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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
SR Telecom Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
--------------------------------------------------------------------------------
(Title of Class of Securities)
78464P208
--------------------------------------------------------------------------------
(CUSIP Number)
General Counsel
Greywolf Capital Management LP
4 Manhattanville Road, Suite 201
Purchase, New York 10577
(914) 249-7800
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 7, 2006
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
Exhibit Index Found on Page 17
Page 1 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf Capital Partners II LP
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 41,159,662 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
41,159,662 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
41,159,662 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
5.6% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
PN
------------====================================================================
Page 2 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf Loan Participation LLC
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 31,023,367 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
31,023,367 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
31,023,367 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.1% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
PN
------------====================================================================
Page 3 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf Capital Overseas Fund
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Cayman Islands
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 125,792,629 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
125,792,629 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
125,792,629 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
16.5% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 4 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf Advisors LLC
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 41,159,662 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
41,159,662 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
41,159,662 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
5.6% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 5 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf Capital Management LP
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 166,952,291 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
166,952,291 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
166,952,291 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.8% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
PN
------------====================================================================
Page 6 of 75 Pages
13D
====================
CUSIP No. 78464P208
====================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Greywolf GP LLC
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 166,952,291 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
166,952,291 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
166,952,291 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.8% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 7 of 75 Pages
13D
===================
CUSIP No. 78464P208
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Jonathan Savitz
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing may be
deemed to beneficially own an aggregate of
166,952,291 Shares, which is 21.8% of the class of
securities. The reporting person on this cover page,
however, may be deemed a beneficial owner only of the
securities reported by it on this cover page. [See
Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF and/or OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 166,952,291 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
166,952,291 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
166,952,291 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.8% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
IN
------------====================================================================
Page 8 of 75 Pages
This Amendment No. 2 to Schedule 13D amends the Schedule 13D initially
filed on October 11, 2005 (collectively, with all amendments thereto, the
"Schedule 13D").
Preliminary Note: Greywolf Capital Partners II LP and Greywolf Capital
Overseas Fund own in aggregate 135,928,924 common shares (the "Shares") of SR
Telecom Inc. (the "Company"), such amount representing 18.5% of the issued and
outstanding Shares of the Company. Greywolf Loan Participation LLC owns
CDN$5,273,972.32 principal amount of convertible term loans owed by the Company
(the "Convertible Loans"), such Convertible Loans and certain other amounts
owing under the Credit Agreement (as defined below) being immediately
convertible at a conversion rate of CDN $0.17 per Share. Pursuant to Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended, and assuming
no holders of Convertible Loans other than any of the Reporting Persons (as
defined below) mentioned herein convert any Convertible Loans, the Reporting
Persons may in aggregate be deemed to be the beneficial owners of 21.8% of the
Company's Shares through their ownership of Shares or Convertible Loans.
Assuming all holders of Convertible Loans including the Reporting Persons
mentioned herein convert all outstanding Convertible Loans, the Reporting
Persons would be deemed to be the beneficial owners of 19.6% of the Company's
Shares. For further information regarding the Convertible Loans, see Items 3, 4
and 6 below.
Since the filing of the prior Schedule 13D, the Reporting Persons have
not acquired or disposed of any Shares. The 550,000 Warrants reported in the
prior Schedule 13D expired by their terms unexercised and are no longer included
in the Schedule 13D.
Item 2. Identity And Background
------- -----------------------
Item 2 of the Schedule 13D is amended and restated in its entirety as
follows:
(a) This statement is filed by the entities and persons listed
below, all of whom together are referred to herein as the "Reporting Persons."
(i) Greywolf Capital Partners II LP, a Delaware limited
partnership ("Greywolf Capital II"), with respect to
the Shares it beneficially owns (through its
ownership of Shares);
(ii) Greywolf Loan Participation LLC, a Delaware limited
liability company ("Greywolf Loan Participation"),
with respect to the Shares it beneficially owns
(through its ownership of Convertible Loans);
(iii) Greywolf Capital Overseas Fund, a Cayman Islands
exempted company ("Greywolf Overseas"), with respect
to the Shares it beneficially owns (through its
ownership of Shares and Convertible Loans)(1);
(iv) Greywolf Advisors LLC, a Delaware limited liability
company and the general partner of Greywolf Capital
II (the "General Partner"), with respect to the
-------------------------
(1) Greywolf Overseas owns all of the economic interest in, and has the power to
vote and dispose of, the Convertible Loans and 31,023,367 Shares issuable upon
conversion of the Convertible Loans owned by Greywolf Loan Participation.
Page 9 of 75 Pages
Shares beneficially owned by Greywolf Capital II
(through its ownership of Shares);
(iv) Greywolf Capital Management LP, a Delaware limited
partnership and the investment manager of Greywolf
Overseas and Greywolf Capital II (the "Investment
Manager"), with respect to the Shares beneficially
owned by Greywolf Overseas, Greywolf Capital II and
Greywolf Loan Participation (through their ownership
of Shares and/or Convertible Loans);
(v) Greywolf GP LLC, a Delaware limited liability company
and the general partner of the Investment Manager
(the "Investment Manager General Partner"), with
respect to the Shares beneficially owned by Greywolf
Overseas, Greywolf Capital II and Greywolf Loan
Participation (through their ownership of Shares
and/or Convertible Loans); and
(vi) Jonathan Savitz, a United States citizen ("Savitz")
and the senior managing member of the General Partner
and the sole managing member of the Investment
Manager General Partner, with respect to the Shares
beneficially owned by Greywolf Overseas, Greywolf
Capital II and Greywolf Loan Participation (through
their ownership of Shares and/or Convertible Loans).
(b) The address of the principal business and principal office of
(i) all of the Reporting Persons other than Greywolf Overseas is 4
Manhattanville Road, Suite 201, Purchase, New York 10577 and (ii) Greywolf
Overseas is 6 Front Street, Hamilton, HM11 Bermuda.
