Exhibit 4.8
Registration Rights Agreement
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THIS REGISTRATION RIGHTS AGREEMENT is made as of the 28th day of June, 2002
BETWEEN:
WORKSTREAM INC.,
a corporation incorporated under the laws of Canada
(hereinafter referred to as the "Company")
AND:
those persons listed on Schedule "A" attached hereto
(the persons listed on Schedule "A" attached hereto are
hereinafter referred to as the "Investors")
WHEREAS:
A. This Agreement is being entered into pursuant to that certain Agreement
and Plan of Merger dated as of May 23, 2002 among the Company,
Workstream Acquisition, Inc., a wholly owned subsidiary of the Company
("Merger Sub") and Icarian, Inc. (the "Merger Agreement"). The Merger
Agreement provides that, subject to the terms and conditions of the
Merger Agreement, Merger Sub will be merged with and into Icarian, Inc.
in a statutory merger (the "Merger") in which all outstanding shares of
capital stock of Icarian, Inc. will be converted into the right to
receive, and will be exchangeable for, shares of Common Stock of the
Company.
B. As an inducement for the Investors to approve the Merger Agreement, the
Merger and the transactions contemplated by the Merger Agreement, the
Company desires to grant the registration rights to the Investors as
set forth herein with respect to the shares of Common Stock of the
Company issued to such Holders in the Merger.
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
and other good and valuable consideration (the receipt and sufficiency of which
is hereby acknowledged by each of the parties), the parties hereto covenant and
agree as follows:
1. REGISTRATION RIGHTS
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1.1. Definitions. In this Agreement:
1.1.1. "1933 Act" means the United States Securities Act of
1933, as amended;
1.1.2. "1934 Act" means the United States Securities Exchange
Act of 1934, as amended;
1.1.3. "Affiliate" means as to any person, any other person
which directly or indirectly is controlled by, controls or is
under direct or common control with such person;
1.1.4. "Agreement," "hereto," "herein," "hereof," "hereunder"
and similar expressions refer to this Agreement and not any
particular paragraph or any particular portion of this
agreement and includes all schedules attached to this
Agreement;
1.1.5. "Common Shares" means shares of common stock of the
Company;
1.1.6. "Form F-1," "Form F-2," "Form F-3," "Form F-4" and
"Form S-8" mean such respective forms under the 1933 Act, as
in effect on the date of this Agreement or any successor
registration forms to Form F-1, Form F-2, Form F-3, Form F-4
and Form S-8, respectively, under the 1933 Act subsequently
adopted by the SEC;
1.1.7. "Holder" means any of the Investors or any assignee of
Registrable Securities in accordance with Section 7.1;
1.1.8. "Immediate Family" means, with respect to any natural
person, each of such person's spouse, father, mother,
brothers, sisters, aunts, uncles, nieces and nephews and
lineal descendants and ancestors;
1.1.9. "Investors" means those persons listed on Schedule "A"
attached hereto;
1.1.10. "Register," "Registered," and "Registration" refer to
a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act
with the SEC, and the automatic effectiveness or the
declaration or ordering of effectiveness of such registration
statement or document by the SEC;
1.1.11. "Registrable Securities" means the Common Shares
issued or issuable pursuant to the Merger Agreement and any
Common Shares issued upon any share split of the Common Shares
or issued as (or issuable upon the conversion or exercise of
any warrant, right, option or other convertible security which
is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, such Common
Shares. In the event of any merger, reorganization,
consolidation, re-capitalization or other change in corporate
structure affecting the Common Shares, such adjustment shall
be made in the definition of "Registrable Securities" as is
appropriate in order to prevent any dilution or enlargement of
the rights granted pursuant to Section 2. For purposes of this
Agreement, any Registrable Securities shall cease to be
Registrable Securities when (a) a registration statement
covering such Registrable Securities has been declared
effective and such Registrable Securities have been disposed
of pursuant to such effective registration statement, or (b)
such Registrable Securities are sold by a person in a
transaction that is exempt from registration pursuant to Rule
144 under the 1933 Act.
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1.1.12. "SEC" means the United States Securities and Exchange
Commission.
2. REGISTRATION
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2.1. Company Registration.
