EXHIBIT 4.1
[LOGO APPEARS HERE]
REGISTRATION RIGHTS AGREEMENT (2000)
March 30, 2000
REGISTRATION RIGHTS AGREEMENT (2000)
THIS AGREEMENT, dated as of March 30, 2000 is made between Ironside
Technologies Inc. (the "Company"), AIG Global Investment Group, Inc., Beamscope
Canada Inc., Canadian Imperial Bank of Commerce, X.X. Xxxxxxxxx Fund Inc.,
Xxxxxxxxx Fund II Inc., Damac Investors Inc., Damac Investors III Inc., Euclid
Partners V, L.P., GE Capital Equity Holdings B.V., River Cities Capital Group II
L.P., The VenGrowth Investment Fund Inc., Working Ventures Canadian Fund Inc.,
CI Mutual, Cypress Partners, Xxxxxxx, Xxxxxxx & Co., RBIM, RT Capital
Management, TAL, TD Asset Management I, TD Asset Management II, Xxxxx Lenders
and Triax (collectively, the "Shareholders"). Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 10 hereof.
In connection with the issuance of 16,630,212 Class B Shares, the
Corporation granted holders of such shares certain registration rights pursuant
to Registration Rights Agreement dated September 18, 1998 between the Company,
GE Capital Equity Holdings B.V., Euclid Partners V, L.P., Beamscope Canada Inc.
and Working Ventures Canadian Fund Inc. (the "1998 Registration Rights
Agreement"). As of October 14, 1999, the Company issued 34,274,127 Class C
Shares pursuant to and on the terms and conditions set forth in the 1999
Subscription Agreements (as such term is defined in the Amended and Restated
Unanimous Shareholders' Agreement dated October 14, 1999) and granted certain
registration rights to the holders of such shares (the "1999 Registration Rights
Agreement"). As of the date hereof, the Company has issued 10,493,386 Class D
Shares, pursuant to the terms and conditions set forth in the 2000 Subscription
Agreements (as such term is defined in the Second Amended and Restated Unanimous
Shareholders' Agreement dated March 30, 2000) and desires to grant certain
registration rights to the holders of such shares. In consideration of the
foregoing, and the agreements entered into in connection with the investment by
the Shareholders, the parties hereto agree as follows:
Section 1 Demand Registrations.
(1) Requests for Registration. At any time after the earlier of six months
following a QIPO and March 30, 2003 or at any time prior to either of such
dates if the anticipated offering price (net of underwriting discounts and
commissions) would exceed U.S.$30 million, a Class C Majority and a Class D
Majority may request in writing (i) registration under the U.S. Securities
Act of all or a part, but in any event not less than 50%, of the
Registrable Securities held by such Shareholders (A) on Form S-1 or any
similar long-form registration ("U.S. Long-Form Registration") or (B) if
available, on Form S-2 or S-3 or any similar short-form registration ("U.S.
Short-Form Registration") and (ii) qualification for distribution of all or
part of its Registrable Securities or qualification of the conversion of
all or part of its Class C Shares and Class D Shares, in each case, by
prospectus filed under the Canadian Securities Laws by (A) long-form
prospectus in each of the provinces of Canada in which holders of
Registrable Securities reside ("Canadian Long-Form Registration"; a
Canadian Long-Form Registration together with a U.S. Long-Form Registration
are sometimes referred to herein as a "Long-Form Registration") or (B) if
available,
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short-form prospectus in each of the provinces in Canada in which holders
of Registrable Securities reside under the shelf system rules for the
pricing of offerings after the prospectus is receipted or otherwise
("Canadian Short-Form Registration"; Canadian Short-Form Registration
together with a U.S. Short-Form Registration are sometimes referred to
herein as "Short-Form Registration"). Each request for a Demand
Registration (defined below) shall specify the approximate number of
Registrable Securities requested to be registered or qualified, as the case
may be, and the anticipated per share price range for such offering.
