requested Registration, Short Form
Registration or Incidental Registration is interfered with by any stop order,
cease trade order, injunction, or other order or requirement of the applicable
Commission(s) or other governmental agency or any court proceeding for any
reason other than a misrepresentation or omission by any Holder; or (ii) the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than solely by reason of some act or omission by a Holder.
2.7 PRIORITY IN REGISTRATION
(a) If a Requested Registration or Short Form Registration is a firm
underwritten registration or offering and the managing underwriters
give written advice to the Corporation of an Underwriter's Maximum
Number with respect to such Requested Registration or Short Form
Registration, which is less than the aggregate number (the "PROPOSED
INCLUDED SECURITIES") of the Registrable Securities requested for
inclusion by Holders, plus any securities of the Corporation that the
Corporation wishes to include for the Corporation's account or the
account of others ("ADDITIONAL REGISTRABLE SECURITIES"), then
Additional Registrable Securities shall be deducted from the Proposed
Included Securities but only to the extent necessary so that the
Proposed Included Securities (after such deduction) do not exceed the
Underwriter's Maximum Number; provided that if the Proposed Included
Securities (determined after deduction of the Additional Registrable
Securities, as aforesaid) still exceeds the Underwriter's Maximum
Number, then the Registrable Securities requested for inclusion by
Holders shall be included up to the Underwriter's Maximum Number
according to the following priority:
(i) Firstly, (A) Class 1 Registrable Securities held by the Class 1
Holders up to the product of the AC Value and the number of
outstanding Class 1 Shares held by such Class 1 Holders (the
"AGGREGATE AC VALUE"), (B) Registrable Securities held by the
Xxxxxxxx Group up to $50,000,000 aggregate amount less the gross
proceeds received in respect of prior sales of Registrable
Securities hereunder by the Xxxxxxxx Group (the "XXXXXXXX
PRIORITY ALLOCATION"), and (C) Registrable Securities held by the
EdgeStone Group as of the date hereof, allocated between the
Class 1 Holders, the Xxxxxxxx Group and the EdgeStone Group in
proportion as nearly as practicable to the Sharing Factor;
provided, however, that once the Xxxxxxxx Group has sold $50
million of Registrable Securities (whether
15
pursuant to a registration under this Agreement or otherwise),
Registrable Securities shall be allocated solely among the Class
1 Holders up to the Aggregate AC Value and the EdgeStone Group as
of the date hereof on a pro rata as-if-converted to Common Shares
basis; and
(ii) Secondly, any other Registrable Securities held by the Holders,
allocated in proportion as nearly as practicable to the
respective amount of Registrable Securities requested to be
included in such registration by the respective Holders.
(b) If an Incidental Registration is a firm underwritten registration or
offering initiated by the Corporation, and the managing underwriters
give written advice to the Corporation of an Underwriter's Maximum
Number with respect to such Incidental Registration, then: (i) the
Corporation shall be entitled to include in such registration or
offering that number of securities which the Corporation proposes to
offer and sell for its own account in such registration or offering
and which does not exceed the Underwriter's Maximum Number; and (ii)
the Corporation shall be obligated and required to include in such
registration or offering that number of Registrable Securities which
shall have been requested by Holders which does not exceed the
difference between the Underwriter's Maximum Number and that number of
securities which the Corporation is entitled to include therein
pursuant to clause (i) of this subsection and if it shall be necessary
to cut back the number of Registrable Securities requested to be
included therein by Holders, then the Registrable Securities requested
to be included by Holders shall be included up to the Underwriter's
Maximum according to the following priority:
(i) Firstly, (A) Class 1 Registrable Securities held by the Class 1
Holders up to the Aggregate AC Value, (B) Registrable Securities
held by the Xxxxxxxx Group up to the Xxxxxxxx Priority
Allocation, and (C) Registrable Securities held by the Edgestone
Group as of the date hereof, allocated between the Class 1
Holders, the Xxxxxxxx Group and the EdgeStone Group in proportion
as nearly as practicable to the Sharing Factor; provided,
however, that once the Xxxxxxxx Group has sold $50 million of
Registrable Securities (whether pursuant to a registration under
this Agreement or otherwise), Registrable Securities shall be
allocated solely among the Class 1 Holders up to the Aggregate AC
Value and the EdgeStone Group on a pro-rata as-if converted to
Common Shares basis; and
(ii) Secondly, any other Registrable Securities held by the Holders,
allocated in proportion as nearly as practicable to the
respective amount of Registrable Securities requested to be
included in such registration by the respective Holders.