(c) The principal business of each of Greywolf Capital II and
Greywolf Overseas is that of a private investment fund engaging in the purchase
and sale of investments for its own account. The principal business of Greywolf
Loan Participation is to invest for the account entities managed by or
affiliated with the Investment Manager. The principal business of the General
Partner is to act as the general partner of Greywolf Capital II. The principal
business of the Investment Manager is that of an investment adviser. The
principal business of the Investment Manager General Partner is to act as the
general partner of the Investment Manager. The principal business of Savitz is
serving as the senior managing member of the General Partner, serving as the
sole managing member of the Investment Manager General Partner and serving as
the chief executive officer and chief investment officer of certain other funds
managed by the Investment Manager.
(d) None of the Reporting Persons has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons has, during the last five years,
been party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) The citizenship of each of the Reporting Persons is set forth
above.
Page 10 of 75 Pages
Item 3. Source And Amount Of Funds And Other Consideration
------- --------------------------------------------------
Item 3 of the Schedule 13D is updated as follows:
On December 7, 2006, Greywolf Loan Participation entered into the
Eighth Amendment (the "Eighth Amendment") to the Credit Agreement dated as of
May 19, 2005 (the "Credit Agreement") among the Company, BNY Trust Company of
Canada as Administrative Agent and Collateral Agent and the lenders thereto.
Pursuant to the Eighth Amendment, on December 15, 2006, Greywolf Loan
Participation advanced CDN $5,273,972.32 principal amount of Convertible Loans
to the Company, which loans are convertible into 31,023,367 Shares. The source
of the funds used to advance the Convertible Loans was obtained from working
capital.
Item 4. Purpose Of The Transaction
------- --------------------------
Item 4 of the Schedule 13D is updated as follows:
As of the date of this filing, Greywolf Capital II and Greywolf
Overseas own in aggregate 135,928,924 Shares, such amount representing 18.5% of
the issued and outstanding Shares of the Company. Greywolf Loan Participation
owns CDN$5,273,972.32 principal amount of Convertible Loans, such Convertible
Loans and certain other amounts owing under the Credit Agreement being
immediately convertible at a conversion rate of CDN $0.17 per Share. Since the
filing of the prior Schedule 13D, the 550,000 Warrants reported in the prior
Schedule 13D expired by their terms unexercised and are no longer included in
the Schedule 13D. For more information regarding the terms of the Convertible
Loans, see Item 6.
Although no Reporting Person has any specific plan or proposal to
acquire or dispose of Shares and/or Convertible Loans, consistent with its
investment purpose, each Reporting Person at any time and from time to time may
acquire additional Shares and/or Convertible Loans or dispose of any or all of
its Shares and/or Convertible Loans depending upon an ongoing evaluation of the
investment in the Shares and Convertible Loans, prevailing market conditions,
other investment opportunities, liquidity requirements of the Reporting Person
and/or other investment considerations. No Reporting Person has made a
determination regarding a maximum or minimum number of Shares and/or Convertible
Loans which it may hold at any point in time.
Also, consistent with their investment intent, the Reporting Persons
may but will not necessarily engage in communications with one or more
shareholders of the Company, one or more officers of the Company, one or more
members of the board of directors of the Company or other persons regarding the
Company, including but not limited to its operations and potential acquisitions
of an operating business by the Company.
Except to the extent the foregoing may be deemed a plan or proposal,
none of the Reporting Persons has any plans or proposals which relate to, or
could result in, any of the matters referred to in paragraphs (a) through (j),
inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons
may, at any time and from time to time, review or reconsider their position
and/or change their purpose and/or formulate plans or proposals with respect
thereto.
Page 11 of 75 Pages
Item 5. Interest In Securities Of The Issuer
------- ------------------------------------
Item 5 of the Schedule 13D is amended and restated as follows:
(a) Greywolf Capital II, Greywolf Overseas and Greywolf Loan
--------------------------------------------------------------
Participation
-------------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for each of Greywolf Capital II,
Greywolf Overseas and Greywolf Loan Participation is
incorporated herein by reference for each such
entity. The percentage amount set forth in Row 13 for
all cover pages filed herewith is calculated based
upon the sum of (i) 733,393,060 Shares outstanding as
reported by the Company plus (ii) with respect to all
Reporting Persons other than Greywolf Capital II and
the General Partner, that number of additional Shares
that would be issued if Greywolf Loan Participation
exercised all of the Convertible Loans it
beneficially owns.
(c) There have been no transactions in the Shares since
the filing of the prior Schedule 13D.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares
beneficially owned by Greywolf Capital II reported
herein. The Investment Manager has the power to
direct the receipt of dividends relating to, or the
disposition of the proceeds of the sale of, all of
the Shares beneficially owned by Greywolf Overseas,
Greywolf Capital II and Greywolf Loan Participation
reported herein. The Investment Manager General
Partner is the general partner of the Investment
Manager. Savitz is the senior managing member of the
General Partner and the sole managing member of the
Investment Manager General Partner.
(e) Not applicable.
(b) The General Partner, the Investment Manager and the Investment
--------------------------------------------------------------
Manager General Partner
-----------------------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for each of the General Partner,
the Investment Manager and the Investment Manager
General Partner is incorporated herein by reference.
(c) None.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares
beneficially owned by Greywolf Capital II reported
herein. The Investment Manager has the power to
direct the receipt of dividends relating to, or the
disposition of the proceeds of the sale of, all of
the Shares beneficially owned
Page 12 of 75 Pages
by Greywolf Overseas, Greywolf Capital II and
Greywolf Loan Participation reported herein. The
Investment Manager General Partner is the general
partner of the Investment Manager. Savitz is the
senior managing member of the General Partner and the
sole managing member of the Investment Manager
General Partner.
(e) Not applicable.
(c) Savitz
------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for Savitz is incorporated herein
by reference.
(c) None.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares
beneficially owned by Greywolf Capital II reported
herein. The Investment Manager has the power to
direct the receipt of dividends relating to, or the
disposition of the proceeds of the sale of, all of
the Shares beneficially owned by Greywolf Overseas,
Greywolf Capital II and Greywolf Loan Participation
reported herein. The Investment Manager General
Partner is the general partner of the Investment
Manager. Savitz is the senior managing member of the
General Partner and the sole managing member of the
Investment Manager General Partner.
