SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
May 26, 2000
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")
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To Xxxxxxxxx XxXxxxxx & Partners, as
Agent for the several Purchasers of Class B
Preferred Shares pursuant to certain Subscription
Agreements made on May 26, 2000 and named in
Schedule "A" hereto (the "Schedule A Purchasers")
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To each of the several Purchasers of
Class B Preferred Shares pursuant to certain
Subscription Agreements made on May 26,
2000 and named in Schedule "B" hereto
(the "Schedule B 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 dated October 8, 1999 (the "October Purchase Agreement")
(the July Purchase Agreement and the October Purchase Agreement being,
collectively, referred to hereinafter as the "Class A
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Purchase Agreements") among the Company and certain of its shareholders
(collectively the "Vendors"), and the October Purchasers whereby the October
Purchasers 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 "Class A 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 entered into an
Amended and Restated Registration Rights Agreement dated October 8, 1999, with
the July Purchasers and the October Purchasers (collectively referred to
hereinafter as the "Class A Purchasers"), to provide the October Purchasers with
the identical registration rights provided to the July Purchasers in the
Registration Rights Agreement.
Reference is also made to certain Class B Preferred Share
Subscription Agreements dated May 26, 2000 (the "Schedule A Purchase
Agreements") among the Company, Xxxxxxxxx XxXxxxxx & Partners and the Schedule A
Purchasers, and to certain Class B Preferred Share Subscription Agreements dated
May 26, 2000 (the "Schedule B Purchase Agreements") among the Company and the
Schedule B Purchasers (the Schedule A Purchase Agreements and the Schedule B
Purchase Agreements, being, collectively, referred to hereinafter as the "Class
B Purchase Agreements", and the Class A Purchase Agreements and the Class B
Purchase Agreements being, collectively, referred to hereinafter as the
"Purchase Agreements") whereby the Schedule A Purchasers and the Schedule B
Purchasers (collectively, the "Class B Purchasers") have agreed to purchase an
aggregate of 2,873,696 Class B Preferred Shares of the Company (the "Class B
Preferred Shares") (the Class A Preferred Shares and the Class A Preferred
Shares being, collectively, referred to hereinafter as the "Preferred Shares").
Reference is also made to the terms and provisions of the Schedule A Purchase
Agreements whereby each of the Schedule A Purchasers has irrevocably constituted
and appointed Xxxxxxxxx, XxXxxxxx & Partners as its lawful agent and
attorney-in-fact to act on its behalf with full power and authority to enter
into this Registration Rights Agreement. In consideration of the agreement of
the Class B Purchasers to purchase the Class B Preferred Shares and as an
inducement to the Class B Purchasers to consummate the transactions contemplated
by the Class B Purchase Agreement, the Company wishes to provide the Class B
Purchasers with the identical registration rights provided to the Class A
Purchasers in the Amended and Restated 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 further amend and restate the
Amended and Restated 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:
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
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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 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.
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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
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
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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.
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.
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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.
In addition to the other registration rights herein, the Company hereby
grants to the holders of Preferred Shares 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
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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;
(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
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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.
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.
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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.
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
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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 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 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
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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 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 SHARES. If, and as often as,
there is any change in the Common Shares or the Preferred Shares 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 Shares 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
-12- Registration Rights Agreement
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:
(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:
-13- Registration Rights Agreement
(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.
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.
-14- Registration Rights Agreement
(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 party to this
Agreement shall agree not to sell publicly any shares of
Restricted Stock or any other Common Shares (other than
shares of Restricted Stock or other Common Shares being
registered in such offering), without the consent of such
underwriters, for a period of not more than 180 days
following the date of the prospectus relating to the
Company's initial public offering or 90 days following the
effective date of the prospectus relating to any other
offering; PROVIDED, HOWEVER, that all persons entitled to
registration rights with respect to 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.
-15- Registration Rights Agreement
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
-------------------------------
-16- Registration Rights Agreement
AGREED TO AND ACCEPTED as of the date first above written.
Class A Purchasers named in Schedule 1 to the Class A Purchase
Agreements, and Schedule B Purchasers named in Schedule "B" hereto:
--------------------------------------
By:
-----------------------------------
Title:
--------------------------------
By:
-----------------------------------
Title:
--------------------------------
XXXXXXXXX XXXXXXXX & PARTNERS
as agent on behalf of the parties
listed in Schedule "A" hereto
By:
-----------------------------------
Title:
--------------------------------
SCHEDULE "A"
XXXXXXXXX XXXXXXXX CLASS "B" PURCHASERS
SCHEDULE "B"
NON-XXXXXXXXX XXXXXXXX CLASS "B" PURCHASERS
---------------------------------------------------- ------------------------------------ ----------------------------
NO. OF CLASS B
SUBSCRIBER SHARES PURCHASED PURCHASE PRICE
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
The VenGrowth Investment Fund Inc. 526,120 $7,050,008.00
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
The VenGrowth II Investment Fund Inc. 262,874 $3,522,511.60
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
XDL Intervest Limited Partnership 451,455 $6,049,500.00
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
XDL Intervest (USA) Limited Partnership 87,705 $1,175,250.00
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
XDL Intervest (EF) Limited Partnership 20,541 $275,250.00
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
Jayvee & Co. 186,567 $2,499,997.80
---------------------------------------------------- ------------------------------------ ----------------------------
---------------------------------------------------- ------------------------------------ ----------------------------
1359292 Ontario Ltd. 5,000 $67,000.00
---------------------------------------------------- ------------------------------------ ----------------------------
