Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of January
28, 2000, by and between C ME RUN CORP., a Delaware corporation ("C Me Run"),
and THOMSON KERNAGHAN & CO. LIMITED ("Stockholder").
WITNESSETH:
WHEREAS, C Me Run and Stockholder have entered into the Warrant
Agreement, dated as of January 28, 2000, (the "Warrant Agreement"; capitalized
terms used in this Agreement but not defined herein shall have the meanings
ascribed to thereto in the Warrant Agreement), which describes with greater
detail the transactions therein; and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Warrant Agreement that the parties hereto enter into this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. As used in this Agreement, the following terms shall
have the following respective meanings:
"Closing Date" means January 28, 2000.
"Commission" shall mean the United States Securities and Exchange
Commission or any other United States federal agency at the time
administering the Securities Act or the Exchange Act, as applicable,
whichever is the relevant statute.
"Common Stock" shall mean the common stock, par value $0.01 per
share, of C Me Run.
"Effectiveness Period" means the period from the Closing Date ending
on the date on which (A) a registration statement with respect to the
issuance or sale of such Registrable Securities shall have become
effective under the Securities Act and such Registrable Securities shall
have been issued or disposed of in accordance with such registration
statement, (B) such Registrable Securities have been sold or are available
for sale in a transaction which complies with the provisions of Rule
144(k) promulgated under the Securities Act, (C) such Registrable
Securities shall have been otherwise transferred, new certificates for
such Registrable Securities not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent
disposition of such Registrable Securities shall not be subject to
registration or qualification under the Securities Act or (D) such
Registrable Securities (including, but
not limited to, any securities issued or distributed in respect thereof by
way of a merger or other corporate reorganization of C Me Run) shall have
ceased to be outstanding.
"Electing Holder" shall mean any Holder of Registrable Securities
that has returned a completed and signed Notice and Questionnaire to the
Issuer in accordance with Section 2.01(e) hereof.
"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 amended
from time to time.
"Holder" shall mean the Stockholder or any transferees or assignees
thereof to whom the rights under this Agreement are assigned in accordance
with the provisions of Section 2.08 hereof.
"Notice and Questionnaire" means a Notice of Registration Statement
and Selling Securityholder Questionnaire substantially in the form of
Exhibit A hereto.
"Person" shall mean a corporation, association, partnership,
organization, group (as such term is used in Rule 13d-5 under the Exchange
Act), business, individual, government or political subdivision thereof,
governmental agency or other entity.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect of the terms of the offering of any security of C Me Run covered
by such Registration Statement and all other amendments or supplements to
the prospectus, including post-effective amendments, and all material
incorporated, or deemed to be incorporated, by reference in such
prospectus.
"Registration Expenses" shall mean all expenses incurred in order to
comply with Sections 2.01 and 2.02 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and
disbursements of counsel for C Me Run, reasonable fees and disbursements
of one (1) counsel for the holders, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such
registration, but excluding the compensation of regular employees of C Me
Run (which shall be paid in any event by C Me Run) and excluding Selling
Expenses.
"Registrable Securities" shall mean (a) any options, warrants or
convertible preferred stock issued to a Stockholder pursuant to the
Warrant Agreement, (b) any shares of Common Stock issued to a Stockholder
pursuant to the Warrant Agreement, (c) shares of Common Stock underlying
any options, warrants or convertible preferred stock issued to a
Stockholder pursuant to the Warrant Agreement and (d) all securities which
may be issued or distributed in respect thereof by way of stock dividend
or stock split or other distribution, recapitalization or reclassification
or by way of a merger or other corporate reorganization of C Me Run. For
purposes of this Agreement, any Registrable
Securities shall cease to be Registrable Securities at the end of the
Effectiveness Period for such Registrable Securities.
"Registration Statement" shall mean any registration statement under
the Securities Act filed by C Me Run, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated, or deemed to be incorporated, by reference in such
registration statement.
"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 amended
from time to time.