(e) Not applicable.
The Shares (including those beneficially owned through ownership of
Convertible Loans) reported hereby for Greywolf Capital II and Greywolf Loan
Participation are owned directly by Greywolf Capital II and Greywolf Loan
Participation, respectively. With respect to the Shares reported herein by
Greywolf Overseas, 94,769,262 Shares are owned directly by Greywolf Overseas and
31,023,367 Shares are owned directly by Greywolf Loan Participation (through its
ownership of Convertible Loans). Because Greywolf Overseas has the power to vote
and dispose of the Shares owned by Greywolf Loan Participation, Greywolf
Overseas may be deemed to beneficially own such 31,023,367 Shares. The General
Partner, as general partner to Greywolf Capital II, may be deemed to be the
beneficial owner of all such Shares beneficially owned by Greywolf Capital II.
The Investment Manager, as investment manager to Greywolf Overseas and Greywolf
Capital II, may be deemed to be the beneficial owner of all such Shares
beneficially owned by Greywolf Overseas, Greywolf Capital II and Greywolf Loan
Participation. The Investment Manager General Partner, as general partner of the
Investment Manager, may be deemed to be the beneficial owner of all such Shares
beneficially owned by Greywolf Overseas, Greywolf Capital II and Greywolf Loan
Participation. Savitz, as the senior managing member of the General Partner and
as the sole managing member of the Investment Manager General Partner, may be
deemed to be the beneficial owner of all such Shares beneficially owned by
Greywolf Overseas, Greywolf Capital II and Greywolf Loan Participation. Each of
the General Partner, the
Page 13 of 75 Pages
Investment Manager, the Investment Manager General Partner and Savitz hereby
disclaims any beneficial ownership of any such Shares (and related Convertible
Loans).
Item 6. Contracts, Arrangements, Understandings Or
------ -------------------------------------------
Relationships With Respect To Securities Of The Issuer
------------------------------------------------------
Item 6 of the Schedule 13D is updated as follows:
Pursuant to the terms and conditions of the Eighth Amendment, the
lenders under the Credit Agreement (including Greywolf Loan Participation) have
the right to convert their share of the aggregate amount of the Convertible
Loans, all "in kind" interest and other accrued and unpaid interest thereon into
Shares at a conversion rate of CDN $0.17 per Share, subject to adjustment. The
Convertible Loans are immediately convertible and can be converted at any time
until the maturity date, which is December 16, 2011. The Convertible Loan
lenders agreed that if holders of more than 75% of the principal amount of
outstanding Convertible Loans direct the holders of the remaining non-converted
Convertible Loans to convert their Loans, such remaining holders shall convert
their Convertible Loans into Shares.
As provided for in the Eighth Amendment, the Company and certain of the
Convertible Loan lenders entered into a United States amended and restated
registration rights agreement dated as of December 15, 2006 and the Company,
Greywolf Capital II, Greywolf Loan Participation and Greywolf Overseas entered
into a Canadian registration rights agreement dated as of December 15, 2006
(together, the "2006 Registration Rights Agreements") that provides for certain
demand registration rights, shelf and piggyback registration rights with respect
to all of the Shares reported herein, including the Shares into which the
Convertible Loans held by Greywolf Loan Participation are convertible.
This summary of the Eighth Amendment is qualified in its entirety by
the full terms and conditions of such agreement, which is filed as an exhibit to
the Form 6-K filed by the Company with the SEC on or about December 13, 2006,
and is incorporated herein by reference. This summary of the 2006 Registration
Rights Agreements is qualified in its entirety by the full terms and conditions
of such agreements, which are filed as Exhibits 3 and 4 to the Schedule 13D and
are incorporated herein by reference
Except for the Purchase Agreement, the Registration Rights Agreement,
the Intercreditor Agreement, the May 2005 Term Sheet, the Credit Agreement (each
as described in the prior Schedule 13D), the Eighth Amendment, the 2006
Registration Rights Agreements and any other agreements described herein and/or
in the prior Schedule 13D, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) among the Reporting Persons or between
such persons and any other person with respect to any securities of the Company,
including but not limited to the transfer or voting of any securities of the
Company, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, divisions of profits or loss, or the giving or
withholding of proxies.
Item 7. Materials To Be Filed As Exhibits
------- ---------------------------------
Item 7 of the Schedule 13D is updated as follows:
Page 14 of 75 Pages
The 2006 Registration Rights Agreements are filed as Exhibits 3 and 4
to the Schedule 13D, and are incorporated herein by reference. The Eighth
Amendment is filed as an exhibit to the Form 6-K filed by the Company with the
SEC on or December 13, 2006, and is incorporated herein by reference.
Page 15 of 75 Pages
SIGNATURES
----------
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: December 18, 2006
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF ADVISORS LLC, On its own behalf
And as the General Partner of GREYWOLF CAPITAL
PARTNERS II LP
By Jonathan Savitz,
Senior Managing Member
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF GP LLC
By Jonathan Savitz,
Managing Member
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF CAPITAL MANAGEMENT LP,
On its own behalf
And as investment manager or manager to
GREYWOLF CAPITAL OVERSEAS FUND
And GREYWOLF LOAN PARTICIPATION LLC
By Jonathan Savitz,
Managing Member of Greywolf GP LLC, its General Partner
/s/ Jonathan Savitz
-------------------------------------
Jonathan Savitz
Page 16 of 75 Pages
EXHIBIT INDEX
EXHIBIT 2 Joint Acquisition Statement Pursuant to Section
240.13d-1(k)
EXHIBIT 3 Amended and Restated (United States)
Registration Rights Agreement dated as of
December 15, 2006
EXHIBIT 4 (Canadian) Registration Rights Agreement
dated as of December 15, 2006
Page 17 of 75 Pages
EXHIBIT 2
to
SCHEDULE 13D
JOINT ACQUISITION STATEMENT
PURSUANT TO SECTION 240.13d-1(k)
--------------------------------
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13D shall be filed on behalf
of each of the undersigned without the necessity of filing additional joint
acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him, her or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the other entities or persons, except to the extent that he, she or
it knows or has reason to believe that such information is inaccurate.