(c) Notwithstanding that the Corporation will not be subject to any cut
back on an Incidental Registration with respect to securities to be
sold for its own account, it will in good faith consider the inclusion
of a secondary offering component therein
16
and if there is an over-allotment option granted to the underwriters
in connection with an Incidental Registration, the Corporation will in
good faith negotiate with the underwriters to allow a reasonable
portion of the over-allotment option to be fulfilled by the Holders in
accordance with the priority of the Holders set forth in paragraph (b)
above, subject to the advice of the lead underwriter.
(d) For the avoidance of doubt, allocations in this Section 2.7 among the
Class 1 Holders shall be allocated in proportion, as nearly as
practicable to the respective amount of Class 1 Registrable Securities
requested to be included in the applicable registration by the Class 1
Holders.
2.8 DELAY LIMITATION
Notwithstanding any other provision of this Agreement, the Corporation
shall have the right to delay any registration of Registrable Securities
requested pursuant to those provisions for up to 45 consecutive days if such
registration would, in the good faith judgment of the Board of Directors,
substantially interfere with any material transaction being considered at the
time of receipt of the request from the Holders or would require the disclosure
of material information, the premature disclosure of which would materially
adversely affect the Corporation, and at the expiry of such 45 consecutive day
period the Board of Directors will review whether such registration would, in
the good faith judgment of the Board of Directors, substantially interfere with
the proposed transaction or materially adversely affect the Corporation in which
case the Board of Directors may delay such registration for an additional 30
consecutive days; provided, however, that the Corporation shall not be permitted
to utilize its delay rights under this Section 2.8 for more than 90 days in
total in any twelve month period.
2.9 OFFERING PROCEDURE OBLIGATIONS
In connection with any offering of Registrable Securities pursuant to this
Agreement, the Corporation shall:
(a) in the case of a U.S. Registration, (1) cause each registration
statement to become and remain effective for a period of 90 days or
until the Holder or Holders have completed the distribution described
in such registration statement, whichever first occurs or, in the case
of an underwritten public offering, until each underwriter has
completed the distribution of all securities purchased by it;
provided, however, that: (i) such 90 day period shall be extended for
a period of time equal to the period the Holder refrains from selling
any securities included in such registration at the request of an
underwriter; and (ii) in the case of any registration of Registrable
Securities on Form S-3 or F-3 which are intended to be offered on a
continuous or delayed basis, such 90 day period shall be extended, if
necessary, to keep the Registration Statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any
successor rule under the U. S. Securities Act, permits an offering on
a continuous or delayed basis, and provided further that applicable
rules under the U.S. Securities Act governing the obligation to file a
post effective amendment permit, in lieu of filing a post effective
amendment that (I) includes any prospectus required by Section
10(a)(3) of the U.S. Securities Act or
17
(II) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in
(I) and (II) above contained in periodic reports filed pursuant to
Section 13 or 15(d) of the U.S. Exchange Act in the registration
statement; (2) prepare and file with the SEC such amendments and
supplements to such registration statement as may be necessary to keep
such registration statement effective for the period specified in
paragraph (1) above and comply with the provisions of the U.S.
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement in accordance with
the Holders' intended method of disposition for such period; (3)
immediately notify each selling Holder and each underwriter under such
registration statement, at any time when a prospectus relating thereto
is required to be delivered under the U.S. Securities Act, of the
happening of any event of which the Corporation has knowledge as a
result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances; (4) advise each selling Holder, promptly
after it shall obtain knowledge thereof, of the issuance of any stop
order by the SEC or other securities authority suspending the
effectiveness of such registration statement and promptly use all
reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued; and (5)
permit any selling Holder who, in the sole and exclusive judgment,
exercised in good faith, of such Holder, might be deemed to be a
controlling Person of the Corporation, to participate in good faith in
the preparation of such registration statement and to require the
insertion therein of material furnished to the Corporation in writing,
which in the reasonable judgment of such Holder and its counsel should
be included, subject to review by the Corporation and its counsel
after consultation with such Holder;
(b) furnish to each of the Holders requesting registration or
qualification such number of copies of any prospectus (including any
preliminary prospectus) or registration statement and prospectus or
registration statement supplement or amendment as they may reasonably
request in order to effect the offering and sale of Registrable
Securities to be offered and sold, but only while the Corporation
shall be required under the provisions of this Agreement to cause the
registration statement or prospectus to remain current; and
(c) take such action in fulfillment of its obligations under this
Agreement as shall be necessary to qualify the securities covered by
such registration under such blue sky or other U.S. state securities
legislation or Canadian Securities Legislation for offers and sales as
such Holder may reasonably request, subject to the limitations herein;
provided, however, that the Corporation shall not be obligated to (i)
qualify as a foreign corporation to do business under the laws of any
jurisdiction in which it shall not be then qualified or to file any
general consent to service of process or (ii) file a prospectus or
registration statement in any jurisdiction where it has not previously
filed a prospectus or registration statement (except as contemplated
by Section 2.4).