Promptly after receipt of any such request, the Company will give written
notice of such requested registration or qualification to all other holders
of Registrable Securities and, subject to Section 1(5) below, will include
in such registration or prospectus all Registrable Securities with respect
to which the Company has received written requests for inclusion therein
within 15 days after the receipt of the Company's notice. All registrations
and qualifications requested pursuant to this Section 1(1) are referred to
herein as "Demand Registrations."
(2) Long-Form Registration. Subject to Section 1(5) below, a Class C Majority
and a Class D Majority will be entitled to request two Long-Form
Registrations in which the Company will pay all Registration Expenses. A
registration will not count as one of the Long-Form Registrations permitted
hereunder until it has become effective or final, and the last Long-Form
Registration will not count as one of the Long-Form Registrations permitted
hereunder unless the holders of Registrable Securities requesting such
qualification have been able to register or qualify and sell at least 75%
of the Registrable Securities initially requested to be registered or
qualified by such holders, provided that, in any event, to the fullest
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extent permitted by applicable law, the Company will pay all Registration
Expenses in connection with any registration or prospectus initiated as a
Long-Form Registration whether or not it has become effective or final. All
Long-Form Registrations shall be underwritten registrations.
(3) Short-Form Registration. Subject to Section 1(5) below, in addition to the
Long-Form Registrations provided pursuant to Section 1(2), if the
anticipated offering price (net of underwriting discounts and commissions)
would exceed U.S.$5 million, a Class C Majority and a Class D Majority will
be entitled to request (i) two Short-Form Registrations in which the
Company will pay all Registration Expenses and (ii) an unlimited number of
Short-form Registrations in which the Company shall not be required to pay
Registration Expenses. A registration will not count as one of the Short-
Form Registrations permitted pursuant to Section 1(3)(i) above until it has
become effective or final, provided that, in any event, the Company will
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pay all Registration Expenses in connection with any registration or
prospectus initiated as a Short-Form Registration whether or not it has
become effective or final.
(4) Priority on Demand Registrations. The Company will not include in any
Demand Registration any securities that are not Registrable Securities
without the prior written consent of a Class C Majority and a Class D
Majority. If a Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing
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that in their opinion the number of Registrable Securities, and, if
permitted hereunder, other securities requested to be included in such
offering exceeds the number of Registrable Securities and other securities,
if any, which can be sold therein without adversely affecting the
marketability of the offering, the Company will include in such offering
prior to the inclusion of any securities which are not Registrable
Securities the number of Registrable Securities requested to be included
which in the opinion of such underwriters can be sold without adversely
affecting the marketability of the offering, pro rata among the respective
holders thereof on the basis of the aggregate number of Registrable
Securities owned by each such holder.
(5) Restrictions on Demand Registrations. The Company will not be obligated to
effect any Demand Registration within six (6) months after the effective
date or date of final receipt of a previous Long-Form Registration.
Following the completion of a QIPO, the Company will not be obligated to
effect any Demand Registration in Canada at any time after the Registrable
Securities are freely-tradeable in Ontario. For greater certainty, it is
understood and agreed that following the completion of a QIPO in the United
States, the Company will be obligated to effect Demand Registrations in the
United States pursuant to the terms of this Agreement notwithstanding the
fact that the Registrable Securities are freely-tradeable in Ontario. The
Company may postpone for a reasonable period of time not to exceed six (6)
months the filing of a prospectus or the effectiveness of a Registration
Statement for a Demand Registration if the Company concludes, following
consultation with, and after obtaining the good faith approval of, the
board of directors of the Company, that such Demand Registration would
reasonably be expected to have a material adverse effect on any proposal or
plan by the Company to engage in any acquisition of assets (other than in
the ordinary course of business) or any merger, amalgamation,
consolidation, tender offer or similar transaction or otherwise would have
a material adverse effect on the business, assets, operations, prospects or
financial or other condition of the Company; provided, however, that in
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such event, the holders of a majority of Registrable Securities requesting
such Demand Registration will be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration will not count as one
of the permitted Demand Registrations hereunder and the Company will pay,
to the fullest extent permitted by applicable law, all Registration
Expenses in connection with such registration or prospectus.