(a) Notice. If the Company proposes to register any of its
shares or other equity securities (or securities convertible into
equity securities) under the 1933 Act in connection with the public
offering of such securities solely for cash (other than a registration
on Form F-4 or a registration on Form S-8 relating solely to the sale
of securities to participants in a Company employee and/or director
stock plan), the Company will, at such time, give each Holder at least
thirty (30) days prior written notice before filing such registration
statement with respect to such registration and will afford such Holder
an opportunity to include in such registration statement all or any
part of the Registrable Securities then held by such Holder. Upon the
written request of any Holder, given within 20 days after the receipt
of such notice by the Company, the Company will, subject to the
provisions of Section 5.1, cause a registration statement covering all
of the Registrable Securities, as the case may be, that such Holder has
requested to be registered, subject to Section 5.2, to become effective
under the 1933 Act. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the
terms and conditions set forth herein.
(b) No Obligation to Complete Offering. The Company is under
no obligation to complete any offering of its securities it proposes to
make and will incur no liability to any Holder for its failure to do
so.
3. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
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3.1. Resales Under Rule 144; Form F-3 Registration. With a view to
making available to the Holders the benefits of Rule 144 promulgated
under the 1933 Act ("Rule 144") and any other rule or regulation of the
SEC that may at any time permit a Holder to sell securities of the
Company to the public without registration, and with a view to making
it possible for Holders to have the resale of the Registrable
Securities registered pursuant to a registration statement on Form F-3,
the Company will, so long as any Registrable Securities remain
outstanding:
3.1.1 Make and keep public information available, as those
terms are understood and defined in Rule 144, at all times
after 90 days following the effective date of the first
registration statement filed by the Company under the 1933 Act
for the offering of its securities to the general public;
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3.1.2 File with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and
the 1934 Act; and
3.1.3 furnish to a Holder so long as such Holder owns any
Registrable Securities, forthwith upon request:
3.1.3.1. a written statement by the Company as to its
compliance with the reporting requirements of Rule 144
(at any time after 90 days following the effective date
of the first registration statement filed by the Company
under the 1933 Act for the offering of the securities to
the general public) and of the 1933 Act and the 1934 Act
(at any time after it has become subject to such
reporting requirements), or as to its qualification as a
registrant whose securities may be resold pursuant to
Form F-3 (at any time after it so qualifies);
3.1.3.2. a copy of the most recent annual or quarterly
report of the Company and such other reports and
documents so publicly filed by the Company with the SEC;
and
3.1.3.3. such other documents as may be reasonably
requested by a Holder in availing any Holder of any rule
or regulation of the SEC that permits the selling of any
such securities without registration or pursuant to such
form.
4. OBLIGATIONS OF THE COMPANY
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4.1. Effecting a Registration. If the Company is required under this
Agreement to effect the registration of any Registrable Securities, the
Company will, as expeditiously as reasonably possible, prepare and file
with the SEC a registration statement with respect to such Registrable
Securities and use best efforts to cause such registration statement to
become effective and keep such registration statement effective for up
to 180 days or until such earlier time that the distribution of the
Holders' securities has been completed (such 180-day or shorter period,
the "Effectiveness Period"); provided such Effectiveness Period shall
be extended by the amount of time the Holders were prohibited from
selling Registrable Securities pursuant to Section 8.1.
4.2. Additional Obligations for US Registrations. In addition to its
obligations under Section 4.1, if the Company is required under this
Agreement to effect the registration of any Registrable Securities, the
Company will:
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4.2.1 prepare and file with the SEC such amendments and
supplements to the registration statement and the prospectus
used in connection with such registration statement, and cause
each such amendment and supplement to become effective, as may
be necessary to comply with the provisions of the 1933 Act
with respect to the disposition of all securities covered by
such registration statement during the Effectiveness Period;
4.2.2 furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity
with the requirements of the 1933 Act, and such other
documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
the Holders;
4.2.3 use best efforts to register or qualify the securities
covered by such registration statement under such other
securities or Blue Sky laws of such states and jurisdictions
as is reasonably requested by the Holders, except that the
Company is not required in connection therewith or as a
condition thereto to qualify to do business, subject itself to
taxation or file a general consent to service of process in
any such state or jurisdiction;
4.2.4 upon any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of
such offering;
4.2.5 notify each Holder covered by such registration
statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be
delivered under the 1933 Act, of the happening of any event as
a result of which the prospectus included 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 and
promptly file such amendments and supplements as required
pursuant to Section 8.1 on account of such event and cause
each such amendment and supplement to become effective;
4.2.6 furnish, at the request of a Holder requesting
registration of Registrable Securities pursuant to this
Agreement, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective:
4.2.6.1. an opinion or opinions, dated such date, of the
counsel representing the Company for the purposes of
such registration, in form and substance as is
customarily given by company counsel to the underwriters
in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting
registration of Registrable Securities; and
4.2.6.2. a letter dated such date, from the independent
certified public accountant of the Company, in form and
substance as is customarily given by independent
certified public accountants to underwriters in an
underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting
registration of Registrable Securities;
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4.2.7 cause all such Registrable Securities registered
pursuant to this Agreement to be listed on each securities
exchange or quotation service on which similar securities of
the Company are then listed.