18
If requested in connection with an offering in accordance with Section 2.1
or 2.2 of this Agreement, the Corporation and requesting Holders shall enter
into an underwriting agreement with a nationally recognized investment banking
firm or firms selected by the Board of Directors and acceptable to a majority in
interest of the Holders requesting the registration or qualification of their
Registrable Securities containing representations, warranties, indemnities and
agreements then customarily included by an issuer in underwriting agreements of
that type. In connection with any offering of Registrable Securities registered
pursuant to this Agreement, the Corporation shall, subject to applicable law,
(i) furnish each of the Holders requesting the registration of its Registrable
Securities, at the Corporation's expense, with unlegended certificates
representing ownership of the Registrable Securities being sold, in such
denominations as such Holders request; (ii) instruct the Corporation's transfer
agent and registrar to release any stop transfer orders with respect to the
Registrable Securities being sold; and (iii) use its best efforts to list such
Registrable Securities an each stock exchange on which the shares or other
securities of the Corporation are listed.
The Corporation may require each Holder of Registrable Securities to be
sold pursuant to this Agreement to furnish the Corporation with such information
and undertakings as it may reasonably request regarding such Holder and the
distribution of such securities as the Corporation may from time to time
reasonably request in writing.
2.10 RULE 144
With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Registrable
Securities to the public without registration, at all times after 90 days after
any registration statement covering a public offering of securities of the
Corporation under the U.S. Securities Act shall have become effective, the
Corporation agrees to:
(a) use its commercially reasonable efforts to make and keep public
information available, as those terms are understood and defined in
Rule l44 under the U.S. Securities Act;
(b) use its commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required of the
Corporation under the U.S. Securities Act and the U. S. Exchange Act;
and
(c) furnish to each Holder forthwith upon request a written statement by
the Corporation as to its compliance with the reporting requirements
of such Rule 144 and of the U.S. Securities Act and the U.S. Exchange
Act, a copy of the most recent annual or quarterly report of the
Corporation, and such other reports and documents so filed by the
Corporation as such Holder may reasonably request in availing itself
of any rule or regulation of the SEC allowing such Holder to sell any
Registrable Securities without registration.
2.11 INDEMNIFICATION
(a) In the event of any registration or qualification of Registrable
Securities pursuant to this Agreement, the Corporation shall hold
harmless and indemnify each of the
19
Holders and their respective officers, directors, partners, employees,
members, advisors and agents and their respective affiliates and each
other Person, if any, who controls any of the foregoing Persons, if
any, from and against any losses (other than loss of profits), claims,
damages or liabilities to which any of them may be subject under any
applicable Securities Laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under which such Registrable Securities were registered, or any
document incidental to the registration or sale of such Registrable
Securities, or which arise out of or are based upon the omission or
alleged omission to state therein any material fact required to be
stated therein or necessary to make the statement not misleading, (ii)
an untrue statement or allegedly untrue statement of a material fact
in any prospectus, preliminary prospectus or any issuer free writing
prospectus relating to the Registrable Securities or omission or
alleged omission to state a material fact, necessary to make the
statements therein in light of the circumstances under which they were
made not misleading (iii) any violation by the Corporation of any
applicable Securities Laws relating to action or inaction required by
the Corporation in connection with such registration or sale under
such Securities Laws; provided, however, that the Corporation will not
be liable in any case to any given Holder to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any such prospectus, registration statement or
document in reliance upon and in conformity with information furnished
in writing to the Corporation by or on behalf of such Holder
specifically for use therein. This indemnity shall be in addition to
any liability the Corporation may otherwise have. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of such Holder or any director or officer, or
controlling Person of such Holder and shall survive the transfer of
such securities by such Holder.