ARTICLE II
AGREEMENTS IN RESPECT OF THE REGISTRABLE SECURITIES
SECTION 2.01. Shelf Registration. (a) Subject to Section 2.01(c),
and further subject to the availability of Form S-3 to C Me Run, C Me Run shall,
on or prior to the later of April 19, 2000 or 20 days after the execution of the
Warrant Agreement (such later date being the "Registration Date") to register
the Registrable Securities, file with the Commission a Registration Statement on
Form S-3 (a "Shelf Registration Statement") providing for an offering to be made
on a continuous basis pursuant to Rule 415 under the Securities Act relating to
the offer and sale of the Registrable Securities by the Holders and, thereafter,
shall use its reasonable best efforts to cause such Shelf Registration Statement
to be declared effective under the Securities Act as soon as reasonably
practicable after the filing thereof; provided, however, that no Holder shall be
entitled to have the Registrable Securities held by it covered by such Shelf
Registration Statement unless such Holder is an Electing Holder.
(b) Subject to Section 2.01(c), C Me Run shall use its reasonable
best efforts:
(i) To keep the Shelf Registration Statement continuously effective
in order to permit the Prospectus forming part thereof to be usable by
Electing Holders for a period of two years after the Shelf Registration
Statement is declared effective or such shorter period that will terminate
when there are no Registrable Securities outstanding (in either case, such
period being referred to herein as the "Effectiveness Period"); and
(ii) After the Effective Time of the Shelf Registration Statement,
promptly upon the request of any Holder of Registrable Securities that is
not then an Electing Holder, to take any action reasonably necessary to
enable such Holder to use the Prospectus forming a part thereof for offers
and resales of Registrable Securities, including, without limitation, any
action reasonably necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement.
(c) Notwithstanding anything to the contrary contained in this
Agreement, C Me Run shall be entitled, from time to time by providing written
notice to the Holders, to require the Holders to suspend the use of the
Prospectus for sales of Registrable Securities under the Shelf Registration
Statement for a reasonable period of time not to exceed 60 days in succession or
60 days in the aggregate in any twelve month period (a "Suspension Period") if C
Me Run shall determine that it is required to disclose in the Shelf Registration
Statement a financing, acquisition, corporate reorganization or other similar
corporate transaction or other material event or circumstance affecting C Me Run
or its securities, and that such disclosure of such information at such time
would be seriously detrimental to C Me Run and its stockholders. Immediately
upon receipt of such notice, the Electing Holders shall suspend the use of the
Prospectus until requisite changes to the Prospectus have been made as required
below. Any Suspension Period shall terminate at such time as the public
disclosure of such information. After the expiration of any Suspension Period
and without any further request from a Holder, C Me Run shall as promptly as
reasonably practicable prepare a post-effective amendment or supplement to the
Shelf Registration Statement or the Prospectus, or any document incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) After the Effective Time of the Shelf Registration Statement, C
Me Run shall, upon the request of any Holder of Registrable Securities that is
not then an Electing Holder, as promptly as practicable, send a Notice and
Questionnaire to such Holder. Following its receipt of such Notice and
Questionnaire, C Me Run will as promptly as practicable include the Registrable
Securities covered thereby in the Shelf Registration Statement (if not
previously included).