(6) Selection of Underwriters. On any Demand Registration, a Class C Majority
and a Class D Majority will have the right to select the investment
banker(s) and manager(s) to administer the offering, subject to the
Company's approval which will not be unreasonably withheld or delayed.
(7) Other Registration Rights. Except as provided in this Agreement, the
Company will not grant to any holder or prospective holder of any
securities of the Company registration rights with respect to such
securities which are senior or pari passu to the rights granted hereunder
without the prior written consent of a Class C Majority and a Class D
Majority.
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Section 2 Piggyback Registrations.
(1) Right to Piggyback. Whenever the Company proposes to register or qualify
for distribution by prospectus any of its securities under any Relevant Act
(other than pursuant to a Demand Registration or a registration under the
U.S. Securities Act on Form S-4 or S-8 or any successor or similar forms)
and the registration form or prospectus to be filed may be used for the
registration or qualification for distribution of Registrable Securities (a
"Piggyback Registration"), whether or not for sale for its own account, the
Company will give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration or file such
prospectus and will include in such registration or qualification all
Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of
the Company's notice. Any holder of Registration Securities that has given
such a written request may withdraw its Registrable Securities from the
related Piggyback Registration by giving written notice to the Company and
the managing underwriter, if any, on or before the 30th day prior to the
planned effective date of the related Piggyback Registration.
(2) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations whether or not any registration or prospectus has become
effective or final.
(3) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration or distribution by prospectus on behalf
of the Company, and the managing underwriters advise the Company in writing
(with a copy to each party hereto requesting registration or qualification
for distribution by prospectus of Registrable Securities) that in their
opinion the number of securities requested to be included in such
registration or prospectus exceeds the number which can be sold in such
offering without adversely affecting the marketability of such offering,
the Company will include in such registration or prospectus (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such registration or prospectus, pro
rata among the holders of such Registrable Securities on the basis of the
number of Registrable Securities owned by each such holder and (iii) third,
other securities requested to be included in such registration or
prospectus. The Company shall have the right to terminate or withdraw any
registration initiated by it under this paragraph prior to the
effectiveness of such registration, whether or not any Shareholder has
elected to include securities in such registration, and except pursuant to
Section 2(b) the Company shall have no liability to any of the Shareholders
in connection with such termination or withdrawal.
(4) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration or distribution by prospectus on behalf
of holders of the Company's securities, and the managing underwriters
advise the Company in writing that in their opinion the number of
securities requested to be included in such registration or qualification
for distribution by prospectus exceeds the number which
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can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include in such registration or
prospectus (i) first, the securities requested to be included therein by
the holders requesting such registration and the Registrable Securities
requested to be included in such registration or prospectus, pro rata among
the holders of such securities on the basis of the number of securities so
requested to be included therein owned by each such holder and (ii) second,
other securities requested to be included in such registration or
prospectus.
(5) Other Registrations. If the Company has previously filed a Registration
Statement with respect to Registrable Securities pursuant to Section 1 or
pursuant to Section 2, and if such previous registration or offering by
prospectus has not been withdrawn or abandoned, the Company will not file
or cause to be effected any other registration or prospectus of any of its
equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Relevant Act (except under
the U.S. Securities Act on Form S-4 or S-8 or any successor or similar
forms), whether on its own behalf or at the request of any holder or
holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous registration or date the
previous prospectus became final.
Section 3 Holdback Agreements.
(1) To the extent not inconsistent with applicable law, each holder of
Registrable Securities agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144 of the U.S. Securities Act) of equity
securities of the Company, or any securities, options or rights convertible
into or exchangeable or exercisable for such securities, during the seven
days prior to, and the 180-day period beginning on, the effective date of
or date of the final receipt for any underwritten Demand Registration or
underwritten Piggyback Registration (except as part of such underwritten
registration), unless the underwriters managing the registered public
offering otherwise agree. This provision shall not restrict the ability of
any holder of Registrable Securities to make a transfer permitted by the
Shareholders Agreement, so long as such transferees agree to be bound by
the provisions of this Section 3.