Dated: December 18, 2006
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF ADVISORS LLC,
On its own behalf
And as the General Partner of
GREYWOLF CAPITAL PARTNERS II LP
By Jonathan Savitz,
Senior Managing Member
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF GP LLC
By Jonathan Savitz,
Managing Member
/s/ Jonathan Savitz
----------------------------------------
GREYWOLF CAPITAL MANAGEMENT LP,
On its own behalf
And as investment manager or manager to
GREYWOLF CAPITAL OVERSEAS FUND
And GREYWOLF LOAN PARTICIPATION LLC
By Jonathan Savitz,
Managing Member of Greywolf GP LLC, its General Partner
/s/ Jonathan Savitz
-------------------------------------
Jonathan Savitz
Page 18 of 75 Pages
EXHIBIT 3
to
SCHEDULE 13D
Amended and Restated Registration Rights Agreement
by and among
SR Telecom Inc.
and
The Parties Specified on
the Signature Pages Hereof
Dated as of December 15, 2006
Page 19 of 75 Pages
SR TELECOM INC.
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement")
dated as of December 15, 2006 is made and entered into among SR Telecom Inc., a
Canadian corporation (together with its successors and assigns, the "Company"),
and certain holders (collectively, the "Holders") of the Company's Common Shares
(the "Common Stock"), and/or Convertible Notes (as defined below) specified on
the signature pages hereof. Capitalized terms, unless otherwise specifically
identified, have the meanings set forth in Section 13.
WHEREAS, on February 1, 2006, certain Holders acquired Common Stock
pursuant to those certain Share Purchase Agreements dated as of January 23, 2006
by and between the Company and each of such Holders (the "Purchase Agreements")
and, in connection with each of the Purchase Agreements, the Company granted
such Holders certain registration rights with respect to the Common Stock issued
pursuant to the Purchase Agreement (the "Purchase Agreement Shares") pursuant to
a Registration Rights Agreement dated as of February 1, 2006 (the "Existing
Registration Rights Agreement"); and
WHEREAS, certain Holders as of the date hereof have entered into that
certain Eighth Amending Agreement between the Company, as borrower, BNY Trust
Company of Canada, as agent, and the lenders party thereto, further amending the
Credit Agreement, dated as of May 19, 2005, among the Company, BNY Trust Company
of Canada and the lenders party thereto (as the same may from time to time be
amended, restated, modified or supplemented, the "Credit Agreement"); and
WHEREAS, pursuant to the Credit Agreement, the lenders thereunder have made
a convertible term loan to the Company, which loan is convertible into shares of
Common Stock (such underlying shares of Common Stock, the "Credit Agreement
Shares" and, together with the Purchase Agreement Shares, the "Shares");
WHEREAS, in connection with the Credit Agreement, the Company desires to
grant the Holders that are lenders under the Credit Agreement certain
registration rights with respect to the Credit Agreement Shares; and
WHEREAS, the parties to the Existing Registration Rights Agreement wish to
amend and restate such agreement on the terms hereof to include such
registration rights with respect to the Credit Agreement Shares;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEMAND REGISTRATION.
(a) Request by Holders. If the Company receives at any time a written
request from a Holder that the Company register Registrable Securities held
by a Holder (a
Page 20 of 75 Pages
"Demand Request"), then the Company shall promptly, but in any event within
two (2) Business Days, notify all Holders in writing of the receipt of such
Demand Request and:
(i) use reasonable best efforts to cause to be filed or
confidentially submitted, as soon as practicable, but in any case
within forty-five (45) days of the date of delivery to the Company of
the Demand Request, a registration statement covering such Registrable
Securities (the "Demand Registration Statement") which the Company has
been so requested to register by the Holder (such Holder, together
with its respective Affiliates (other than the Company), a "Requesting
Holder"), providing for the registration under the Securities Act of
such Registrable Securities to the extent necessary to permit the
disposition of such Registrable Securities in accordance with the
intended method of distribution specified in such Demand Request;
(ii) use its reasonable best efforts to have such registration
statement declared effective by the Commission as soon as practicable
thereafter but in any event within ninety (90) days of the date of
delivery of the Demand Request; and
(iii) refrain from filing any other registrations with respect to
any other securities of the Company until such date which is
forty-five (45) days following effectiveness of the registration
statement filed in response to the Demand Request other than
registrations filed pursuant to or in connection with the Prior
Registration Rights Agreement.
(b) Postponements. Following delivery of a Demand Request, the Company may
postpone for up to fifteen (15) Business days the filing or effectiveness of a
registration statement effected pursuant to this Section 1 if in the good faith
judgment of the board of directors of the Company, the filing or effectiveness
of the registration statement or applicable securities laws (A) would reasonably
be expected to have a material adverse effect on any proposed financing or
recapitalization of the Company or pending negotiations relating to a merger,
consolidation, acquisition or similar transaction or (B) would require the
Company in its sole and reasonable discretion to disclose material non-public
information about the Company ("Non-Public Information") and the disclosure of
such Non-Public Information would materially and adversely affect the business
and operations of the Company; provided, however, that immediately following
such postponement, the Company shall file or request effectiveness of the
registration statement effected pursuant to this Section 1.
(c) Effective Registration Statement. A registration requested pursuant to
this Section 1 shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective (unless a
substantial cause of the failure of such registration statement to become
effective shall be attributable to the Requesting Holder) and remained effective
in compliance with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
until such time (not to exceed 270 days) as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the Requesting Holder set forth in such registration statement; or (ii) if,
after it has become effective, such registration is interfered with by any stop
Page 21 of 75 Pages
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Requesting
Holder.
(d) Limitations on Demand Requests. Each Holder shall have the right to
make up to two (2) Demand Requests pursuant to this Section 1 to the Company.
