AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
October 8, 1999
To each of the several Purchasers named in
Schedule 1 to the Class A Preferred Shares
Subscription Agreement made on July 30, 1999
(the "July Purchasers")
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To each of the several Purchasers named in
Schedule 1 to the Class A Preferred Shares
Subscription Agreement made on October 8, 1999
(the "October Purchasers")
Dear Sirs:
Reference is made to a Class A Preferred Share Subscription
Agreement dated July 30, 1999 (the "July Purchase Agreement") between
Changepoint Corporation, a corporation amalgamated under the laws of Ontario
(the "Company"), and the July Purchasers whereby the July Purchasers agreed
to purchase an aggregate of 2,632,654 Class A Preferred Shares (the "July
Preferred Shares") of the Company, and to a registration rights agreement
(the "Registration Rights Agreement") between the Company and July Purchasers
of even date therewith whereby the Company made certain covenants and
agreements in favour of the July Purchasers in consideration of their
agreement to purchase the July Preferred Shares and as an inducement to them
to consummate the transactions contemplated by the July Purchase Agreement.
Reference is also made to a Class A Preferred Share
Subscription Agreement of even date herewith (the "October Purchase
Agreement") (the July Purchase Agreement and the October Purchase Agreement
being collectively, referred to hereinafter as the "Purchase Agreements")
among the Company and certain of its shareholders (collectively the
"Vendors"), and the October Purchasers whereby the October Purchasers have
agreed to purchase from the Vendors an aggregate of 3,351,308 Class A
Preferred Shares of the Company (the "October Preferred Shares") (the July
Preferred Shares and the October Preferred Shares being collectively,
referred to hereinafter as the "Preferred Shares"). In consideration of the
agreement of the October Purchasers to purchase the October Preferred Shares
and as an inducement to the October Purchasers to consummate the transactions
contemplated by the October Purchase Agreement, the Company wishes to provide
the October Purchasers with the identical registration rights provided to the
July Purchasers in the Registration Rights Agreement.
To ensure that the registration rights granted by the
Company to holders of the Preferred Shares apply equally in favour of all
holders of Preferred Shares, the Company has agreed to amend and restate the
Registration Rights Agreement accordingly. Therefore, for good and valuable
consideration, the receipt and sufficiency whereof is hereby acknowledged by
the Company, the Company covenants and agrees with each of you as follows:
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1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"CANADIAN SECURITIES LAWS" shall mean the Securities Act (Ontario), the
Regulation thereunder and all rules, policies, rulings and orders of
applicable securities regulatory authorities, and similar legislation
in each of the other provinces and territories of Canada where the
Corporation is a "reporting issuer" for purposes of such legislation.
"COMMISSION" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
"COMMON SHARES" shall mean the Common Shares of the Company, as
constituted as of the date of this Agreement.
"CONVERSION SHARES" shall mean Common Shares issued upon conversion of
the Preferred Shares.
"EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"REGISTRATION EXPENSES" shall mean the expenses so described in Section
8.
"RESTRICTED STOCK" shall mean the Conversion Shares, excluding
Conversion Shares which have been (a) registered under the Securities
Act pursuant to an effective registration statement filed thereunder
and disposed of in accordance with the registration statement covering
them or (b) publicly sold pursuant to Rule 144 under the Securities
Act.
"SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 8.
"U.S. PERSON" shall have the meaning ascribed thereto in Rule 902(a) of
Regulation S under the Securities Act.
2. RESTRICTIVE LEGEND. Each certificate representing Preferred Shares or
Conversion Shares owned by any U.S. Person or entity shall, except as
otherwise provided in this Section 2 or in Section 3, be stamped or
otherwise imprinted with a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
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REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP shall be satisfactory) the securities represented
thereby may be publicly sold without registration under the Securities
Act and any applicable state securities laws.
3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer by a U.S.