(2) The Company agrees (i) not to effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during
the 180-day period beginning on the effective date of or date of the final
receipt for any underwritten Demand Registration or underwritten Piggyback
Registration (except as part of such underwritten offering or pursuant to
registrations under the U.S. Securities Act on Form S-4 or S-8 or any
successor or similar forms), unless the underwriters managing the public
offering otherwise agree, and (ii) to use its best efforts to cause each
holder of its Common Shares, or any securities convertible into or
exchangeable or exercisable for Common Shares, purchased from the Company
at any time after the date of this Agreement (other than in a public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144 of the U. S. Securities Act) of any such
securities during such period (except as part of such underwritten
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offering, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.
Section 4 Registration Procedures.
Subject to Section 1(5), whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered or qualified for
distribution by prospectus pursuant to this Agreement, the Company will use its
best efforts to effect the registration and file a prospectus and obtain a final
receipt therefor, and to effect the sale of such Registrable Securities in
accordance with the intended method of disposition thereof (including the
registration or qualification for distribution of Common Shares held by a holder
of Registrable Securities requesting registration or qualification as to which
the Company has received reasonable assurances that only Registrable Securities
will be distributed to the public), and pursuant thereto the Company will as
expeditiously as possible:
(a) prepare and (within 60 days after the end of the period within which
requests for registration or qualification for distribution by
prospectus may be given to the Company) file with the Applicable
Agency a Registration Statement with respect to such Registrable
Securities and thereafter use its best efforts to cause such
Registration Statement to become effective or to obtain a final
receipt therefor from the applicable Canadian Securities Commission
(provided that before filing a Registration Statement or any
amendments or supplements thereto, the Company will furnish to the
counsel selected by the holders of a majority of the Registrable
Securities covered by such Registration Statement copies of all such
documents proposed to be filed, which documents will be subject to
review of such counsel);
(b) prepare and file with the Applicable Agency such amendments and
supplements to such Registration Statement as may be necessary to keep
such Registration Statement effective for a period of either (i) not
less than six (6) months (subject to extension pursuant to Section
7(2)) or, if such Registration Statement relates to an underwritten
offering, such longer period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or
dealer or (ii) such shorter period as will terminate when all of the
securities covered by such Registration Statement have been disposed
of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such Registration Statement
(but in any event not before the expiration of any longer period
required under the Relevant Act), and to comply with the provisions of
the Relevant Act with respect to the disposition of all securities
covered by such Registration Statement until such time as all of such
securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in
such Registration Statement;
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(c) furnish to each seller of Registrable Securities such number of copies
of such Registration Statement, each amendment and supplement thereto,
including each preliminary prospectus, final prospectus and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller
(provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction or (iii) consent
to general service of process in any such jurisdiction);
(e) promptly notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Relevant Act, upon discovery that, or upon the discovery of
the happening of any event as a result of which, the prospectus
contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and, at the request
of any such seller, the Company will prepare and furnish to such
seller a reasonable number of copies of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(f) in the case of a registration in the U.S., use its best efforts to
cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then
listed and, if not so listed, use its best efforts to cause all such
Registrable Securities to be listed on The Nasdaq Stock Market or such
other U.S. exchange acceptable to a Class C Majority and a Class D
Majority and in the case of qualifying a prospectus in any Canadian
province, use its best efforts to cause all such Registrable
Securities to be listed on The Toronto Stock Exchange;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of, or date of final
receipt, for such Registration Statement;
(h) enter into such customary agreements (including underwriting
agreements with customary provisions) and take all such other actions
as the holders of a
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majority of the Registrable Securities being sold or the underwriters,
if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without
limitation, effecting a share split or a combination of shares);
(i) make available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and documents relating to the
business of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement;
(j) otherwise use its best efforts to comply with all applicable rules and
regulations of the Applicable Agency, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the
effective date of the Registration Statement, which earnings statement
shall satisfy, in the case of a registration in the U.S., the
provisions of Section 11(a) of the U. S. Securities Act and Rule 158
thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending
or preventing the use of any related prospectus or cease trading or
suspending the qualification of any securities included in such
Registration Statement for sale in any jurisdiction, the Company will
use its best efforts promptly to obtain the withdrawal of such order;
(l) obtain one or more comfort letters, addressed to the holders of the
Registrable Securities being sold, dated the effective date of or the
date of the final receipt issued for such Registration Statement (and,
if such registration includes an underwritten public offering dated
the date of the closing under the underwriting agreement), signed by
the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by comfort
letters as the holders of a majority of the Registrable Securities
being sold reasonably request; and
(m) provide legal opinions of the Company's outside counsel, addressed to
the holders of the Registrable Securities being sold, dated the
effective date of or the date of the final receipt issued for such
Registration Statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), with respect to the Registration Statement,
each amendment and supplement thereto (including
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the preliminary prospectus) and such other documents relating thereto
in customary form and covering such matters of the type customarily
covered by legal opinions of such nature.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Section 5 Registration Expenses.