(e) If (i) on or prior to the 30th day following the Registration
Date, C Me Run has not filed with the Commission a Shelf Registration Statement
with respect to the Registrable Securities or (ii) on or prior to the 120th day
following the Registration Date the Shelf Registration Statement, if previously
filed, has not been declared effective by the Commission (each, a "Registration
Default"), C Me Run shall be required to pay liquidated damages ("Liquidated
Damages"), from and including the day following such Registration Default until
the Shelf Registration Statement is either declared effective or so filed and
subsequently declared effective, as applicable; provided, however, that C Me Run
shall not be required to pay Liquidated Damages after the completion of the
Effectiveness Period with respect to such Registrable Securities. Such
Liquidated Damages shall be paid monthly in arrears on the first day of each
month and on the first business day after the Shelf Registration Statement has
been declared effective, with the first such payment due on the first such day
immediately after the occurrence of such Registration Default, and will accrue
at a rate of one percent (2%) per month of the product of the number of
Registrable Securities then held by such Holder multiplied by the price paid to
C Me Run by the initial for each such Registrable Security. In the event the
Shelf Registration Statement ceases to be effective (or the Holder is otherwise
prevented or restricted by C Me Run from effecting sales pursuant thereto,
including pursuant to Section 2.01(c)) for more than 60 days, whether or not
consecutive, during any twelve-month period (an
"Effective Failure"), then C Me Run shall pay Liquidated Damages until such
Effective Failure is cured in the amount of and in the manner as described
above. For the purposes of determining an Effective Failure, days on which C Me
Run has been obligated to pay liquidated damages in accordance with the
foregoing in respect of a prior Effective Failure within the applicable
twelve-month period shall not be included. The parties hereto agree that the
Liquidated Damages provided for in this Section 2.01(e) constitute a reasonable
estimate of the damages that will be suffered by the Holder by reason of the
failure to file a Shelf Registration Statement, the failure of a Shelf
Registration Statement to be declared effective or the failure of a Registration
Statement to remain effective, as the case may be, in accordance with this
Agreement. The Liquidated Damages set forth in this Section 2.01(e) shall be the
exclusive monetary remedy available to the Holder for such Registration Default
or Effective Failure.
SECTION 2.02. Incidental Registration. If, at any time following the
Effective Time, C Me Run proposes to file a Registration Statement other than
the Shelf Registration Statement (an "Incidental Registration") under the
Securities Act with respect to an offering of Common Stock (i) for its own
account (other than a Registration Statement on Form S-4 or S-8 (or any filing
on any substitute form that may be adopted by the Commission for a transaction
for which Form S-4 or S-8 is currently available)) or (ii) the account of any
holder of Common Stock, C Me Run shall give written notice of such proposed
filing (including the proposed date thereof) to the Holders as soon as
practicable, but in any event not less than 30 days before the anticipated
filing date and such notice shall offer each Holder the opportunity to register
such number of Registrable Securities as such Holder shall request. Upon the
written direction of any such Holder (which direction shall specify the number
of Registrable Securities intended to be disposed of by any Holder), given
within 20 days following the receipt by the Holders of any such written notice,
C Me Run shall use its reasonable best efforts to cause to be registered under
the Securities Act all of the Registrable Securities that each such Holder has
requested to be registered; provided, that, if C Me Run does not file such
registration statement by the proposed filing date, C Me Run shall again comply
with the notice provisions of this Section 2.02 prior to filing such
registration statement. Notwithstanding anything contained herein, if the lead
underwriter of an offering involving an Incidental Registration notifies C Me
Run that the inclusion of such Registrable Securities would (i) materially and
adversely affect the price of the Common Stock to be offered or (ii) result in a
greater amount of Common Stock being offered than the market could reasonably
absorb, then the number of Registrable Securities to be registered by Holders
shall be reduced to the extent that, in the lead underwriter's reasonable
judgment, neither of the effects in the foregoing clauses (i) and (ii) would
result from the number of shares of Common Stock proposed to be issued by C Me
Run. Any reduction in the amount of a Holder's Registrable Securities to be
included in an Incidental Registration shall be made on a pro rata basis with
other holders of registration rights participating in such Incidental
Registration.
SECTION 2.03. Underwriting Requirements. In connection with any
underwritten offering, C Me Run shall not be required under Section 2.02 of this
Agreement to include shares of Registrable Securities in such underwritten
offering unless the holder of such shares of Registrable Securities accepts the
terms of the underwriting of such offering that have been reasonably agreed upon
between C Me Run and the underwriters selected by C Me Run.