(b) In the event of any registration or qualification of Registrable
Securities pursuant to this Agreement, each of the Holders for whom
such registration or qualification of Registrable Securities has been
made agrees, in the same manner and to the same extent as set forth in
subsection (a) of this section, to severally and not jointly (and not
jointly and severally) indemnify and hold harmless the Corporation,
each of the other Holders and all of their respective officers,
directors, partners, employees and agents, if any, from and against
any losses (other than loss of profits), claims, damages or
liabilities to which any of them may be subject under any applicable
Securities Laws or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact relating to information furnished in writing to the
Corporation by or on behalf of such Holder specifically for use in, or
any untrue statement or alleged untrue statement of any material fact
contained in any prospectus or registration statement under which such
Registrable Securities were distributed, or any document incidental to
the registration, qualification or sale of such Registrable
Securities, or which arise out of or are based upon the
20
omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statement not
misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the
Corporation by or on behalf of such Holder specifically for use in
such registration statement or prospectus, or (ii) any violation by
such Holder of any applicable Securities Laws; provided, however, that
the liability of each Holder hereunder shall be limited to the
proportion of any such loss, claim, damage or liability which is equal
to the proportion that the public offering price of the shares sold by
such Holder under such registration statement or prospectus bears to
the total public offering price of all securities sold thereunder, but
not in any event to exceed the net proceeds received by such Holder
from the sale of Registrable Securities covered by such registration
statement or prospectus.
(c) Each of the Parties entitled to indemnification pursuant to this
Section (each, an "INDEMNIFIED PARTY") shall, promptly after receipt
of notice of the commencement of any action against such Indemnified
Party in respect of which indemnity may be sought pursuant to this
section, notify the indemnifying party in writing of the commencement
thereof. The omission of any Indemnified Party so to notify an
indemnifying party of any such action shall not relieve the
indemnifying party from any liability which it may have to such
Indemnified Party on account of the indemnity pursuant to this
section, unless (and only to the extent that) the indemnifying party
was prejudiced by such omission, and in no event shall relieve the
indemnifying party from any other liability which it may have to such
Indemnified Party. In case any such action shall be brought against an
Indemnified Party and it shall notify an indemnifying party of the
commencement thereof the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified
Party, and after notice from the indemnifying party to such
Indemnified Party of its election so to assume the defense thereof the
indemnifying party shall not be liable to such Indemnified Party under
this section for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided, ----------- however,
that if any Indemnified Party shall have reasonably concluded that
there may be one or ------- more legal or equitable defenses available
to such Indemnified Party which are additional to or conflict with
those available to the indemnifying party, or that such claim or
litigation involves or could have an effect upon matters beyond the
scope of the indemnity agreement provided hereunder, the indemnifying
party shall not have the right to assume the defense of such action on
behalf of such Indemnified Party (but shall have the right to
participate therein with counsel of its choice) and such indemnifying
party shall reimburse such Indemnified Party and any Person
controlling such Indemnified Party for that portion of the fees and
expenses of any counsel retained by the Indemnified Party which is
reasonably related to the matters covered by the indemnity agreement
provided hereunder. No admission of liability shall be made by the
Indemnified Party without the consent of the indemnifying party. If,
after having been notified by the Indemnified Party of the
commencement of any action against such Indemnified Party in respect
of which
21
indemnity may be sought, the indemnifying party fails to assume the
defense of such suit on behalf of the Indemnified Party within 10 days
of receiving notice thereof, the Indemnified Party shall have the
right to employ counsel in respect of the defense of such suit and the
fees and expenses of such counsel shall be at the expense of the
indemnifying party.