The Company shall not be required to comply with a Demand Request unless the
reasonably anticipated aggregate gross proceeds (before any underwriting
discounts and commissions) would equal or exceed US$2,000,000. No Holder may
make a Demand Request if it is able to sell its Registrable Securities pursuant
to Rule 144(k) under the Securities Act, or any successor provision, without any
limitations.
(e) Cancellation of Registration. Each Requesting Holder shall have the
right to cancel a proposed registration of Registrable Securities pursuant to
this Section 1 when the request for cancellation is based upon material adverse
information relating to the Company that is different from the information known
by such Requesting Holder at the time of the Demand Request. Such cancellation
of a registration shall not be counted as one of the two (2) Demand Requests and
notwithstanding anything to the contrary in this Agreement, the Company shall be
responsible for the expenses of such Requesting Holder incurred in connection
with the registration prior to the time of cancellation.
(f) Registration Expenses. The Company will pay all Registration Expenses
incurred in connection with each registration effected in accordance with this
Section 1.
(g) Suspension. The Company may, by notice given to the applicable
Requesting Holder, require such Requesting Holder not to make any sale of
Registrable Securities pursuant to a Demand Registration Statement effected
pursuant to this Section 1 if, in the reasonable good faith judgment of the
board of directors of the Company, (A) securities laws applicable to such sale
would require the Company to disclose Non-Public Information and (B) the
disclosure of such Non-Public Information would reasonably be expected to have a
material adverse effect on the business or operations of the Company or any
proposed financing or recapitalization of the Company or pending negotiations
relating to a merger, consolidation, acquisition or similar transaction. In the
event that sales under the Demand Registration Statement are suspended because
of the obligation to disclose Non-Public Information, the Company will notify
such Requesting Holder promptly upon such Non-Public Information being included
by the Company in a filing with the Commission, being otherwise disclosed to the
public (other than through the actions of such Requesting Holder) or ceasing to
be material to the Company, and upon such notice being given by the Company,
such Requesting Holder shall again be entitled to sell Registrable Securities
pursuant to such Demand Registration Statement. Notwithstanding the foregoing,
the right of the Company pursuant to this clause (g) to require such Requesting
Holder to suspend sales under such registration statement shall not extend for
more than forty-five (45) consecutive days and shall not exceed ninety (90)
total days in any rolling period of twelve (12) consecutive months during which
the Registrable Securities are saleable pursuant to a registration statement;
provided, however, that the period of time, if any, used by the Company pursuant
to Section 1(b) to delay the filing or effectiveness of the registration
statement shall be counted towards this ninety (90) day period.
Page 22 of 75 Pages
2. FORM F-3 REGISTRATION.
(a) Request by a Requesting Holder. A Requesting Holder may request at any
time that the Company file a registration statement under the Securities Act on
Form F-3 (or similar or successor form) covering the sale or other distribution
of all or any portion of the Registrable Securities held by such Requesting
Holder pursuant to Rule 415 under the Securities Act (a "Form F-3 Demand") if
(i) the reasonably anticipated aggregate gross proceeds (before any underwriting
discounts and commissions) would equal or exceed US$1,000,000, (ii) the Company
is a registrant qualified to use Form F-3 (or any similar or successor form) to
register such Registrable Securities and (iii) the plan of distribution of the
Registrable Securities is other than pursuant to an underwritten public
offering. If such conditions are met, the Company shall use its reasonable best
efforts to register under the Securities Act on Form F-3 (or any similar or
successor form) at the earliest practicable date but in any event within thirty
(30) days of the Form F-3 Demand, for sale in accordance with the method of
disposition specified in the Form F-3 Demand, the number of Registrable
Securities specified in such Form F-3 Demand. In connection with a Form F-3
Demand, the Company agrees to include in the prospectus included in any
registration statement on Form F-3, such material describing the Company and
intended to facilitate the sale of securities being so registered as is
reasonably requested for inclusion therein by the Requesting Holder, whether or
not the rules applicable to preparation of Form F-3 require the inclusion of
such information. No Holder may make a Form F-3 Demand if it is able to sell its
Registrable Securities pursuant to Rule 144(k) under the Securities Act, or any
successor provision, without any limitations.
(b) Postponements. Following delivery of a Form F-3 Demand by a Requesting
Holder, the Company may postpone for up to forty-five (45) days the filing or
effectiveness of a Form F-3 registration statement effected pursuant to this
Section 2 if in the good faith judgment of the board of directors of the
Company, the filing or effectiveness of a Form F-3 registration statement or
applicable securities laws (A) would reasonably be expected to have a material
adverse effect on any proposed financing or recapitalization of the Company or
pending negotiations relating to a merger, consolidation, acquisition or similar
transaction or (B) would require the Company to disclose Non-Public Information
and the disclosure of such Non-Public Information would materially and adversely
affect the business and operations of the Company; provided, however, that such
right to delay or defer a Form F-3 Demand shall be exercised by the Company not
more than twice in any twelve (12) month period and during such time the Company
may not file a registration statement for securities to be issued and solely for
its own account or for that of any other holders. Upon the expiration of such
forty-five (45) day period, or earlier upon such Non-Public Information being
included by the Company in a filing with the Commission, being otherwise
disclosed to the public (other than through the actions of a holder of
Registrable Securities) or ceasing to be material to the Company, the Company
will as soon as possible file or have declared effective such registration
statement of Form F-3. Form F-3 Demands will not be deemed to be Demand Requests
as described in Section 1 hereof and a Requesting Holder shall have the right to
request an unlimited number of Form F-3 Demands. Notwithstanding the foregoing,
the Company shall not be obligated to file more than one (1) registration
statement on Form F-3 pursuant to this Section 2 in any given six (6) month
period.
(c) Registration Expenses. The Company will pay all Registration Expenses
incurred in connection with each registration effected in accordance with this
Section 2.