SECTION 2.04. Registration Procedures. (a) In connection with either
the Shelf Registration Statement or an Incidental Registration, and in
accordance with the intended method or methods of distribution of the
Registrable Securities as described in such registration, C Me Run shall, as
soon as reasonably practicable (and, in any event, subject to the terms of this
Agreement, at or before the time required by applicable laws and regulations):
(i) prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities and use its best efforts to
cause such Registration Statement to become and remain effective for the
period of the distribution contemplated;
(ii) promptly 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 comply with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement;
(iii) furnish to each Holder of Registrable Securities included in
such registration such numbers of copies of the Registration Statement and
the Prospectus included therein (including each preliminary prospectus and
any amendments or supplements thereto), in conformity with the
requirements of the Securities Act and such other documents and
information as they may reasonably request;
(iv) use its reasonable best efforts to register or qualify the
Registrable Securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdiction within the United
States and Puerto Rico as shall be reasonably appropriate for the
distribution of the Registrable Securities covered by the Registration
Statement; provided, however, that C Me Run shall not be required in
connection therewith or as a condition thereto to qualify to do business
in or to file a general consent to service of process in any jurisdiction
wherein it would not but for the requirements of this paragraph (iv) be
obligated to do so; and provided, further, that C Me Run shall not be
required to qualify such Registrable Securities in any jurisdiction in
which the securities regulatory authority requires that a Holder submit
any of its Registrable Securities to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent to
sell Registrable Securities in such jurisdiction unless such Holder agrees
to do so;
(v) promptly notify each Holder of Registrable Securities included
in such registration, at any time when a Prospectus relating to the
Registrable Securities is required to be delivered under the Securities
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 any material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made,
and at the request of a Holder of Registrable Securities included in such
registration promptly prepare and furnish to such
Holder a reasonable number of copies of a supplement to or an amendment of
such Prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made;
(vi) furnish, to the Holders (A) at the effective date of the Shelf
Registration Statement and (B) in connection with an Incidental
Registration, if the method of distribution is by means of an
underwriting, on the date that the Registrable Securities are delivered to
the underwriters for sale pursuant to such registration, or if such
Registrable Securities are not being sold through underwriters, on the
date that the Registration Statement with respect to such Registrable
Securities becomes effective, (x) a signed opinion, dated such date, of
the independent legal counsel representing C Me Run for the purpose of
such registration, addressed to the underwriters, if any, and if such
Registrable Securities are not being sold through underwriters, then to
the Holders, as to such matters as such underwriters or the Holders, as
the case may be, may reasonably request and as would be customary in an
underwritten distribution; and (y) letters dated such date and the date
the offering is priced from the independent certified public accountants
of C Me Run, addressed to the underwriters, if any, and if such
Registrable Securities are not being sold through underwriters, then to
the Holders and, if such accountants refuse to deliver such letters to the
Holders, then to C Me Run (1) stating that they are independent certified
public accountants within the meaning of the Securities Act and that, in
the opinion of such accountants, the financial statements and other
financial data of C Me Run included in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act and (2) covering such other financial matters (including
information as to the period ending not more than five business days prior
to the date of such letters) with respect to the registration in respect
of which such letter is being given as such underwriters or the Holders,
as the case may be, may reasonably request and as would be customary in an
underwritten distribution.
(vii) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable
Securities to be so included in the Registration Statement;
(viii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, but not later
than eighteen months after the effective date of the Registration
Statement, an earnings statement covering the period of at least twelve
months beginning with the first full month after the effective date of
such Registration Statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(ix) use its reasonable best efforts to list the Common Stock
covered by such Registration Statement with any securities exchange on
which the Common Stock are then listed.
(b) Each Holder participating in a registration shall furnish to C
Me Run in writing such information regarding such Holder and its intended method
of distribution of the Registrable Securities as C Me Run may from time to time
reasonably request in writing, but only to the extent that such information is
required in order for C Me Run to comply with its obligations under all
applicable securities and other laws and to ensure that the Prospectus relating
to such Registrable Securities conforms to the applicable requirements of the
Securities Act and the rules and regulations thereunder. Each Holder shall
notify C Me Run as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to C Me Run or of the occurrence
of any event, in either case as a result of which any Prospectus relating to the
Registrable Securities contains or would contain an untrue statement of a
material fact regarding such Holder or its intended method of distribution of
such Registrable Securities or omits to state any material fact regarding such
Holder or its intended method of distribution of such Registrable Securities
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
promptly furnish to C Me Run any additional information required to correct and
update any previously furnished information, or required so that such prospectus
shall not contain, with respect to such Holder or the intended method of
distribution of the Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
SECTION 2.05. Registration Expenses. All expenses incurred in
connection with all registrations pursuant to Section 2.01 and Section 2.02 of
this Agreement, excluding underwriters' discounts and commissions and any stamp
or transfer tax or duty, but including without limitation all registration,
filing and qualification fees, word processing, duplicating, printers' and
accounting fees (including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance), fees of the
National Association of Securities Dealers, Inc. or listing fees, messenger and
delivery expenses, all fees and expenses of complying with state securities or
blue sky laws, reasonable fees and disbursements of one counsel chosen by the
Holders and fees and disbursements of counsel for C Me Run incurred in
connection with each registration shall be paid by C Me Run. Each Holder
participating in a registration shall bear and pay the underwriting commissions
and discounts and any stamp or transfer tax or duty and the fees and
disbursements of such counsel for such Holder other than the one counsel
referred to above applicable to securities offered for its account in connection
with any registrations, filings and qualifications made pursuant to this
Agreement.