4.3. Furnish Information. The obligations of the Company to take any
action pursuant to this Agreement in respect of the Registrable
Securities of any selling Holder is conditional upon such selling
Holder furnishing to the Company on a timely basis such information
regarding itself, the Registrable Securities held by such Holder and
the intended method of disposition of such securities, as is required
to effect the registration or qualification of such Holder's
Registrable Securities.
4.4. Expenses of Company Registration. Subject to Section 4.5, the
Company will bear and pay all reasonable fees and expenses incurred in
connection with any registration, filing or qualification of
Registrable Securities with respect to any registration pursuant to
Section 2 for each Holder including, without limitation, reasonable
legal fees and expenses of one counsel to the Holders, all
registration, filing and qualification fees and printing and accounting
fees.
4.5. Underwriting Discounts and Commissions. All underwriting discounts
and commissions relating to Registrable Securities included in any
registration effected pursuant to Section 2 will be borne and paid
rateably by the Holders of such Registrable Securities.
5. UNDERWRITING REQUIREMENTS
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5.1. Underwriting Requirements.
5.1.1 In connection with any offering involving an
underwriting of securities being issued by the Company, the
Company is not required under Section 2 to include any of the
Holders' securities in such underwriting unless such Holders
accept the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it.
5.1.2 If the managing underwriter for the offering advises the
Company in good faith in writing that marketing factors
require a limitation of the number of securities to be
underwritten, then the managing underwriter(s) may exclude
securities (including Registrable Securities) from the
registration and the underwriting and the number of securities
that may be included in the registration and the underwriting
shall be allocated first to the Company and second to Holders
requesting inclusion of their Registrable Securities in such
registration statement.
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5.2. Allocation of Cutback. If the amount of securities to be included
in a registration is to be reduced in accordance with Section 5.1, the
securities that would otherwise be included will be reduced in the
following order:
5.2.1 all securities that shareholders, other than the
Holders, seek to include in the offering will be excluded from
the offering to the extent limitation on the number of
securities included in the underwriting is required;
5.2.2 if further limitation on the number of securities to be
included in the underwriting is required, and subject to
Section 5.1, then the number of securities held by the Holders
that may be included in the underwriting will be reduced so
that the number of shares included by such Holders in the
underwriting are pro rata in accordance with the number of
Registrable Securities held by each such Holder requesting
inclusion of their Registrable Securities.
5.3. For purposes of Section 5.2, for any selling shareholder that is a
Holder of Registrable Securities and is a partnership, a limited
liability company or a corporation, the partners, retired partners,
members, retired members and shareholders of such Holder, or the
estates and family members of such partners, retired partners, members,
retired members and shareholders and any trusts for the benefit of any
of the foregoing persons are collectively deemed to be a "Selling
Holder," and any pro rata reduction with respect to such "Selling
Holder" is based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in
such "Selling Holder."
6. INDEMNIFICATION
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6.1. Indemnification by Company.
6.1.1 If any Registrable Securities are included in a
registration statement under this Agreement, the Company will
indemnify and hold harmless each Holder, the officers,
directors, partners, members, agents and employees of each
Holder, any underwriter (as defined in the 0000 Xxx) for such
Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the 1933 Act or the 1934
Act, against any losses, claims, damages or liabilities (joint
or several) to which they may become subject under the 1933
Act, the 1934 Act or any other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (each a
"Violation"):
6.1.1.1. any untrue statement or alleged untrue
statement of a material fact contained in such
registration statement, including any preliminary
prospectus or final prospectus contained therein or any
amendments or supplements thereto;
6.1.1.2. the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances in which they were made, not
misleading; or
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6.1.1.3. any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any federal or
state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any
federal or state securities law in connection with any
matter relating to such registration statement.