(d) If the indemnification provided for in this Section 2.11 is held by a
court of competent jurisdiction to be otherwise available in
accordance with its terms but is, for any reason, held to be
unavailable or unenforceable by an Indemnified Party with respect to
any losses, claims, damages or liabilities referred to herein, then
the indemnifying party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage
or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the Indemnified Party
is determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
indemnifying party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
2.12 SUPERIOR REGISTRATION OR QUALIFICATION RIGHTS
The Corporation shall not grant or agree to grant any registration or
qualification or other similar rights more favorable than or on parity with, or
inconsistent with, any of the rights contained herein, or any other rights that
would result in a reduction of the number of Registrable Securities includable
in any registration statement or prospectus filed under this Agreement, all so
long as any of the registration or qualification rights under this Agreement
remain in effect, unless the Corporation obtains the prior written consent of a
Holders Majority, and, in the event that any of the above actions affects any
Holder in a manner that is materially and adversely disproportionate from the
manner in which such action affects any other Holder or group of Holders, the
Corporation obtains the prior written consent of each such Holder who is
disproportionately affected.
2.13 LOCK-UP AGREEMENT
Each of the Holders hereby agrees not to sell or otherwise dispose of any
Registrable Securities or other equity securities of the Corporation (except the
Registrable Securities, if any, sold (i) pursuant to a public offering, or (ii)
to a Permitted Transferee and except as permitted by any exceptions to this
restriction granted by the lead underwriter(s) in the sole discretion of the
lead underwriter(s)) for a period of up to 180 days (or such lesser period as
the lead underwriter(s) of such Qualified IPO may agree) following the earlier
of:
(i) the effective date of the registration statement, or
22
(ii) the date of receipt for a final prospectus
in respect of a Qualified IPO, without the prior written consent of the lead
underwriter(s) of such Qualified IPO, such consent not to be unreasonably
withheld or delayed; PROVIDED, HOWEVER, that, subject to advice from the lead
underwriter(s), all Persons entitled to registration rights with respect to
shares of the Corporation's capital stock who are not parties to this Agreement,
all other Persons selling shares in such offering, all Persons holding in excess
of 1% of the capital stock of the Corporation on a fully diluted basis and all
executive officers and directors of the Corporation shall also have agreed not
to sell publicly their shares under the circumstances and pursuant to the terms
set forth in this Section 2.13 (and for a period not less than the lock-up
period applicable to the Holders); and PROVIDED, FURTHER, HOWEVER, that if the
lead underwriter releases any shares from the lock-up with respect to such
offering prior to the scheduled expiration date, the lead underwriter shall
contemporaneously release A PRO RATA portion of the Registrable Securities from
such lock-up.
ARTICLE 3.
GENERAL
3.1 TERM
The registration and qualification obligations of the Corporation pursuant
to this Agreement shall terminate, with respect to any Holder, on the earlier
of:
(a) for the purposes of any obligation of the Corporation hereunder to
effect a U.S. Registration for the benefit of such Holder, the first
to occur of: (i) the date that all Registrable Securities held by such
Holder may be sold pursuant to Rule 144 under the U.S. Securities Act
if the Holder is able to sell under Rule 144(k); and (ii) if the only
public market for the Common Shares is a stock exchange in Canada, the
date that all Registrable Securities held by such Holder may be sold
to the public on such Canadian exchange without registration under the
U.S. Securities Act.
(b) for the purposes of any obligation of the Corporation hereunder to
effect a Canadian Qualification for the benefit of such Holder, the
first to occur of: (i) the date that all Registrable Securities held
by such Holder are qualified pursuant to a prospectus under Canadian
Securities Laws; and (ii) the date that all Registrable Securities
held by such Holder may be sold under Rule 45-102 (or any successor
rule) without a prospectus or reliance on a prospectus exemption under
applicable Canadian Securities Legislation;
(c) the date that all of the Registrable Securities held by such Holder
are sold in a private transaction in which the transferor's rights
under this Agreement are not assigned pursuant to Section 3.4 hereof;
and
(d) the date that is 5 years following the date of a Qualified IPO
23
3.2 TERMINATION NOT TO EFFECT RIGHTS OR OBLIGATIONS
A termination of this Agreement or any provision of this Agreement shall
not affect or prejudice any rights or obligations which have accrued or arisen
under this Agreement prior to the time of termination (including, without
limitation, any rights to indemnification or contribution pursuant to Section
2.11), and such rights and obligations shall survive the termination of this
Agreement.
3.3 CHANGES IN REGISTRABLE SECURITIES
If and as often as, there is any change in the Registrable Securities by
way of reclassification or exchange, or through a merger, amalgamation,
consolidation or capital reorganization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Registrable
Securities as so changed.