Page 23 of 75 Pages
3. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. If the Company proposes to file any registration
statement (other than a registration statement filed pursuant to any of the
Prior Registration Rights Agreement) under the Securities Act for the purposes
of a public offering of its securities (whether or not for sale for its own
account and including, but not limited to, registration statements relating to
secondary offerings of securities of the Company (including any such
registration statement filed pursuant to Section 1 or 2 hereof)) (a "Piggyback
Registration"), the Company will give prompt written notice to all the Holders
of its intention to effect such a registration and shall, subject to Section
3(b), use all commercially reasonable efforts to include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 30 days after the receipt of the
Company's notice; provided, however, that the Company (or a Requesting Holder in
the case of a registration statement filed pursuant to Section 1 or 2 hereof)
may at any time withdraw or cease proceeding with any such Piggyback
Registration if it (or a Requesting Holder in the case of a registration
statement filed pursuant to Section 1 or 2 hereof) will at the same time
withdraw or cease proceeding with the registration of all other Company
securities originally proposed to be registered. The rights to Piggyback
Registration may be exercised an unlimited number of occasions. Any Holder shall
have the right to withdraw such Holder's request for inclusion of such Holder's
Registrable Securities in any registration statement filed in connection with a
Piggyback Registration by giving written notice to the Company of such
withdrawal within five (5) Business Days prior to the anticipated effectiveness
of such registration statement in connection therewith.
(b) Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten offering and the Managing Underwriter advises the Company (and a
Requesting Holder in the case of a registration statement filed pursuant to
Section 1 or 2 hereof) in writing (with a copy to each party hereto requesting
registration of Registrable Securities) that in its opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without materially and adversely affecting
the marketability of such offering (the "Maximum Offering Quantity"), the
Company will include in such registration securities in the following priority:
(i) first, the securities the Company proposes to sell (in the case of
a Company initiated filing) or the Requesting Holder proposes to sell in
the case of a registration statement filed pursuant to Section 1 or 2
hereof;
(ii) second, to the extent (and only to the extent) that the Maximum
Offering Quantity exceeds the aggregate amount of Registrable Securities
which are requested to be included in such registration, subject any
obligation of the Company's to first include registrable securities under
the Prior Registration Rights Agreement, the Company shall include in such
registration Registrable Securities requested to be included by the other
Holders, and if such number exceeds the remaining Maximum Offering
Quantity, the Company shall include only such other Holders' pro rata share
of the remaining Maximum Offering Quantity based on the amount of
Registrable Securities beneficially owned on a fully converted basis by
such other Holders; and
Page 24 of 75 Pages
(iii) third, to the extent (and only to the extent) that the Maximum
Offering Quantity exceeds the aggregate amount of Registrable Securities
which are requested to be included in such registration, the Company shall
include in such registration any other securities requested to be included
in the offering; provided, that the Company shall not include in any
Piggyback Registration any securities that are not Registrable Securities
(other than securities the Company proposes to sell and other than as
required by the Prior Registration Rights Agreement) without the prior
written consent of Holders that hold a majority of the Registrable
Securities to be included in the Piggyback Registration.
Notwithstanding the foregoing, in the event of a demand registration filed
pursuant to a Form F-3 Demand, the Registrable Securities to be included in such
registration statement shall be divided pro-rata among the Requesting Holder and
all other Holders that have exercised piggyback rights pursuant to this Section
3.
(c) No Effect on Demand Registrations. No registration effected under this
Section 3 shall be deemed to have been effected pursuant to Section 1 or 2
hereof or shall relieve the Company of its obligation to effect any registration
upon request under Section 1 or 2 hereof.
(d) Registration Expenses. The Company will pay all Registration Expenses
incurred in connection with each registration effected in accordance with this
Section 3.
4. REGISTRATION PROCEDURES.
If and whenever the Company is required to effect the registration of any
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will use its reasonable best efforts to effect the registration and sale
of such Registrable Securities in accordance with the intended method of
disposition thereof. Without limiting the foregoing, the Company in each such
case will:
(a) as far in advance as reasonably practical before filing a registration
statement or any amendment thereto, will furnish to the holders of the
Registrable Securities included in such registration statement copies of
reasonably complete drafts of all such documents proposed to be filed (including
exhibits), and any such holder shall have three (3) Business Days to object to
any Holder Information contained therein and the Company will make the
corrections reasonably requested by such Holder with respect to such
information;
(b) subject to Section and paragraph (f) below, use its reasonable best
efforts to prepare and file with the Commission such amendments and supplements
to such registration statement and any prospectus used in connection therewith
as may be necessary to maintain the effectiveness of such registration statement
and to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement, in accordance with the intended methods of disposition thereof, until
such time (not to exceed 270 days after such registration statement shall have
been declared effective)
Page 25 of 75 Pages
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition thereof;
(c) promptly notify each holder of Registrable Securities included on a
registration statement (and the underwriters, if any):
(i) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
(ii) of the notification to the Company by the Commission of the
issuance of any stop order suspending the effectiveness of such
registration statement, or of any order preventing or suspending the use of
any preliminary prospectus; and
(iii) of the receipt by the Company of any notification with respect
to the suspension of the qualification or the exemption from qualification
of any Registrable Securities for sale under the applicable securities or
blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose.