6.1.2 The Company will reimburse each such Holder, officer,
director, partner, member, agent, employee, underwriter or
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, within one
month after a request for reimbursement has been received by
the Company.
6.1.3 The Company is not liable under the indemnity contained
in this Section 6.1:
6.1.3.1. in respect of amounts paid in settlement of any
loss, claim, damage, liability or action if such
settlement is effected without the consent of the
Company (which consent will not be unreasonably withheld
or delayed):
6.1.3.2. to the extent that any loss, claim, damage,
liability or action arises out of or is based upon a
Violation that occurs in reliance upon and in conformity
with written information furnished expressly for use in
connection with such registration by or on behalf of
such Holder, underwriter or controlling person; or
6.1.3.3. in the case of a sale effected directly by a
Holder of Registrable Securities (including a sale of
such Registrable Securities through any underwriter
retained by such Holder engaging in a distribution
solely on behalf of such Holder), where:
(i) such untrue statement or alleged untrue
statement or omission or alleged omission
was contained in a preliminary prospectus
and corrected in a final or amended
prospectus; and
(ii) such Holder failed to deliver a copy of
the final or amended prospectus at or
prior to the confirmation of the sale of
the Registrable Securities to the person
asserting any such loss, claim, damage or
liability in any case in which such
delivery is required by the 1933 Act.
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6.1.4 For greater certainty, if in connection with any
underwritten public offering of Registered Securities, the
Company or any underwriters enter into an underwriting or
purchase agreement relating to such offering that contains
provisions relating to indemnification and contribution
between the Company and such underwriters, the provisions of
such underwriting agreement or purchase agreement, and not the
provisions of this Agreement, shall be deemed to govern
matters relating to indemnification and contribution as
between such underwriters and the Company.
6.2. Indemnification by Holder.
6.2.1 Each Holder that sells any Registrable Securities
pursuant to any registration statement will indemnify and hold
harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of
the 1933 Act, each employee, agent, and any underwriter for
the Company, and any other Holder or other shareholder selling
securities in such registration statement or any of its
directors, officers, partners, members, agents or employees or
any person who controls such Holder or such other shareholder
or such underwriter, against any losses, claims, damages, or
liabilities (joint or several) to which the Company or any
such director, officer, controlling person, employee, agent,
or underwriter or controlling person, or other such Holder,
shareholder, director, officer or controlling person may
become subject, under the 1933 Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case only to the extent
that such Violation occurs in reliance upon and in conformity
with written information furnished by or on behalf of such
Holder expressly for use in connection with such registration.
6.2.2 Each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such
director, officer, controlling person, agent or underwriter or
controlling person, other Holder or other shareholder,
officer, director, partner, member, agent, employee, or
controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action
within one month after a request for reimbursement has been
received by such Holder.
6.2.3 The liability of any Holder under this indemnity is
limited to the amount of net proceeds (after deduction of all
underwriters' discounts and commissions paid by such Holder in
connection with the registration in question) received by such
Holder in the offering giving rise to the Violation.
6.2.4 The Holder is not liable under the indemnity contained
in this Section 6.2:
6.2.4.1. in respect of amounts paid in settlement of any
such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder
(which consent will not be unreasonably withheld or
delayed);
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6.2.4.2. in the case of a sale effected directly by the
Company of its securities (including a sale of such
securities through any underwriter retained by the
Company to engage in a distribution solely on behalf of
the Company), where:
(i) such untrue statement or alleged
untrue statement or omission or alleged
omission was contained in a preliminary
prospectus and corrected in a final or
amended prospectus; and
(ii) the Company failed to deliver a copy
of the final or amended prospectus at or
prior to the confirmation of the sale of
the securities to the person asserting
any such loss, claim, damage or liability
in any case in which such delivery is
required by the 0000 Xxx.
6.2.5 The obligations of the Holders under this indemnity are
several, not joint or joint and several.