(1) Except as otherwise provided for herein, all expenses incidental to the
Company's performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, word processing, duplicating
and printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified
public accountants, underwriters (excluding discounts and commissions) and
other Persons retained by the Company (all such expenses being herein
called "Registration Expenses"), will be borne as provided in this
Agreement, except that the Company will, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability
insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued
by the Company are then listed or on The Nasdaq Stock Market or The Toronto
Stock Exchange.
(2) In connection with each Demand Registration and each Piggyback
Registration, the Company will reimburse the holders of Registrable
Securities covered by such registration or qualification for the reasonable
fees and disbursements of, if applicable, one United States and, if
applicable, one Canadian counsel chosen by the holders of a majority of the
Registrable Securities included in such registration or qualification.
(3) To the extent Registration Expenses are not required to be paid by the
Company, each holder of securities included in any registration or
qualification hereunder will pay those Registration Expenses allocable to
the registration or qualification of such holder's securities so included,
and any Registration Expenses not so allocable will be borne by all sellers
of securities included in such registration in proportion to the aggregate
selling price of the securities to be so registered or qualified.
Section 6 Indemnification.
(1) The Company agrees to indemnify and hold harmless, each holder of
Registrable Securities, its affiliates and their respective officers and
directors and each Person who controls such holder (within the meaning of
the U.S. Securities Act) against, and pay and reimburse such holder,
affiliate, director or officer or controlling person for any losses,
claims, damages, liabilities, joint or several, to which such holder or any
such
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affiliate, director or officer or controlling person may become subject
under the Relevant Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any
untrue or alleged untrue statement of material fact contained in any
Registration Statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or, (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company will pay and
reimburse such holder and each such affiliate, director, officer and
controlling person for any legal or any other expenses incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be
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liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) 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, any such
prospectus or preliminary prospectus or any amendment or supplement
thereto, or in any application, in reliance upon, and in conformity with,
written information prepared and furnished to the Company by such holder
expressly for use therein or by such holder's failure to deliver a copy of
the Registration Statement or prospectus or any amendments or supplements
thereto after the Company has furnished such holder with a sufficient
number of copies of the same. In connection with an underwritten offering,
the Company, if requested, will indemnify such underwriters, their officers
and directors and each Person who controls such underwriters (within the
meaning of the Relevant Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.
(2) In connection with any Registration Statement in which a holder of
Registrable Securities is participating, each such holder will furnish to
the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration
Statement or prospectus and, will indemnify and hold harmless the Company,
its directors and officers, each underwriter and each other Person who
controls the Company (within the meaning of the Relevant Act) against any
losses, claims, damages, liabilities, joint or several, to which such
holder or any such director or officer, any such underwriter or controlling
person may become subject under the Relevant Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are
based upon (i) any untrue or alleged untrue statement of material fact
contained in the Registration Statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or in any
application or (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or
omission is made in such Registration Statement, any such prospectus or
preliminary prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
prepared and furnished to the Company by such holder expressly for use
therein, and such
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holder will reimburse the Company and each such director, officer,
underwriter and controlling Person for any legal or any other expenses
incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided, however, that the
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obligation to indemnify and hold harmless will be individual and several to
each holder and will be limited to the net amount of proceeds received by
such holder from the sale of Registrable Securities pursuant to such
Registration Statement.
