EXHIBIT 4.17
AMENDMENT TO REGISTRATION AGREEMENT
THIS AMENDMENT TO REGISTRATION AGREEMENT (this "Amendment") is made as
of April 4, 2003, by and between EpicEdge, Inc., a Texas corporation (the
"Company"), and Edgewater Private Equity Fund III, L.P., a Delaware limited
partnership ("Edgewater").
WHEREAS, pursuant to a Stock Purchase Agreement dated as of February
18, 2000, as the same may be amended, modified or restated from time to time
(the "February Purchase Agreement"), by and among the Company, Edgewater and
certain other parties named therein (collectively, the "February Investors"),
the February Investors purchased shares of the Company's Common Stock, $0.01 par
value per share (the "Common Stock");
WHEREAS, pursuant to a Stock Purchase Agreement dated as of September
29, 2000, as the same may be amended, modified or restated from time to time
(the "September Purchase Agreement"), by and among the Company, Edgewater and
certain other parties named therein (collectively, the "September Investors"),
the September Investors purchased shares of Common Stock;
WHEREAS, pursuant to a Substitute Convertible Secured Promissory Note
of even date herewith in the principal amount of $2,000,000, as the same may be
amended, modified or restated from time to time (the "Note"), by and among the
Company and Edgewater, and subject to the terms and conditions contained
therein, Edgewater may at its option convert the outstanding principal balance
of the Note and the accrued but unpaid interest thereon into shares of Series
B-1 Convertible Preferred Stock, $0.01 par value per share, of the Company (the
"Series B-1 Preferred Stock");
WHEREAS, pursuant to the terms of the Note, on the date hereof the
Company will issue to Edgewater a Warrant to purchase 1,333,333 shares of Series
B-1 Preferred Stock and a Warrant to purchase 200,000 shares of Series B-1
Preferred Stock (the "Warrants");
WHEREAS, in order to induce the February Investors to enter into the
February Purchase Agreement, the Company agreed to provide certain registration
rights to such February Investors pursuant to that certain Registration Rights
Agreement dated as of February 18, 2000 (as the same may be amended, restated or
otherwise modified from time to time, the "February Registration Agreement"), by
and among the Company and the February Investors;
WHEREAS, in order to induce the September Investors to enter into the
September Purchase Agreement, the Company agreed to provide certain registration
rights to such September Investors pursuant to that certain Registration Rights
Agreement dated as of September 29, 2000 (as the same may be amended, restated
or otherwise modified from time to time, the "September Registration Agreement";
and, together with the February Registration Agreement, the "Prior Registration
Agreements"), by and among the Company and the September Investors;
WHEREAS, in order to induce Edgewater to enter into the Note, the
Company has agreed to provide certain registration rights to Edgewater with
respect to the shares of Series B-1
Preferred Stock that it may acquire thereunder and under the Warrants on the
terms set forth in this Amendment;
WHEREAS, pursuant to Section 10(d) of the February Registration
Agreement and the operative paragraph in the September Registration Agreement
which incorporates all of the terms of the February Registration Agreement
therein, the Prior Registration Agreements may be amended by the Company and the
holders of a majority of the Series A Preferred Stock and the holders of a
majority of the Series B Preferred Stock (collectively, the "Required Holders");
and
WHEREAS, in order to provide Edgewater with certain registration rights
with respect to the Series B-1 Preferred Stock, the Company and the Required
Holders wish to amend the Prior Registration Agreements pursuant to the terms
set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements herein contained and for the purposes of setting forth the terms and
conditions of this Amendment, the parties, intending to be bound, hereby agree
as follows:
1. Incorporation of the Agreement. All capitalized terms which
are not defined hereunder shall have the same meanings as set forth in the Prior
Registration Agreements. To the extent any terms and provisions of the Prior
Registration Agreements are inconsistent with the amendments set forth in
Paragraph 2 below, such terms and provisions shall be deemed superseded hereby.
Except as specifically set forth herein, the Prior Registration Agreements shall
remain in full force and effect and their provisions shall be binding on the
parties hereto.