6.3. Indemnification Procedure
6.3.1 Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action
(including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement
thereof, and the indemnifying party may participate in, and,
to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, assume and
control the defense thereof with counsel mutually satisfactory
to the parties.
6.3.2 An indemnified party may retain its own counsel, with
the fees and expenses to be paid by the indemnifying party,
but only if representation of such indemnified party by the
counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented
by such counsel in such proceeding.
6.3.3 The failure to deliver written notice to the
indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability
to defend such action, will relieve such indemnifying party of
any liability to the indemnified party under this Section 6 to
the extent of such prejudice, but the omission to deliver
written notice to the indemnifying party does not relieve it
of any liability that it may have to any indemnified party
otherwise than under this Section 6.3.3.
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6.4. Contribution. If the indemnification provided for in this Section
6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on
the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability,
claim, damage or expense, as well as any other relevant equitable
considerations; provided that in no event shall any Holder's
cumulative, aggregate liability under this 6.4, or under Section 6.2,
or under such Sections together, exceed the net proceeds from the
offering received by such Holder. Notwithstanding anything to the
contrary herein, no party shall be liable for contribution under this
Section 6.4 except to the extent and under the circumstances as such
party would have been liable to indemnify under Section 6.1 or Section
6.2, as the case may be, if such indemnification were enforceable under
applicable law. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the
parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. In any
event, no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
6.5. Survival. The obligations of the Company and the Holders under
this Section 6 survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement.
7. ASSIGNMENT OF REGISTRATION RIGHTS
---------------------------------
7.1. Assignment. The rights of the Holders under this Agreement may be
assigned by any Holder to the following permitted transferees, and by
such transferees to the following permitted transferees:
7.1.1 to an Affiliate, subsidiary, partner, member or
shareholder of such Holder or transferee or an account managed
or advised by the manager or adviser of such Holder or
transferee;
7.1.2 by gift or bequest or through inheritance to, or for the
benefit of, any member or members of such Holder's Immediate
Family or to a trust for the benefit of any member or members
of such Holder's Immediate Family;
7.1.3 to a trust in respect of which such Holder serves as
trustee where the trust instrument governing such trust
provides that such Holder, as trustee, will retain sole and
exclusive control over the voting and disposition of such
rights until the termination of this Agreement;
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7.1.4 to a limited partnership or limited liability company,
all partners or members of which are members of such Holder's
Immediate Family; or
7.1.5 in connection with the sale or other transfer of not
less than 20% of the Registrable Securities outstanding as of
the date of this Agreement (as adjusted for stock splits,
combinations, stock dividends and recapitalizations) held by
such Holder.
7.2. Conditions to Transfer. Any transferee to whom rights under this
Agreement are transferred:
7.2.1 as a condition to such transfer, will promptly deliver
to the Company (a) a written instrument by which such
transferee agrees to be bound by the obligations imposed upon
Holders under this Agreement to the same extent as if such
transferee were a Holder under this Agreement, (b) a
certificate in substantially the same form as attached as
Schedule "B" hereto; and
7.2.2 is deemed to be a Holder under this Agreement.
8. MISCELLANEOUS PROVISIONS
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8.1. Procedures for Amending or Supplementing Registration Statements.
Whenever a registration statement covering Registrable Securities
pursuant to any section of this Agreement is effective and the Company
determines that, based upon advice of counsel, such registration
statement or the prospectus relating thereto requires amendment or
supplementing, the Company will notify all Holders of such fact and
will promptly cause such registration statement or the prospectus
relating thereto to be amended or supplemented, as the case may be, and
will notify all Holders when such amendment or supplement has been
filed and, as to any such amendment to a registration statement,
declared effective. Holders will not sell any Registrable Securities
until such latter notice is provided. If the board of directors of the
Company determines in its reasonable discretion that it would not be in
the best interests of the Company to so amend or supplement the
registration statement at such time, the Company is entitled to delay
the filing of such amendment or supplement for a period not to exceed
30 days.
8.2. Termination of Registration Rights. The registration obligations
of the Company pursuant to this Agreement terminate, with respect to
any Holder, on the earlier of:
8.2.1 the date that such Holder (together with Affiliates,
partners, members and former partners and former members) has
sold under Rule 144 or otherwise all of the remaining
Registrable Securities issued or issuable to such Holder;
8.2.2 the date on which counsel to the Company provides the
Holder with an opinion, in a form reasonably acceptable to the
Holder, that a sale of all Registrable Securities of the
Holder would not be a distribution under the 1933 Act; and
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8.2.3 June 1, 2007.