(3) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(4) The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of
such indemnified party and will survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the
Company's indemnification is unavailable for any reason.
(5) In order to provide for just and equitable contribution in circumstances in
which the indemnity provided for in Section 6(1) is due in accordance with
its terms but is, for any reason, held to be unavailable to or
unenforceable by one or more holders of Registrable Securities seeking to
avail themselves of or enforce such indemnity or enforceable otherwise than
in accordance with its terms, to the extent permitted by applicable law,
the Company and the holders of Registrable Securities shall contribute to
the aggregate of all liabilities of the nature contemplated in this Section
6 and suffered or incurred by the holders of Registrable Securities in such
proportions so that each holder of Registrable Securities is responsible
for the aggregate portion thereof represented by the percentage that the
net proceeds received by such holder of Registrable Securities bears to the
aggregate offering price of the securities and the Company shall be
responsible for the balance whether or not it has been sued separately,
provided that no holder of Registrable Securities shall in any event be
--------
liable to contribute, in the aggregate, any amount in excess of such
aggregate net proceeds or any portion thereof actually received.
Notwithstanding the foregoing, no
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party who has engaged in any fraud or fraudulent misrepresentation shall be
entitled to claim contribution from any person who has not engaged in such
fraud or fraudulent misrepresentation.
Section 7 Participation in Underwritten Registrations.
(1) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the
Person or Persons entitled hereunder to approve such arrangements
(including, without limitation, pursuant to the terms of any over-allotment
or "green shoe" option requested by the managing underwriter(s), provided
--------
that no holder of Registrable Securities will be required to sell more
than the number of Registrable Securities that such holder has requested
the Company to include in any registration), (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) cooperates with the Company's
reasonable requests in connection with such registration or qualification
(it being understood that the Company's failure to perform its obligations
hereunder, which failure is caused by such Person's failure to cooperate,
will not constitute a breach by the Company of this Agreement). Such Person
shall not be required to provide for indemnification obligations on the
part of such Person that are greater than its obligations pursuant to
Section 6(2).
(2) Each Person that is participating in any registration hereunder agrees
that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 4(5) above, such Person will
forthwith discontinue the disposition of its Registrable Securities
pursuant to the Registration Statement until such Person's receipt of the
copies of a supplemented or amended prospectus as contemplated by such
Section 4(5). In the event the Company shall give any such notice, the
applicable time period mentioned in Section 4(2) during which a
Registration Statement is to remain effective shall be extended by the
number of days during the period from and including the date of the giving
of such notice pursuant to this paragraph to and including the date when
each seller of a Registrable Security covered by such Registration
Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(5).
Section 8 Current Public Information.
At all times after the Company has filed a Registration Statement with the
Applicable Agency pursuant to the requirements of the Relevant Act, the Company
will file all reports required to be filed by it under such act and the rules,
regulations and policies adopted thereunder, and will take such further action
as any holder or holders of Registrable Securities may reasonably request, all
to the extent required to enable such holders to sell Registrable Securities
pursuant to Rule 144 adopted by the U.S. Securities and Exchange Commission
under the U.S. Securities Act (as such rule may be amended from time to time)
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or any similar rule, regulation or exemption hereafter adopted by the U.S.
Securities and Exchange Commission or Canadian securities regulatory
authorities.
Section 9 Termination.
Each party to the 1998 Registration Rights Agreement and the 1999
Registration Rights Agreement agrees that in consideration of the execution and
delivery of this Agreement by the parties hereto, the 1998 Registration Rights
Agreement and the 1999 Registration Rights Agreement are hereby terminated and
shall have no further force or effect.
Section 10 Definitions.
"Applicable Agency" means, in the case of a registration in the U.S., the
Securities and Exchange Commission, and in the case of a registration in
any province or territory of Canada, the applicable Canadian Securities
Commission.
"Canadian Securities Commission" means the Ontario Securities Commission or
any other provincial securities commission or like agency then
administering any of the Canadian Securities Laws.