SECTION 2.06. Indemnification; Contribution.
(a) Indemnification by C Me Run. C Me Run shall, and it hereby
agrees to, indemnify and hold harmless each Holder, such Holder's directors and
officers, each person, if any, who controls, is subject to control of or who is
in common control with such Holder (an "Affiliate"), and each person who
participates as a placement or sales agent or as an underwriter (within the
meaning of the Securities Act) in any offering or sale of Registrable
Securities, against any losses, claims, damages or liabilities ("Losses") to
which such Holder, Affiliate, agent or underwriter may become subject under
Securities Act or otherwise, insofar as such Losses (or actions or proceedings
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus contained therein or arise out of or are based upon any
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 C
Me Run shall, and it hereby agrees to, reimburse such Holder or any such
Affiliate, agent or underwriter for any legal or other out-of-pocket expenses
reasonably incurred by them (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such action,
proceeding or claim; provided, however, that the indemnity agreement contained
in this Section 2.06(a) shall not apply to amounts paid in settlement of any
such Loss or action if such settlement is effected without the consent of C Me
Run which consent shall not be unreasonably withheld; provided, further, that C
Me Run shall not be liable to any such person in any such case to the extent
that any such Loss or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus contained therein, in reliance upon and in
conformity with written information furnished to C Me Run by such Holder or any
Affiliate, agent, underwriter or representative of such Holder expressly for use
therein, or by such Holder's failure to furnish C Me Run, upon request, with the
information with respect to such Holder, such Holder's directors and officers,
or any agent, underwriter or representative of such Holder, or such Holder's
intended method of distribution, that is the subject of the untrue statement or
omission or if the C Me Run shall sustain the burden of proving that such
Holder, such Holder's directors and officers, or such agent or underwriter sold
securities to the person alleging such Loss without sending or giving, at or
prior to the written confirmation of such sale, a copy of the applicable
Prospectus (excluding any documents incorporated by reference therein) or of the
applicable Prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein) if C Me Run had previously furnished copies
thereof to such Holder or such agent or underwriter, and such Prospectus
corrected such untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement.
(b) Indemnification by Holders. Each Holder participating in a
registration pursuant to this Agreement shall severally and not jointly
indemnify and hold harmless C Me Run, each of its directors and officers, each
person, if any, who controls the C Me Run within the meaning of the Securities
Act, and each agent and any underwriter for the C Me Run (within the meaning of
the Securities Act) against any Losses, joint or several, to which the C Me Run
or any such director, officer, controlling person, agent or underwriter may
become subject, under
the Securities Act or otherwise, insofar as such Losses (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such Registration Statement
on the effective date thereof (including any Prospectus filed under Rule 424
under the Securities Act or any amendments or supplements thereto) 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, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement or Prospectus, or amendments or
supplements thereto, 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 Statement or Prospectus, or by such Holder's failure to
furnish the C Me Run, upon request, with the information with respect to such
Holder, such Holder's directors and officers, or any agent, underwriter or
representative of such Holder, or such Holder's intended method of distribution,
that is the subject of the untrue statement or omission; and such Holder shall
reimburse any legal or other expenses reasonably incurred by the C Me Run or any
such director, officer, controlling person, agent or underwriter (but not in
excess of expenses incurred in respect of one counsel for all of them unless
there is an actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in connection with
investigating or defending any such Loss or action; provided, however, that the
indemnity agreement contained in this Section 2.06(b) shall not apply to amounts
paid in settlement of any such Loss or action if such settlement is effected
without the consent of the Holder which consent shall not be unreasonably
withheld.