9. GENERAL
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9.1. Notices. All notices, requests, consents and demands must be in
writing and must be personally delivered (effective upon receipt),
faxed (effective upon receipt of the fax in complete, readable form),
or sent via a reputable overnight courier service (effective the
following business day), to the Company at:
Workstream Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX X0X 0X0
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a copy sent at the same time and by the same means to:
Xxxxxx Xxxxxxxxx Xxxx & XxXxxxxxx LLP
00 Xxxxxx Xx., 0xx xxxxx,
Xxxxxx, Xxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: M.A. Xxxxxxx
or to the Holders at their addresses specified on Schedule A,
Any party hereto may by notice so given change its address or facsimile
number for future notices hereunder.
9.2 Entire Agreement. This Agreement, the Schedules attached hereto and
the Merger Agreement constitute the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all
prior and contemporaneous understandings and agreements, whether
written or oral, with respect to such subject matter.
9.3 Amendments, Waivers and Consents. Modifications or amendments to
this Agreement may be made, and compliance with any covenant or
provision of this Agreement may be omitted or waived, if the Company
agrees thereto and the Company:
9.3.1 obtains the consent in writing from persons holding or
having the right to acquire in the aggregate a majority
of the Registrable Securities; and
9.3.2 in each such case, delivers copies of such consent in
writing to any Holders who did not execute the consent,
13
provided that any modification, amendment or waiver that adversely
affects a Holder in a manner different from other Holders shall not be
effective as against such adversely affected Holder unless consented to
by such adversely affected Holder.
9.4 Currency. All payments and amounts of money referred to in this
Agreement are expressed in United States Dollars unless otherwise
stated.
9.5 Binding Effect; Assignment. This Agreement is binding upon and
inures to the benefit of the personal representatives, successors and
permitted assigns of the respective parties to this Agreement. The
Company may not assign its obligations under this Agreement or any
interest in this Agreement without obtaining the prior written consent
of the Holders holding or having the right to acquire in the aggregate
a majority of the Registrable Securities then outstanding.
9.6 General. The headings contained in this Agreement are for reference
purposes only and do not affect the meaning or interpretation of this
Agreement. In this Agreement the singular includes the plural, the
plural includes the singular, and the masculine gender includes the
neuter, masculine and feminine genders. This Agreement is governed by
and is to be construed and enforced in accordance with the laws of the
State of Delaware.
9.7 Severability. If any provision of this Agreement is found by any
court of competent jurisdiction to be invalid or unenforceable, the
parties hereby waive such provision to the extent that it is found to
be invalid or unenforceable. Such provision may, to the maximum extent
allowable by law, be modified by such court so that it becomes
enforceable, and, as modified, will be enforced as any other provision
of this Agreement, all the other provisions of this Agreement
continuing in full force and effect.
9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all
of which taken together shall be deemed to constitute one and the same
instrument. Counterparts may be executed either in original or faxed
form and the parties adopt any signatures received by a receiving fax
machine as original signatures of the parties; provided, however, that
any party providing its signature in such manner shall promptly forward
to the other party an original of the signed copy of this Agreement
which was so faxed.
9.9 Specific Performance. The Company recognizes that the rights of the
Holders under this Agreement are unique, and, accordingly, the Holders
will, in addition to such other remedies available to them at law or in
equity, have the right to enforce their rights under this Agreement by
actions for injunctive relief and specific performance to the extent
permitted by law. This Agreement is not intended to limit or abridge
any rights of the Holders that exist apart from this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first set forth above.
14
SIGNED, SEALED AND DELIVERED
WORKSTREAM INC.
Per: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: C.E.O.