3.4 ASSIGNMENT
All covenants and agreements contained in this Agreement by or on behalf of
any of the Parties hereto shall bind and enure to the benefit of the respective
successors and assigns of the Parties hereto (including without limitation
transferees of any Registrable Securities), whether so expressed or not,
provided, however, that registration and qualification rights conferred herein
shall only enure to the benefit of a transferee of Registrable Securities (and
transferees of such transferees) if:
(a) there is transferred to such transferee at least 10% of the
Registrable Securities held by the Holder on the date hereof; or
(b) such transferee (or transferee of such transferee) is a Permitted
Transferee of the Holder.
Each Permitted Transferee hereunder shall execute a counterpart of and
become a party to this Agreement and shall be deemed to be a "Holder" (and if a
Permitted Transferee of a Class 1 Holder a "Class 1 Holder") for all purposes.
Each Holder shall notify the Corporation of each such transfer as soon as
practicable and, in any event, no later than ten (10) Business Days after such
transfer.
3.5 FURTHER ASSURANCES
The Corporation and each of the Holders covenants and agrees to take all
other necessary or desirable action within its control and to the extent
permitted by law so as to give full effect to the provisions of this Agreement.
3.6 NOTICES
All notices, requests, payments, instructions or other documents to be
given hereunder will be in writing or by written telecommunication, and will be
deemed to have been duly given if (i) delivered personally (effective upon
delivery), (ii) mailed by certified mail, return receipt
24
requested; postage prepaid (effective five Business Days after dispatch), (iii)
sent by a reputable, established courier service that guarantees next Business
Day delivery (effective the next Business Day), or sent by air mail or by
commercial express overseas air courier, with receipt acknowledged in writing by
the recipient (effective upon the date of such acknowledgement), or (iv) sent by
telecopier or electronic mail followed within 24 hours by confirmation by one of
the foregoing methods (effective upon receipt of the telecopy in complete,
readable form), addressed as follows (or to such other address as the recipient
party may have furnished to the sending party for the purpose pursuant to this
Section 3.6):
if to the Corporation to:
Mitel Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, XX XXX 0X0
Attention: Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
--------------
Mitel Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: Chief Financial Officer, and VP Finance
Fax: (000) 000-0000
And with a copy to:
------------------
Mitel Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: Senior Corporate Counsel
Fax: (000) 000-0000
And with a copy to:
------------------
Osler, Xxxxxx & Xxxxxxxx XXX
Xxxxx 0000
00 X'Xxxxxx Xxxxxx
Xxxxxx, XX X0X 0X0
Attention: J. Xxxxx Xxxxxx
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxx.xxx
25
if to Francisco Partners:
Arsenal Holdco I, S.a.r.l. and Arsenal Holdco II, S.a.r.l.
0-00 xxx Xxxxxxx Xxxxx
X-0000 Xxxxxxxxxx
with copies to:
Francisco Partners II., L.P., GP, LLC
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxx
Facsimile: (000) 000-0000
E-mail: xxxx@xxxxxxxxxxxxxxxxx.xxx
and
O'Melveny & Xxxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxxxx@xxx.xxx
if to MS Investors:
c/o Morgan Xxxxxxx Principal Investments, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx XX
Facsimile: (000) 000-0000
E-mail: xxx.xxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
XxXxxxxxx Will & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Older and
Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
E-mail: xxxxxx@xxx.xxx
xxxxxxxxx@xxx.xxx
if to Xxxxxxxx, CTJL or WCC:
26
c/o Xxxxxx Xxxxxx Corporation
000 Xxxxxxx Xxxxx
Xxxxx X, Xxxxx 000
Xxxxxx, Xxxxxxx X0X 0X0
Attn: Dr. T.H. Xxxxxxxx and Xxxx Xxxxxxxx
Fax: (000) 000-0000
And with a copy to:
------------------
Xxxxxx Xxxxxx Gervais LLP
World Exchange Plaza
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX X0X 0X0
Attention: Xxxxxx Xxxx
Fax: (000) 000-0000
E-mail: xxxxx@xxxxxxxxx.xxx
if to EdgeStone:
EdgeStone Capital Equity Fund II Nominee, Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx
Fax: (000) 000-0000
Fax: (000) 000-0000
3.7 WAIVERS, AMENDMENTS
Except as otherwise expressly provided in this Agreement and without
limiting the applicability of the following sentence, no amendment, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. Any amendment or waiver of this Agreement or any