2. Amendments to the Prior Registration Agreements.
(a) Section 1 of the February Registration Agreement is
hereby amended and restated in its entirety as follows:
1. Demand Registrations.
(a) Requests for Registration. Upon written
request by the holders of a majority of the Series A Preferred
Stock and the related Conversion Securities, the holders of a
majority of the Series B Preferred Stock and the related
Conversion Securities or the holders of a majority of the
Series B-1 Preferred Stock and the related Conversion
Securities (the "Notice"), the Company shall (i) file as soon
as practicable after receipt of such Notice, but in no event
later than thirty (30) days after the receipt therefor with
respect to a Short-Form Registration (as defined below) or
forty-five (45) days after the receipt therefor with respect
to a Long-Form Registration (as defined below), a Registration
Statement (the "Demand Registration") covering all of the
Registrable Securities, and (ii) take all necessary actions to
cause such registration statement to become effective within
thirty (30) days of filing or as soon thereafter as is
permissible by the Securities and Exchange Commission. Each
request for a Demand Registration shall specify the
approximate number of Registrable
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Securities requested to be registered and the anticipated per
share price range for such offering. Within ten (10) days
after receipt of any request for a Demand Registration, the
Company will give written notice of such requested
registration to all other holders of Registrable Securities
and, subject to paragraph 1(b) below, will include in such
registration all Registrable Securities with respect to which
the Company has received written requests for inclusion
therein within fifteen (15) days after receipt of the
Company's notice. The holders of Registrable Securities shall
be entitled to request (x) one (1) Demand Registration
annually on Form S-1 or any similar long-form registration (a
"Long-Form Registration"), and (y) two (2) Demand Registration
on Form S-3 (or any successor form) (a "Short-Form
Registration") annually, if available, in each case in which
the Company will pay all Registration Expenses.
(b) Priority on Demand Registrations. The
Company will not include in any Demand Registration any
securities which are not Registrable Securities without the
prior written consent of the holders of a majority of the
Registrable Securities. If a Demand Registration is an
underwritten offering and the managing underwriters advise the
Company in writing (with a copy to each party hereto
requesting registration of Registrable Securities) that in
their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included
in such offering exceeds the number of Registrable Securities
and other securities, if any, which can be sold therein
without adversely affecting the marketability of the offering,
the Company will include in such registration, prior to the
inclusion of any securities which are not Registrable
Securities, (i) first, the Conversion Securities requested to
be included therein by the Series A Holders, the Series B
Holders and the Series B-1 Holders, pro rata among such
holders on the basis of the number of shares that each holder
has requested to be included in such registration, and (ii)
second, the number of Registrable Securities requested to be
included by the other Investors, pro rata among the respective
holders thereof on the basis of the number of shares of
Registrable Securities that each such holder has requested to
be included in such registration.
(c) Selection of Underwriters. The holders of a
majority of the Registrable Securities who request or elect to
be included in the Demand Registration and the Company shall
jointly select the investment banker(s) and managing
underwriter(s) to administer an offering initiated as a Demand
Registration. It is understood and agreed that the Company may
delay the registration of Registrable Securities hereunder if
such
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delay is requested in writing by such managing underwriter(s)
or by any managing underwriter(s) jointly selected by such
holders of a majority of the Registrable Securities and the
Company with respect to any offering of equity securities by
the Company.
(d) Other Registration Rights. The Company will
not grant to any Person the right to request the Company to
register any equity securities of the Company, or any
securities convertible or exchangeable into or exercisable for
such securities, which would be superior to or otherwise
interfere with the Investors' registration rights hereunder;
provided, however, the granting by the Company of registration
rights to any other Person which would in any way limit the
Investors' registration rights hereunder shall be subject to
the approval of the Purchaser Representatives (as defined in
the Preferred Purchase Agreement). The Company represents and
warrants to the Investors that no Person has the right to
register any equity securities of the Company which are
superior to or would otherwise interfere with the Investors'
registration rights hereunder except for the Persons and
corresponding number of shares of Common Stock identified on
Schedule A attached hereto and made a part hereof, whose
registration rights are pari passu (but not superior) to those
of the Investors (the registrable equity securities held by
such Persons are referred to herein as the "Equal
Securities").
(b) Section 2(c) of the February Registration Agreement
is hereby amended and restated in its entirety as follows:
(c) Priority on Primary Registrations.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing
underwriters advise the Company in writing (with a copy to
each party hereto requesting registration of Registrable
Securities) that in their opinion the number of securities
requested to be included in such registration exceeds the
number which can be sold in such offering without adversely
affecting the marketability of such offering, the Company will
include in such registration (i) first, the securities the
Company proposes to sell, (ii) second, the Conversion
Securities requested to be included in such registration by
the Series A Holders, the Series B Holders and the Series B-1
Holders, pro rata among the holders of such Registrable
Securities on the basis of the number of shares that each such
holder has requested to be included in such registration and
(iii) third, the other Registrable Securities requested to be
included in such registration and the Equal Securities
requested to be included in such registration, pro rata among
the holders of such Registrable Securities and such Equal
Securities on the basis of the number of
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shares that each such holder has requested to be included in
such registration. If, after giving effect to the inclusion in
the applicable registration of the equity securities referred
to in clauses (i), (ii) and (iii) above, there are additional
equity securities of the Company available to be included in
such registration, the Company shall be entitled to designate
the Persons, if any, it would submit to the managing
underwriter(s) for participation in such registration;
provided, however, that in no event shall the Conversion
Securities included in such offering be reduced below thirty
percent (30%) of the total securities included in such
registration.