(c) Notice of Claims. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action or proceeding for which indemnification under subsection (a) or (b) may
be requested, such indemnified party shall, without regard to whether a claim in
respect thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of, or as contemplated by, this Section 2.06, notify
such indemnifying party in writing of the commencement of such action or
proceeding; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party in
respect of such action or proceeding on account of the indemnification
provisions of or contemplated by Section 2.06(a) or Section 2.06(b) hereof
unless the indemnifying party was materially prejudiced by such failure of the
indemnified party to give such notice, and in no event shall such omission
relieve the indemnifying party from any other liability it may have to such
indemnified party. In case any such action or proceeding shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall determine, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation (unless such indemnified party reasonably
objects to such assumption on the grounds that there may be defenses available
to it which are different from or in addition to the defenses available to such
indemnifying party, in
which event the indemnified party shall have the right to control its defense
and shall be reimbursed by the indemnifying party for the expenses incurred in
connection with retaining separate counsel). If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel (in addition to
local counsel) for each indemnified party with respect to such claim. The
indemnifying party will not be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld or
delayed. No indemnifying party will consent to entry of any judgment or enter
into any settlement agreement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation.
(d) Contribution. Each Holder participating in a registration
pursuant to this Agreement and the C Me Run agree that if, for any reason, the
indemnification provisions contemplated by Section 2.06(a) or Section 2.06(b)
hereof are unavailable to or are insufficient to hold harmless an indemnified
party in respect of any Losses (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses (or actions
or proceedings in respect thereof) in such proportion as is appropriate to
reflect the relative fault of, and benefits derived by, the indemnifying party
and the indemnified party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 2.06(d) were determined
(i) by pro rata allocation (even if the Holder or any agents for, or
underwriters of, the Registrable Securities, or all of them, were treated as one
entity for such purpose); or (ii) by any other method of allocation which does
not take account of the equitable considerations referred to in this Section
2.06(d). The amount paid or payable by an indemnified party as a result of the
Losses (or actions or proceedings in respect thereof) referred to above shall be
deemed to include (subject to the limitations set forth in Section 2.06(c)
hereof) any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action,
proceeding or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) Beneficiaries of Indemnification. The obligations of the C Me
Run under this Section 2.06 shall be in addition to any liability that it may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director, partner and member of each Holder requesting or joining in a
registration pursuant to this Agreement and each agent and underwriter of the
Registrable Securities and each person, if any, who controls such Holder or any
such agent or underwriter within the meaning of the Securities Act; and the
obligations of such Holder and any agents or underwriters contemplated by this
Section 2.06 shall be in addition to any liability that such Holder or its
respective agent or underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of C Me Run (including
any
person who, with his consent, is named in any Registration Statement as about to
become a director of the C Me Run) and to each person, if any, who controls C Me
Run within the meaning of the Securities Act.
SECTION 2.07. Termination of Registration Rights. Notwithstanding
any other provisions of this Agreement to the contrary, the registration rights
granted pursuant to this Agreement shall terminate on the earlier of: (i) if C
Me Run has not exercised rights to declare Suspension Periods pursuant to
Section 2.01(c) hereof then on the second anniversary of the effective date of
the Shelf Registration Statement; or (ii), if C Me Run has exercised rights to
declare Suspension Periods pursuant to Section 2.01(c) hereof, on the date which
is the number of days after the second anniversary of the effective date of the
Shelf Registration Statement equal to the aggregate number of days of the
duration of all Suspension Periods pursuant to Section 2.01(c) hereof.
SECTION 2.08. Transfer of Registration Rights. Any Stockholder may
transfer its rights under this Agreement in connection with any transfer of
Registrable Securities effected in compliance with applicable law.