Person of any Preferred Shares or Conversion Shares (other than under
the circumstances described in Sections 4, 5 or 6), the holder thereof
shall give written notice to the Company of its intention to effect
such transfer. Each such notice shall describe the manner of the
proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company (it
being agreed that Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP shall be
satisfactory) to the effect that the proposed transfer may be effected
without registration under the Securities Act and any applicable state
securities laws, whereupon the holder of such stock shall be entitled
to transfer such stock in accordance with the terms of its notice;
PROVIDED, HOWEVER, that no such opinion of counsel shall be required
for a transfer to one or more partners or members of the transferor (in
the case of a transferor that is a partnership or a limited liability
company, respectively) or to an affiliated corporation (in the case of
a transferor that is a corporation). Each certificate for Preferred
Shares or Conversion Shares transferred to any U.S. Person or entity as
above provided shall bear the legend set forth in Section 2, except
that such certificate shall not bear such legend if (i) such transfer
is in accordance with the provisions of Rule 144 (or any other rule
permitting public sale without registration under the Securities Act)
or (ii) the opinion of counsel referred to above is to the further
effect that the transferee and any subsequent transferee (other than an
affiliate of the Company) would be entitled to transfer such securities
in a public sale without registration under the Securities Act. The
restrictions provided for in this Section 3 shall not apply to
securities which are not required to bear the legend prescribed by
Section 2 in accordance with the provisions of that Section.
4. REQUIRED REGISTRATION.
(a) At any time after the earliest of (i) six months after (x) any
registration statement covering a public offering of
securities of the Company under the Securities Act shall have
become effective or (y) a prospectus has been qualified in a
Canadian province or territory for the Company's initial
public offering of Common Shares, or (ii) the third
anniversary of the date of this Agreement, the holders of
Restricted Stock constituting at least 40% of the total shares
of Restricted Stock then outstanding may request the Company
to register under the Securities Act all or any portion of the
shares of Restricted Stock held by such requesting holder or
holders for sale in the manner specified in such notice,
PROVIDED that the shares of Restricted Stock for which
registration has been requested shall constitute at least 20%
of the total shares of Restricted Stock originally issued if
such holder or holders shall request the registration of less
than all shares of Restricted Stock then held by such holder
or holders (or any lesser percentage if the reasonably
anticipated aggregate price to the public of such public
offering would exceed
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U.S. $2,000,000). For purposes of this Section 4 and
Sections 5, 6, 13(a) and 13(d), the term "Restricted Stock"
shall be deemed to include the number of shares of
Restricted Stock which would be issuable to a holder of
Preferred Shares upon conversion of all Preferred Shares
held by such holder at such time, PROVIDED, HOWEVER, that
the only securities which the Company shall be required to
register pursuant hereto shall be shares of Common Shares,
and PROVIDED, FURTHER, HOWEVER, that, in any underwritten
public offering contemplated by this Section 4 or Sections 5
and 6, the holders of Preferred Shares shall be entitled to
sell such Preferred Shares to the underwriters for conversion
and sale of the shares of Common Shares issued upon
conversion thereof. Notwithstanding anything to the
contrary contained herein, no request may be made under
this Section 4 within 90 days after the effective date of a
registration statement filed by the Company covering a firm
commitment underwritten public offering in which the
holders of Restricted Stock shall have been entitled to
join pursuant to Sections 5 or 6 and in which there shall
have been effectively registered all shares of Restricted
Stock as to which registration shall have been requested.
(b) Following receipt of any notice under this Section 4, the
Company shall immediately notify all holders of Restricted
Stock from whom notice has not been received and shall use its
best efforts to register under the Securities Act, for public
sale in accordance with the method of disposition specified in
such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices
received by the Company from other holders within 30 days
after the giving of such notice by the Company). If such
method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of
Restricted Stock to be sold in such offering may designate the
managing underwriter of such offering, subject to the approval
of the Company, which approval shall not be unreasonably
withheld or delayed. The Company shall be obligated to
register Restricted Stock pursuant to this Section 4 on two
occasions only, PROVIDED, HOWEVER, that such obligation shall
be deemed satisfied only when a registration statement
covering all shares of Restricted Stock specified in notices
received as aforesaid, for sale in accordance with the method
of disposition specified by the requesting holders, shall have
become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall
have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in
accordance with the method of disposition specified by the
requesting holders, shares of Common Shares to be sold by the
Company for its own account, except as and to the extent that,
in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such
inclusion would adversely affect the marketing of the
Restricted Stock to be sold. Except for registration
statements on Form X-0, X-0 or any successor thereto, the
Company will not file with the Commission any other
registration statement with respect to its Common Shares,
whether for its own account or that of other stockholders,
from the date of receipt of a notice from requesting holders
pursuant to this Section 4 until the completion of the period
of distribution of the registration contemplated thereby.