(d) furnish to each holder of Registrable Securities covered by such
registration statement, not later than two (2) Business Days after filing with
the Commission, such number of copies of the prospectus contained in such
registration statement (including any summary prospectus and prospectus
supplements) that has been declared effective and any other prospectus filed
under Rule 424 promulgated under the Securities Act relating to such holder's
Registrable Securities as such holder may reasonably request to facilitate the
disposition of its Registrable Securities;
(e) use its reasonable best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each holder thereof may reasonably
request, to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and to take any other action
which may be reasonably necessary or advisable to enable such holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such holder, except that the Company shall not for any such purpose be
required (i) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this paragraph (e)
be obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction or (iii) to consent to general service of process in any
jurisdiction unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or applicable
rules or regulations thereunder;
(f) promptly notify each holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event, the existence of any condition or any information becoming known as a
result of which any prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
Page 26 of 75 Pages
state any 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, and at the request of any such holder 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, in
the light of the circumstances under which they were made, not misleading;
provided, however, the Company shall not be required to furnish such supplement
or amendment at any time that sales of Registrable Securities are suspended
under the circumstances described in Section 1(g) for as long as such sales are
suspended;
(g) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement of the
Company which complies with the provisions of Rule 158 of the Securities Act;
(h) make available for inspection by any Holder and any attorney,
accountant or other agent retained by any such Holder (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, employees and its
counsel and its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such registration statement; provided that
nothing in this Agreement will require the waiver of any privilege or the
disclosure of any information that would result in any such waiver. Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential will not be disclosed by the Inspectors
unless (i) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (ii) the information in
such Records has been made generally available to the public; provided, however,
that prior notice will be provided as promptly as practicable to the Company of
the potential disclosure of any information by such Inspector pursuant to clause
(i) of this sentence in order to permit the Company to obtain a protective order
(or to waive the provisions of this paragraph). The Company may request the
Inspectors enter into a standard confidentiality agreement to this effect prior
to furnishing any confidential information. The seller of Registrable Securities
agrees that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(i) provide a transfer agent and a registrar for all Registrable Securities
covered by such registration statement not later than the effective date of such
registration statement;
(j) provide a CUSIP number for all Registrable Securities not later than
the effective date on which a registration pursuant to this Agreement is
effected;
(k) in the case of an Underwritten Offering, enter into an underwriting
agreement and take all such other actions in connection therewith in order to
expedite and
Page 27 of 75 Pages
facilitate the disposition of such Registrable Securities, in each case as the
underwriters determine is reasonable and customary in transactions of this kind,
and in connection therewith: (1) make such representations and warranties to the
underwriters in form, substance and scope as are customarily made by issuers to
underwriters in secondary underwritten offerings; (2) obtain opinions of counsel
to the Company (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the underwriters of such Registrable Securities
and shall cover the matters customarily covered in opinions requested in
secondary underwritten offerings); (3) obtain "cold comfort" letters from the
independent public accountants of the Company addressed to the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with secondary
underwritten offerings; and (4) deliver such documents and certificates as may
be reasonably requested by the managing underwriters to evidence compliance with
clause (1) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company in respect of the
relevant offering; and
(l) ensure that (i) any registration statement and any amendment thereto
and any prospectus forming a part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and regulations of
the Commission thereunder, (ii) any registration statement and any amendment
thereto, at the time each becomes effective (in either case, other than with
respect to Holder Information), does not contain an untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any prospectus forming a
part of any registration statement, and any supplement to such prospectus (in
either case, other than with respect to Holder Information), as of the date of
each, does not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The Company may require each holder of Registrable Securities as to which
any registration is being effected to, and each such holder, as a condition to
including Registrable Securities in such registration, shall, furnish the
Company with such information and affidavits regarding such holder and the
distribution of such securities as the Company may from time to time reasonably
request in writing in connection with such registration.
Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
paragraph (f), such holder will forthwith discontinue such holder's disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph 4(f) and, if so
directed by the Company, will deliver to the Company or destroy all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
5. [RESERVED]
6. HOLDBACK AGREEMENTS.
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If and to the extent requested by the Managing Underwriter (such request to
be made at least five (5) Business Days in advance of the beginning of the
holdback period), each holder of Registrable Securities agrees, to the extent
permitted by law, not to effect any public sale or distribution (including a
sale under Rule 144) of Registrable Securities, or securities convertible into
or exchangeable or exercisable for Registrable Securities, during the 90 days
after the effective date of any registration statement filed by the Company in
connection with an Underwritten Offering of common shares (or securities
convertible into or exercisable or exchangeable for common shares) on behalf of
the Company (or for such shorter period of time as is sufficient and
appropriate, in the opinion of the Managing Underwriter, in order to complete
the sale and distribution of the securities included in such registration),
except as part of such registration statement, whether or not such holder
participates in such registration and each such holder of Registrable Securities
shall sign a customary agreement with the Managing Underwriter with respect to
the matters set forth above to the extent requested by the Managing Underwriter.
These restrictions in this Section shall only apply to the holders of
Registrable Securities in connection with any registration statement filed by
the Company in connection with a primary offering of common stock on behalf of
the Company and only to the extent that all other holders of Registrable
Securities, executive officers of the Company, directors of the Company, all
shareholders that are an Affiliate of a director of the Company and all
beneficial holders of 10% or more of the Company's outstanding common shares
agree to or are bound by the same restrictions.
7. INDEMNIFICATION.
(a) Indemnification by the Company. The Company shall, to the full extent
permitted by law, indemnify and hold harmless each Holder of Registrable
Securities included in any registration statement filed in connection with this
Agreement, its directors, officers, members, partners, trust beneficiaries and
shareholders, and each other Person, if any, who controls any such Holder within
the meaning of the Securities Act, against any losses, claims, damages, expenses
or liabilities (as actions or proceedings in respect thereof), joint or several
(together, "Losses"), to which such Holder or any such director, officer,
member, partner or controlling Person may become subject under the Securities
Act or otherwise, insofar as such Losses (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading and the Company will reimburse such Holder and each such director,
officer, member, partner and controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending against any such Loss (or action or proceeding in respect thereof);
provided, however, that the Company shall not be liable in any such case to the
extent that any such Loss (or action or proceeding in respect thereof) (i) is
caused by or contained in any information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in such registration
statement, preliminary, final or summary prospectus contained therein, or any
amendment or supplement thereto, (ii) is caused by such Holder's failure to
deliver a copy of the current prospectus simultaneously with or prior to such
sale after the Company has furnished such Holder with a sufficient number of
copies of such
Page 29 of 75 Pages
prospectus correcting such material misstatement or omission, or (iii) arises in
respect of any offers to sell or sales made during any period when a Holder is
required to discontinue sales under Sections 1(g), 4(c)(ii) or (iii) or 4(f)
(and after such Holder has received notice as contemplated by any of such
Sections). Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Holder or any such director,
officer, member, partner, trust beneficiaries, shareholders or controlling
Person, and shall survive the transfer of such securities by such Holder
pursuant to Section 14(g) of this Agreement.