"Canadian Securities Laws" means the Securities Act (Ontario) and the
securities laws of any other province or territory of Canada and the rules,
regulations and policies of any Canadian Securities Commission
administering such securities laws, as the same shall be in effect from
time to time.
"Class B Shares" means the Class B Special Shares in the capital of the
Company.
"Class C Shares" means the Class C-1 Special Shares and the Class C-2
Special Shares in the capital of the Company.
"Class C Majority" means Shareholders holding in the aggregate not less
than 50% of the outstanding Class C Shares.
"Class D Shares" means the Class D Special Shares in the capital of the
Company.
"Class D Majority" means Shareholders holding in the aggregate not less
than 50% of the outstanding Class D Shares.
"Common Shares" means the common shares in the capital of the Company.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or
any department or agency thereof.
"QIPO" means a firm commitment underwritten offering of Common Shares for
aggregate gross proceeds of not less than U.S.$30 million (or the
equivalent thereof in another currency) at a public offering price per
share (prior to underwriting
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commissions and expenses) that is not less than 150% of the Class D
Conversion Price (as defined in the Company's Articles).
"Registrable Securities" means (i) any Common Shares issued or issuable
upon conversion of the Class B Shares, Class C Shares or Class D Shares or
(ii) any equity securities issued or issuable directly or indirectly with
respect to the securities referred to in clause (i) by way of conversion or
exchange thereof or share dividend or share split or in connection with a
combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization; provided,
--------
however, that in the event that pursuant to such recapitalization or
-------
exchange equity securities are issued which do not participate in the
residual equity of the Company or an affiliate of the Company ("Non-
Participating Securities"), such Non-Participating Securities will not be
Registrable Securities. As to any particular shares constituting
Registrable Securities, such shares will cease to be Registrable Securities
when they have been (x) effectively registered or qualified for sale by
prospectus filed under the Relevant Act and disposed of in accordance with
the Registration Statement covering therein, or (y) sold to the public
through a broker, dealer or market maker pursuant to Rule 144 or other
exemption to the Relevant Act. For purposes of this Agreement, a Person
will be deemed to be a holder of Registrable Securities whenever such
Person has the right to acquire directly or indirectly such Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations
upon the exercise of such right), whether or not such acquisition has
actually been effected.
"Registration Statement" means the prospectus and other documents filed
with the Applicable Agency to qualify securities for distribution by
prospectus under the Canadian Securities Laws or effect a registration
under the U.S. Securities Act.
"Relevant Act" means, in the case of a registration in the U.S., the U.S.
Securities Act, and in the case of a registration in any province or
territory of Canada, the applicable Canadian Securities Laws.
"Shareholders' Agreement" means the Second Amended and Restated Unanimous
Shareholders' Agreement dated March 30, 2000 between the Company, AIG
Global Investment Group, Inc., Beamscope Canada Inc., Xxxxx X. Xxxxxxx,
Canadian Imperial Bank of Commerce, CIBC World Markets Inc., X.X. Xxxxxxxxx
Fund Inc., Xxxxxxxxx Fund II Inc., Damac Investors Inc., Damac Investors
III Inc., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Euclid
Partners V, L.P., GE Capital Equity Holdings B.V., HSBC Securities (Canada)
Inc., Xxxxx Lenders, Xxxxxxx X. Xxxxxx, Xxxxxxx X. XxxXxxxxx, Xxxx
XxxXxxxx, River Cities Capital Group II L.P., Xxxxxx Siks, The VenGrowth
Investment Fund Inc., Working Ventures Canadian Fund Inc., CI Mutual,
Cypress Partners, Xxxxxxx, Xxxxxxx & Co., RBIM, RT Capital Management, TAL,
TD Asset Management, TD Asset Management, Xxxxx Lenders and Triax.
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"U.S. Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"U.S. Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
Section 11 Miscellaneous.
(1) No Inconsistent Agreements. Subject to Section 1(7), the Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of
Registrable Securities in this Agreement.