SECTION 2.09. Public Information. C Me Run covenants to make
available "adequate current public information" concerning C Me Run within the
meaning of Rule 144(c) under the Securities Act so long as any Holder holds any
Registrable Securities.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Expenses. Except as otherwise specified in this
Agreement, all Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Sections 2.01 or 2.02
shall be borne by C Me Run and all Selling Expenses in connection with such
registration, qualification or compliance shall be borne by the holders of the
securities so registered pro rata on the basis of the number of shares so
registered.
SECTION 3.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by commercial delivery service, or mailed by registered or certified mail
(return receipt requested) or sent via facsimile (with acknowledgment of
complete transmission) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to C Me Run:
C Me Run Corp.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy (which shall not constitute notice to C Me Run) to:
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
(a) if to the Stockholder:
Thomson Kernaghan & Co. Limited
000 Xxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxxx XxXxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to Stockholder) to:
Xxxx X. Xxxx, Esq.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
SECTION 3.03. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 3.04. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
parties hereto or (b) by a waiver in accordance with Section 3.05 of this
Agreement.
SECTION 3.05. Waiver. Any party to this Agreement may as to it (a)
extend the time for the performance of any obligations or other acts of any
other party hereto or (b) waive compliance with any agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby. Any waiver
of any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or as a waiver of
any
other term or condition, of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any of such rights.
SECTION 3.06. Survival. The several indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
and made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any party, any director or officer of such party, or any controlling person of
any of the foregoing, and shall survive the transfer of any Registrable
Securities by the Stockholder, and the indemnification and contribution
provisions set forth in Section 2.06 hereof shall survive termination of this
Agreement.
SECTION 3.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart.
SECTION 3.08. Entire Agreement; Assignment. This Agreement, the
schedules and Exhibits hereto, and the documents and instruments and other
agreements among the parties hereto referenced herein: (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; and (b) shall not be
assigned by operation of law or otherwise except as otherwise specifically
provided.
SECTION 3.09. Severability. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. The parties further agree to negotiate
in good faith to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such void or
unenforceable provision.
SECTION 3.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Each of the parties hereto agrees that process may be served upon
them in any manner authorized by the laws of the State of New York for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction and such process.
SECTION 3.11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized or in their individual capacities, as applicable.
C ME RUN CORP.
By:
----------------------------------------
Name:
Title:
THOMSON KERNAGHAN & CO. LIMITED
By: /s/ ILLEGIBLE
----------------------------------------
Name:
Title:
SECTION 3.11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized or in their individual capacities, as applicable.
C ME RUN CORP.
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Title: President
THOMSON KERNAGHAN & CO. LIMITED
By:
----------------------------------------
Name:
Title:
Exhibit A
C ME RUN CORP.
Notice of Registration Statement and
Selling Securityholder Questionnaire
(Date)
C ME RUN CORP. (the "Company") has filed or intends shortly to file with
the United States Securities and Exchange Commission (the "Commission") a
registration statement (the "Shelf Registration Statement") for the registration
and resale under the United States Securities Act of 1933, as amended (the
"Securities Act"), of Common Stock, par value $0.01 per share, and any other
securities of the Company, in accordance with the terms of the Registration
Rights Agreement dated January 28, 2000 (the "Registration Rights Agreement")
among the Company and THOMSON KERNAGHAN & CO. LIMITED (the "Stockholder"). A
copy of the Registration Rights Agreement is attached hereto.
All capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf Registration
Statement (or a supplement or amendment thereto), this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire")
must be completed, executed and delivered to the Company at the address set
forth herein for receipt on or before [INSERT DATE] (the "Questionnaire
Deadline"). Unless the Company otherwise consents, beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling securityholders in
the Shelf Registration Statement (or a supplement or amendment thereto) and
related Prospectus and (ii) may not sell their Registrable Securities pursuant
thereto. Beneficial owners of Registrable Securities not having returned a
Notice and Questionnaire by the Questionnaire Deadline may, however, receive
another Notice and Questionnaire from the Company upon request. Following its
receipt of a completed Notice and Questionnaire in return, the Company will
promptly include the Registrable Securities covered thereby in the Shelf
Registration Statement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, Holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