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5. INCIDENTAL REGISTRATION. If the Company at any time (other than
pursuant to Section 4 or Section 6) proposes to register any of its
securities under the Securities Act for sale to the public, whether for
its own account or for the account of other security holders or both
(except with respect to registration statements on Forms X-0, X-0 or
another form not available for registering the Restricted Stock for
sale to the public), each such time it will give written notice to all
holders of outstanding Restricted Stock of its intention so to do. Upon
the written request of any such holder, received by the Company within
30 days after the giving of any such notice by the Company, to register
any of its Restricted Stock, the Company will use its best efforts to
cause the Restricted Stock as to which registration shall have been so
requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the holder
of such Restricted Stock so registered. In the event that any
registration pursuant to this Section 5 shall be, in whole or in part,
an underwritten public offering of Common Shares, the number of shares
of Restricted Stock to be included in such an underwriting may be
reduced (pro rata among the requesting holders based upon the number of
shares of Restricted Stock owned by such holders) if and to the extent
that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be
sold by the Company therein, PROVIDED, HOWEVER, that such number of
shares of Restricted Stock shall not be reduced if any shares are
to be included in such underwriting for the account of any person
other than the Company or requesting holders of Restricted Stock, and
PROVIDED, FURTHER, HOWEVER, that in no event may less than one-third
of the total number of shares of Common Shares to be included in such
underwriting be made available for shares of Restricted Stock.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 5 without thereby
incurring any liability to the holders of Restricted Stock.
6. REGISTRATION ON FORM S-3 OR F-3; SPECIAL PROVISION RELATING TO CANADIAN
OFFERINGS. If at any time (i) a holder or holders of Preferred Shares
or Restricted Stock request that the Company file a registration
statement on Form S-3 or F-3 or any successors thereto for a public
offering of all or any portion of the shares of Restricted Stock held
by such requesting holder or holders, the reasonably anticipated
aggregate price to the public of which would exceed U.S.$500,000, and
(ii) the Company is a registrant entitled to use Form S-3 or F-3 or any
successors thereto to register such shares, then the Company shall use
its best efforts to register under the Securities Act on Form S-3 or
F-3 or any successors thereto, for public sale in accordance with the
method of disposition specified in such notice, the number of shares of
Restricted Stock specified in such notice. Whenever the Company is
required by this Section 6 to use its best efforts to effect the
registration of Restricted Stock, each of the procedures and
requirements of Section 4 (including but not limited to the requirement
that the Company notify all holders of Restricted Stock from whom
notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration,
PROVIDED, HOWEVER, that there shall be no limitation on the number of
registrations on Form S-3 or F-3 which may be requested and obtained
under this Section 6, and PROVIDED, FURTHER, HOWEVER, that the
requirements contained in the first sentence of Section 4(a) shall not
apply to any registration on Form S-3 or F-3 which may be requested and
obtained under this Section 6.
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In addition to the other registration rights herein, the Company hereby
grants to the holders of Preferred Stock of the Company registration
rights with respect to required, incidental and short-form
registrations in Canada, which rights shall be substantially equivalent
to those set forth in Sections 4, 5 and 6 of this Agreement with all
appropriate changes in recognition of the differences between U.S. and
Canadian offerings. The other provisions of this Agreement shall also
apply to such Canadian offerings and registration rights, again with
appropriate changes.
7. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities
Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering
pursuant to Section 4, shall be on Form S-1, F-1 or F-10 or
other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause
such registration statement to become and remain effective for
the period of the distribution contemplated thereby
(determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for the period specified in
paragraph (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all
Restricted Stock covered by such registration statement in
accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration
statement and the prospectus included therein (including each
preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or other disposition of
the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted
Stock covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the
sellers of Restricted Stock or, in the case of an underwritten
public offering, the managing underwriter reasonably shall
request, PROVIDED, HOWEVER, that the Company shall not for any
such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it
is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by
such registration statement with any securities exchange on
which the Common Shares of the Company are then listed;
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(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act or pursuant to Canadian or provincial
securities laws, of the happening of any event of which the
Company 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 then existing;
(g) if the offering is underwritten and at the request of any
seller of Restricted Stock, use its best efforts to furnish on
the date that Restricted Stock is delivered to the
underwriters for sale pursuant to such registration: (i) an
opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the
underwriters and to such seller, stating that such
registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus
and each amendment or supplement thereof comply as to form in
all material respects with the requirements of the Securities
Act (except that such counsel need not express any opinion as
to financial statements contained therein) and (C) to such
other effects as reasonably may be requested by counsel for
the underwriters or by such seller or its counsel and (ii) a
letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters and to
such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that,
in the opinion of such accountants, the financial statements
of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters
(including information as to the period ending no more than
five business days prior to the date of such letter) with
respect to such registration as such underwriters reasonably
may request; and
(h) make available for inspection by each seller of Restricted
Stock, any underwriter participating in any distribution
pursuant to such registration statement, and any attorney,
accountant or other agent retained by such seller or
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with
such registration statement.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has
completed the distribution of all securities purchased by it, and the
period of distribution of Restricted Stock in any other registration
shall be deemed to extend until the earlier of the sale of all
Restricted Stock covered thereby and 120 days after the effective date
thereof.