(2) Adjustments Affecting Registrable Securities. The Company will not take any
action, or permit any change to occur, with respect to its securities which
would materially and adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a
registration or qualification for sale by prospectus undertaken pursuant to
this Agreement or which would adversely affect the marketability of such
Registrable Securities in any such registration or qualification
(including, without limitation, effecting a share split or a combination of
shares).
(3) Remedies. The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto shall have the right to injunctive
relief, in addition to all of its other rights and remedies at law or in
equity, to enforce the provisions of this Agreement.
(4) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities and provided, however, that in the event that such amendment or
--------
waiver would treat a holder or group of holders of Registrable Securities
in a manner different from any other holders of Registrable Securities,
then such amendment or waiver will require the consent of such holder or
the holders of a majority of the Registrable Securities of such group
adversely treated.
(5) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement
which are for the benefit of the holders of the Registrable Securities (or
any portion thereof) as such shall be for the benefit of and enforceable by
any subsequent holder of any Registrable Securities (or of such portion
thereof), subject to (i) the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities (or of such portion
thereof) required in order to be entitled to certain rights, or take
certain actions, contained herein, and (ii) compliance with the provisions
of the Shareholders' Agreement.
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(6) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or the effectiveness or validity of any
provision in any other jurisdiction, and this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(7) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and
the same Agreement.
(8) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
(9) Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein without regard to the principles of conflicts of
law thereof.
(10) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be
in writing and shall be deemed to have been given when personally delivered
or received by certified mail, return receipt requested, or sent by
guaranteed overnight courier service. Such notices, demands and other
communications will be sent to the Company and the Shareholders in the
manner and at the addresses set forth in the Shareholders' Agreement.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement on the day and year first above written.
IRONSIDE TECHNOLOGIES INC.
By: ____________________________________
Authorized Signing Officer
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AIG GLOBAL INVESTMENT GROUP, INC.
By: ____________________________________
Authorized Signing Officer
BEAMSCOPE CANADA INC.
By: ____________________________________
Authorized Signing Officer
CANADIAN IMPERIAL BANK OF COMMERCE
By: ____________________________________
Authorized Signing Officer
X.X. XXXXXXXXX FUND INC.
By: ____________________________________
Authorized Signing Officer
XXXXXXXXX FUND II INC.
By: ____________________________________
Authorized Signing Officer
DAMAC INVESTORS INC.
By: ____________________________________
Authorized Signing Officer
DAMAC INVESTORS III INC.
By: ____________________________________
Authorized Signing Officer
EUCLID PARTNERS V, L.P., by its General
Partner, EUCLID ASSOCIATES V, L.P.
By: ____________________________________
Authorized Signing Officer
GE CAPITAL EQUITY HOLDINGS B.V.
By: ____________________________________
Authorized Signing Officer
RIVER CITIES CAPITAL GROUP II, L.P., by
RIVER CITIES MANAGEMENT II, L.P., its
General Partner, by XXXXX XX, INC., its
General Partner
By: ____________________________________
Authorized Signing Officer
THE VENGROWTH INVESTMENT FUND INC.
By:
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____________________________________
Authorized Signing Officer
WORKING VENTURES CANADIAN FUND INC.
By: ____________________________________
Authorized Signing Officer
CI MUTUAL
By: ____________________________________
Authorized Signing Officer
CYPRESS PARTNERS by its general partner
By: ____________________________________
Authorized Signing Officer
XXXXXXX
By: ____________________________________
Authorized Signing Officer
RBIM
By: ____________________________________
Authorized Signing Officer
-3-
RT CAPITAL MANAGEMENT
By: ____________________________________
Authorized Signing Officer
TAL
By: ____________________________________
Authorized Signing Officer
TD ASSET MANAGEMENT
By: ____________________________________
Authorized Signing Officer
TD ASSET MANAGEMENT
By: ____________________________________
Authorized Signing Officer
TRIAX
By: ____________________________________
Authorized Signing Officer
-4-
XXXXXXX & CO.
By: ________________________________
Authorized Signing Officer
___________________________ _______________________________
Witness Xxxxx Lenders