provision hereof shall be binding on all Parties, and each party shall sign any
documents amending, waiving or terminating this Agreement or a provision of this
Agreement, if such document has been consented to in writing (whether signed in
one or more counterparts) by the Corporation and a Holders Majority; provided,
however, if the Francisco Partners Group does not hold 50% or more of the Class
1 Registrable Securities (calculated on an as-if converted to Common Shares
basis) held by the Class 1 Holders and their Permitted Transferees, consent
shall be required by the Corporation and each other Holder of not less than 10%
of the Registrable Securities held by the Class 1 Holders and their Permitted
Transferees (calculated on an as-if converted to Common Shares basis and
adjusted for share splits, consolidations and the like); and, provided, further,
that in the event of an amendment or waiver
27
affecting any Holder in a manner that is materially and adversely
disproportionate from the manner in which such amendment or waiver affects any
other Holder or group of Holders, the waiver and amendment shall require the
consent in writing of each such Holder who is disproportionately affected;
provided, further, however, that any amendment of this Section 3.7 shall require
the consent in writing of each Holder. Except as set forth in this Agreement, no
amendment or waiver of any provision of this Agreement shall constitute or be
deemed to constitute a waiver of any other provision nor shall any such waiver
constitute a continuing waiver.
3.8 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original and such counterparts together shall
be but one and the same instrument. Each party agrees that the delivery of this
Agreement by facsimile shall have the same force and effect as delivery of
original signatures.
3.9 EQUITABLE RELIEF
Each of the Parties acknowledges that any breach by such party of his, her,
or its obligations under this Agreement would cause substantial and irreparable
damage to one or more of the other Parties and that money damages would be an
inadequate remedy therefor. Accordingly, each party agrees that the other
Parties or any of them will be entitled to an injunction, specific performance,
and/or other equitable relief to prevent the breach of such obligations.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
28
IN WITNESS WHEREOF, each of the Parties has executed this Registration
Rights Agreement on and as of the date first above written.
MITEL NETWORKS CORPORATION
By:
----------------------------------
Name:
Title:
ARSENAL HOLDCO I, S.A.R.L.
By:
----------------------------------
Name:
Title:
ARSENAL HOLDCO II, S.A.R.L.
By:
----------------------------------
Name:
Title:
XXXXXX XXXXXXX PRINCIPAL INVESTMENTS, INC.
By:
----------------------------------
Name:
Title:
XXXXXX XXXXXX CORPORATION
By:
----------------------------------
Name:
Title:
29
CELTIC TECH JET LIMITED
By:
----------------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX
----------------------------------
EDGESTONE CAPITAL EQUITY FUND II-B GP, INC., AS AGENT FOR
EDGESTONE CAPITAL EQUITY FUND II-A, L.P. AND ITS PARALLEL
INVESTORS
By:
----------------------------------
Name:
Title:
EDGESTONE CAPITAL EQUITY FUND II NOMINEE, INC., AS NOMINEE
FOR EDGESTONE CAPITAL EQUITY FUND II-A, L.P. AND ITS
PARALLEL INVESTORS
By:
----------------------------------
Name:
Title:
SCHEDULE A
----------
--------------------------------------------------------------------------------
Name of Holder No. of Registrable Securities
--------------------------------------------------------------------------------
Arsenal Holdco I, S.a.r.l. 205,819 Class 1 Shares and 15,596,446 Warrants
--------------------------------------------------------------------------------
Arsenal Holdco II, S.a.r.l. 13,928 Class 1 Shares and 1,055,429 Warrants
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 43,340 Class 1 Shares; 3,284,196 Warrants
--------------------------------------------------------------------------------
EdgeStone 19,000 Class 1 Shares, 5,000,000 Common Shares
upon exercise of Series 1 Warrants and
5,359,893 Common Shares
--------------------------------------------------------------------------------
WCC 158,790,234 Common Shares
--------------------------------------------------------------------------------
CTJL 4,555,169 Common Shares
--------------------------------------------------------------------------------
Xxxxxxxx 13,500 Class 1 Shares, 1,022,996 Warrants, and
Stock Options to acquire 297,488 Common Shares
--------------------------------------------------------------------------------