INVESTORS:
Sands Brothers Venture Capital IV, LLC
Per: /s/
---------------------------------
Title:
SB Resource Associates, LLC
Per: /s/
---------------------------------
Title:
Xxx Xxxxxxx Funds
Per: /s/ X. Xxx Xxxxxxx
---------------------------------
Title: President
KPCB Java Fund
Per: /s/
---------------------------------
Title:
Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx VIII
Per: /s/
---------------------------------
Title:
KPCB VIII Founders Fund
Per: /s/
---------------------------------
Title:
Xxxxxxxx Partners II, LP
Per: /s/ Xxxxx Xxxxxxxxxx
---------------------------------
Title: General Partner
15
Xxxxx Xxxxxx
Per: /s/ Xxxxx Xxxxxx
---------------------------------
Title:
Woodland Partners
Per: /s/ Xxxxx Xxxxxxxxxx
---------------------------------
Title: General Partner
Xxxxx Xxxxxxxxx
Per: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Title:
Fidelity Investors II, LP
Per: /s/
---------------------------------
Title:
Blackfin Ventures, LLC
Per: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Title: Managing Member
Blackfin Ventures II, LLC
Per: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Title: Managing Member
The P/A Fund III, LP
Per: /s/
---------------------------------
Title:
APA Excelsior IV, LP
Per: /s/
---------------------------------
Title:
APA Excelsior IV/OffShore LP
Per: /s/
---------------------------------
Title:
16
Patricof Private Investment Club, LP
Per: /s/
---------------------------------
Title:
Presidio Venture Partners, LLC
Per: /s/
---------------------------------
Title:
Xxxxxx Xxx Xxxxxx
Per: /s/ Xxxxxx Xxx Xxxxxx
---------------------------------
Title:
Sequoia M&M LLC
Per: /s/
---------------------------------
Title:
Xxx Xxxxxxx Crossover Fund, LP
Per: /s/ Xxxxxx Xxxxxxx
-------------------------------
Title: Member
17
SCHEDULE "A"
NAME AND ADDRESSES OF INVESTORS
18
SCHEDULE "B"
FORM OF CERTIFICATE
In connection with our purchase of shares of the common stock
(the "securities") of WORKSTREAM INC. ("the Company"), we confirm that:
(a) we are authorized to acquire the securities;
(b) we are [an institution that is] an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
of 1933, as amended (the "U.S. Securities Act"), or if we are not an accredited
investor, we represent that our income and net worth are such that we are not
now, and do not contemplate that we will be, required to dispose of the
securities to satisfy any existing or expected undertaking or indebtedness. We
have such knowledge, sophistication and experience in financial and business
matters that we are capable of evaluating the merits and risks of the
prospective investment and have the ability to bear the economic risks of the
prospective investment and can afford the complete loss of such investment;
(c) we are acquiring the securities for our own account (or
for accounts as to which we exercise investment management discretion and have
authority to make the statements contained in this letter), and not with a view
to any resale, distribution or other disposition of the securities in any
transaction that would be in violation of the securities laws of the United
States or any state thereof, subject to the disposition of our property being at
all times within our control;
(d) we have been afforded the opportunity to obtain
information regarding the Company and the securities as we deem necessary;
(e) we understand that the securities have not been and will
not be registered under the U.S. Securities Act and we agree that we may offer,
sell or otherwise transfer such securities (other than pursuant to an effective
registration statement under the U.S. Securities Act) only if the securities are
sold in a transaction that does not require registration under the U.S.
Securities Act or any applicable United States state laws and regulations
governing the offer and sale of securities, and we have furnished to the Company
an opinion of counsel, reasonably satisfactory to the Company, to that effect;
(f) we understand and acknowledge that upon original issuance
and for such time as is required under applicable requirements of the U.S.
Securities Act or state securities laws, the certificates representing the
securities, and all certificates issued in exchange therefor or in substitution
thereof, shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, HAVE BEEN TAKEN FOR INVESTMENT AND
MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
APPLICABLE STATE WITH RESPECT TO THESE SHARES, IS THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT OR THE APPLICABLE STATE SECURITIES
LAWS ARE THEN IN FACT APPLICABLE TO THE OFFER OR SALE."
19
(g) the foregoing representations, warranties and undertakings
are made by us with the intent that they be relied upon in determining our
suitability to acquire securities and the undersigned hereby agrees that such
representations and warranties shall survive the acceptance by the Company of
this certificate and any issuance of securities. If any of the representations,
warranties or acknowledgements contained herein shall at any time become untrue,
we agree immediately to notify the Company in writing. We also agree that we may
not cancel, terminate or revoke this certificate.
________________________________
Name of Purchaser (please print)
Dated:
By: ____________________________
Name:
Title:
20