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In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by
them as reasonably shall be necessary in order to assure compliance
with federal and applicable state securities laws.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller
agree to enter into a written agreement with the managing underwriter
selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an
arrangement between such underwriter and companies of the Company's
size and investment stature.
8. EXPENSES. All expenses incurred by the Company in complying with
Sections 4, 5 and 6, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel
and independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, costs of insurance and fees and disbursements of one
counsel for the sellers of Restricted Stock, but excluding any Selling
Expenses, are called "Registration Expenses". All underwriting
discounts and selling commissions applicable to the sale of Restricted
Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses
in connection with each registration statement under Sections 4, 5 or 6
shall be borne by the participating sellers in proportion to the number
of shares sold by each, or by such participating sellers other than the
Company (except to the extent the Company shall be a seller) as they
may agree.
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9. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, the
Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder, each underwriter of such
Restricted Stock thereunder and each other person, if any, who
controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 4, 5
or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse each such seller, each such underwriter and
each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or
action, PROVIDED, HOWEVER, that the Company will not be liable
in any such case if and 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 so made in conformity with information
furnished by any such seller, any such underwriter or any such
controlling person in writing specifically for use in such
registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, each
seller of such Restricted Stock thereunder, severally and not
jointly, will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each
underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the
Company or such officer, director, underwriter or controlling
person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement under which such Restricted Stock was registered
under the Securities Act pursuant to Sections 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse
the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, PROVIDED,
HOWEVER, that such seller will be
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liable hereunder in any such case if and only 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 reliance
upon and in conformity with information pertaining to such
seller, as such, furnished in writing to the Company by
such seller specifically for use in such registration
statement or prospectus, and PROVIDED, FURTHER, HOWEVER,
that the liability of each seller hereunder shall not in
any event to exceed the net proceeds received by such
seller from the sale of Restricted Stock covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other
than under this Section 9 and shall only relieve it from any
liability which it may have to such indemnified party under
this Section 9 if and to the extent the indemnifying party is
prejudiced by such omission. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to
the extent it shall wish, to assume and undertake the defense
thereof with counsel satisfactory to such indemnified party,
and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake
the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 9 for any
legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so
selected, PROVIDED, HOWEVER, that, if the defendants in any
such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be reasonable defenses
available to it which are different from or additional to
those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified
party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the
defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as
incurred.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which
either (i) any holder of Restricted Stock exercising rights
under this Agreement, or any controlling person of any such
holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced
in such case notwithstanding the fact that this Section 9
provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the
part of any such selling holder or any such controlling person
in circumstances for which
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indemnification is provided under this Section 9; then, and
in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after
contribution from others) in such proportion so that such
holder is responsible for the portion represented by the
percentage that the public offering price of its Restricted
Stock offered by the registration statement bears to the
public offering price of all securities offered by such
registration statement, and the Company is responsible for
the remaining portion; PROVIDED, HOWEVER, that, in any such
case, (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such
Restricted Stock offered by it pursuant to such
registration statement; and (B) no person or entity guilty
of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.
10. CHANGES IN COMMON SHARES OR PREFERRED STOCK. If, and as often as, there
is any change in the Common Shares or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or
through a merger, consolidation, reorganization amalgamation, or
recapitalization, 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 Common Shares or the
Preferred Stock as so changed.
11.A RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time
permit the sale of the Restricted Stock to the public without
registration, at all times after 90 days after any registration
statement covering a public offering of securities of the Company under
the Securities Act shall have become effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon
request a written statement by the Company as to its
compliance with the reporting requirements of such Rule 144
and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as
such holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing such holder to
sell any Restricted Stock without registration.