(c) Section 2(d) of the February Registration Agreement
is hereby amended and restated in its entirety as follows:
(d) Priority on Secondary
Registrations. If a Piggyback Registration is an underwritten
secondary registration on behalf of the Company or on behalf
of holders of the Company's securities other than holders of
Registrable Securities, and the managing underwriters advise
the Company in writing that in their opinion the number of
securities requested to be included in such registration
exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, subject
to paragraph 2(e) below, the Company will include in such
registration (i) first, the securities requested to be
included therein by the holders requesting such registration
and the Conversion Securities requested to be included in such
registration by the Series A Holders, the Series B Holders and
the Series B-1 Holders, pro rata among the holders thereof on
the basis of the number of shares that each such holder has
requested to be included in such registration, and (ii)
second, the other Registrable Securities requested to be
included in such registration, pro rata among the holders
thereof on the basis of the number of shares that each such
holder requested to be included in such registration;
provided, however, that in no event shall the Conversion
Securities included in such offering be reduced below thirty
percent (30%) of the total securities included in such
registration.
(d) Section 9 of the February Registration Agreement is
hereby amended to include the following definitions:
"Conversion Securities" means the Common Stock issued
upon the conversion of the Series A Preferred Stock, the
Series B Preferred Stock and the Series B-1 Preferred Stock,
including, without limitation, the Series B-1 Preferred Stock
issued upon the exercise of any warrant or other convertible
security held by any Investor, including, without limitation,
the Note and the Warrants.
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"Note" means that certain Substitute Convertible
Secured Promissory Note dated as of April 4, 2003 in the
principal amount of $2,000,000, by and among the Company and
Edgewater, as the same may be amended, modified, substituted
or restated from time to time.
"Series A Holders" means the holders of the Series A
Preferred Stock and the related Conversion Securities.
"Series B Holders" means the holders of the Series B
Preferred Stock and the related Conversion Securities.
"Series B-1 Holders" means the holders of the Series
B-1 Preferred Stock and the related Conversion Securities.
"Series B-1 Preferred Stock" means the Series B-1
Convertible Preferred Stock, $0.01 par value per share, of the
Company.
"Warrants" means, collectively, (a) the Warrant dated
as of April 4, 2003 to purchase 1,333,333 shares of Series B-1
Preferred Stock, issued by the Corporation to Edgewater
Private Equity Fund III, L.P., as amended, restated or
otherwise modified from time to time, and (b) the Warrant
dated as of April 4, 2003 to purchase 200,000 shares of Series
B-1 Preferred Stock, issued by the Corporation to Edgewater
Private Equity Fund III, L.P., as amended, restated or
otherwise modified from time to time.
(e) Section 10(d) of the February Registration Agreement
is hereby amended and restated in its entirety as follows:
(d) Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may be
amended, restated, modified or waived only upon the prior
written consent of the Company, the holders of a majority of
the Series A Preferred Stock and the related Conversion
Securities (all on an as-converted basis), the holders of a
majority of the Series B Preferred Stock and the related
Conversion Securities (all on an as-converted basis) and, if
the Note has been converted into shares of Series B-1
Preferred Stock or the Warrants have been exercised for shares
of Series B-1 Preferred Stock, the holders of a majority of
the Series B-1 Preferred Stock and the related Conversion
Securities (all on an as-converted basis), or if the Note and
the Warrants are still outstanding, the holders of the Note
and the Warrants.
3. Effectuation. The amendments to the Prior Registration
Agreements contemplated by this Amendment shall be deemed effective immediately
upon the full execution
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of this Amendment and without any further action required by the parties hereto.
There are no conditions precedent or subsequent to the effectiveness of this
Amendment.
[SIGNATURE PAGE FOLLOWS]
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Amendment to
Registration Agreement as of the date first written above.
EpicEdge, Inc.
(d/b/a EpicEdge), a Texas corporation
By: /s/ Xxxxxx X Xxxxxx
----------------------
Xxxxxx X. Xxxxxx
COO, CFO and Secretary
Edgewater Private Equity Fund III, L.P.
By: Edgewater III Management, L.P.
Its: General Partner
By: Edgewater III, Inc.
Its: General Partner
By: /s/ Xxxx XxXxxxxxx
--------------------
Its: Partner