11.B CANADIAN SECURITIES LAW REQUIREMENTS
With a view to making available the benefits of certain rules and
regulations of the Canadian Securities Laws that may at any time permit
the sale of the Restricted Stock to the public without the filing of a
Prospectus, once a public market exists for the Common Shares, the
Corporation agrees to use all reasonable efforts to:
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(a) make and keep public information available, as those terms are
understood and defined under the Securities Act (Ontario), at
all times after the date the Corporation becomes a reporting
issuer under Canadian Securities Laws;
(b) file with the appropriate Canadian Securities Laws regulatory
authorities in a timely manner all reports and other documents
required of the Corporation under Canadian Securities Laws (at
any time after the date that the Corporation becomes a
reporting issuer under Canadian Securities Laws); and
(c) furnish to each holder of Restricted Stock forthwith upon
request (i) a written statement by the Corporation stating
that the Corporation is a reporting issuer and is not in
default of any requirement of Canadian Securities Laws (at any
time after the date that the Corporation becomes a reporting
issuer under Canadian Securities Laws), (ii) a copy of the
most recent annual or quarterly report of the Corporation, and
(iii) any other reports and documents of the Corporation and
other information in the possession of or reasonably obtained
by the Corporation as the holder of Restricted Stock may
reasonably request in order to avail itself of any of the
Canadian Securities Laws that allow such holder to sell
Restricted Stock without filing a Prospectus.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by
the Company have been duly authorized by all requisite
corporate action and will not violate any provision of law,
any order of any court or other agency of government, the
Articles or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a
breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its
terms.
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13. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the
parties hereto (including without limitation transferees of
any Preferred Shares or Restricted Stock), whether so
expressed or not, PROVIDED, HOWEVER, that registration rights
conferred herein on the holders of Preferred Shares or
Restricted Stock shall only inure to the benefit of a
transferee of Preferred Shares or Restricted Stock if (i)
there is transferred to such transferee at least 20% of the
total shares of Restricted Stock originally issued pursuant to
the Purchase Agreements to the direct or indirect transferor
of such transferee or (ii) such transferee is a partner,
member, shareholder or affiliate of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in
person, mailed by certified or registered mail, return receipt
requested, or sent by telecopier or telex, addressed as
follows:
(i) if to the Company or any other party hereto, at the
address of such party set forth in the Purchase
Agreements;
(ii) if to any subsequent holder of Preferred Shares or
Restricted Stock, to it at such address as may have
been furnished to the Company in writing by such
holder;
or, in any case, at such other address or addresses as shall
have been furnished in writing to the Company (in the case of
a holder of Preferred Shares or Restricted Stock) or to the
holders of Preferred Shares or Restricted Stock (in the case
of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein. Each of the parties hereby
irrevocably attorns to the jurisdiction of the courts of the
Province of Ontario.
(d) This Agreement may not be amended or modified, and no
provision hereof may be waived, without the written consent of
the Company and the holders of at least two-thirds of the
outstanding shares of Restricted Stock.
(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) The obligations of the Company to register shares of
Restricted Stock under Sections 4, 5 or 6 shall terminate on
the fifteenth anniversary of the date of this Agreement.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company,
each holder of Restricted Stock who is a
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party to this Agreement shall agree not to sell publicly
any shares of Restricted Stock or any other shares of
Common Shares (other than shares of Restricted Stock or
other shares of Common Shares being registered in such
offering), without the consent of such underwriters, for a
period of not more than 90 days following the effective
date of the registration statement relating to such
offering; PROVIDED, HOWEVER, that all persons entitled to
registration rights with respect to shares of Common Shares
who are not parties to this Agreement, all other persons
selling shares of Common Shares in such offering, all
persons holding in excess of 1% of the capital stock of the
Company on a fully diluted basis and all executive officers
and directors of the Company shall also have agreed not to
sell publicly their Common Shares under the circumstances
and pursuant to the terms set forth in this Section 13(g).
(h) Notwithstanding the provisions of Section 7(a), the Company's
obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall
be suspended for a period not to exceed 90 days in any
24-month period if there exists at the time material
non-public information relating to the Company which, in the
reasonable opinion of the Company, should not be disclosed.
(i) The Company shall not grant to any third party any
registration rights more favorable than or inconsistent with
any of those contained herein, so long as any of the
registration rights under this Agreement remains in effect.
(j) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity
or unenforceability shall attach only to such provision and
shall not in any manner affect or render illegal, invalid or
unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid
or unenforceable provision were not contained herein.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this
Agreement shall be a binding agreement between the Company and you.
Very truly yours,
CHANGEPOINT CORPORATION
By:_______________________________
Xxxxx Xxxxx
Title: President
____________________________
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AGREED TO AND ACCEPTED as of the date first above written.
Purchasers named in Schedule 1 to the Purchase Agreements:
__________________________________
By: ______________________________
Title: ___________________________
By: ______________________________
Title: ___________________________