(b) Indemnification by the Holders. Each holder of Registrable Securities
which are included or are to be included in any registration statement filed in
connection with this Agreement, as a condition to including Registrable
Securities in such registration statement, shall, to the full extent permitted
by law, severally and not jointly, indemnify and hold harmless the Company, its
directors and officers, and each other Person, if any, who controls the Company
within the meaning of the Securities Act, against any Losses to which the
Company or any such director or officer or controlling Person may become subject
under the Securities Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, if such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished or confirmed in
writing by such holder of Registrable Securities to the Company; provided,
however, that in no event shall any indemnity provided by a Holder under this
Section 7(b) exceed the net proceeds from the offering received by such Holder.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such director, officer,
member, partner, trust beneficiaries, shareholder or controlling Person and
shall survive the transfer of such securities by such Holder pursuant to Section
14(g) of this Agreement.
(c) Notices of Claims, Etc. Promptly after receipt by an Indemnified Party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding paragraph (a) or (b) of this Section 7, such
Indemnified Party will, if a claim in respect thereof is to be made against an
Indemnifying Party pursuant to such paragraphs, give written notice to the
latter of the commencement of such action, provided that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under the preceding paragraphs of this
Section, except to the extent that the Indemnifying Party is actually prejudiced
by such failure to give notice. In case any such action is brought against an
Indemnified Party, the Indemnifying Party shall be entitled to participate in
and to assume the defense thereof, jointly with any other Indemnifying Party
similarly notified to the extent that it may wish, and after notice from the
Indemnifying Party to such Indemnified Party of its election so to assume the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation; provided that the Indemnified Party may participate in such
defense at the Indemnified Party's expense; and provided further that the
Indemnified Party (or Indemnified Parties) shall have the right to employ
Page 30 of 75 Pages
one counsel and one local counsel to represent it (or them, collectively) if, in
the reasonable judgment of the Indemnified Party or Indemnified Parties, it is
advisable for it (or them) to be represented by separate counsel by reason of
having legal defenses which are different from or in addition to those available
to the Indemnifying Party, and in that event the reasonable fees and expenses of
such counsel shall be paid by the Indemnifying Party; provided further, however,
that if certain Indemnified Party (or Indemnified Parties) shall have reasonably
concluded, after consultation with counsel, that there may be defenses available
to it (or them) that are different from, additional to, or in conflict with
those available to one or all of the Indemnified Parties such Indemnified Party
(or Indemnified Parties) shall have the right to employ separately one counsel
and one local counsel to represent it (or them, collectively), and in that event
the reasonable fees and expenses of such one counsel, shall also be paid by the
Indemnifying Party. 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 for the Indemnified Parties with respect to
such claim. No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party 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. No Indemnifying Party shall be subject to any
liability for any settlement made without its consent, which consent shall not
be unreasonably withheld.
(d) Contribution. If the indemnity and reimbursement obligation provided
for in any paragraph of this Section is unavailable or insufficient to hold
harmless an Indemnified Party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the Indemnifying Party
shall contribute to the amount paid or payable by the 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 the Indemnifying
Party on the one hand and the Indemnified Party on the other hand in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Indemnifying Party or the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
paragraph. The amount paid by an Indemnified Party as a result of the Losses
referred to in the first sentence of this paragraph shall be deemed to include
any legal and other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any Loss which is the subject of this
paragraph.
No Indemnified Party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying Party was not
guilty of such fraudulent misrepresentation. No contribution shall be made by an
Indemnifying Party under circumstances where such Party would not have been
liable for indemnification under the fault standards of Section 7. Moreover,
contribution by a Holder of Registrable Securities shall be limited in amount to
the net amount of proceeds received by such Holder from the sale of such
Registrable Securities pursuant to the
Page 31 of 75 Pages
related registration statement. The provisions of this Section 7(d) shall remain
in full force and effect, regardless of the investigation made by or on behalf
of the beneficiaries of this Section 7(d) and shall survive the transfer of
Registrable Securities by the Holders pursuant to Section 14(g) of this
Agreement.
(e) Indemnification Payments. The indemnification required by this Section
7 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Losses are
incurred, provided that each Indemnified Party shall repay such payments if and
to the extent it shall be determined by a court of competent jurisdiction that
such recipient is not entitled to such payment.
8. LISTING REQUIREMENT.
To the extent the Company then has such class of common shares listed on a
U.S. national securities exchange or quoted on a U.S. national automated
interdealer quotation system, the Company will use its commercially reasonable
best efforts to list the common shares included in any registration statement
filed pursuant to this Agreement, on such U.S. national securities exchange or
to have the common shares included in a registration statement quoted on such
U.S. national automated interdealer quotation system as promptly as practicable
following the declaration of effectiveness of any registration statement
contemplated hereby.
9. RULE 144
As long as any Holder owns Registrable Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As long
as any Holder owns Registrable Securities, if the Company is not required to
file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will
prepare and furnish to the Holders and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act annual financial
statements, together with a discussion and analysis of such financial statements
in form and substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the
Exchange Act. The Company further covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Person to sell Registrable Securities without
registration under the Securities Act. Upon the request of any Holder, the
Company shall deliver to such Holder a written certification of a duly
authorized office as to whether it has complied with such requirements.
10. OTHER REGISTRATION RIGHTS.
Other than this Agreement, that certain Amended and Restated Canadian
Registration Rights Agreement dated the date hereof by and among the Company and
the parties thereto, that certain Canadian registration rights agreement dated
the date hereof entered into with Greywolf Capital Management LP and that
certain Registration Rights Agreement by and among the company and certain
parties dated as of August 22, 2005 (the "Prior Registration
Page 32 of 75 Pages
Rights Agreement"), the Company represents and warrants to the Holders that
there is not in effect on the date hereof any agreement by the Company pursuant
to which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or any
securities or blue sky laws of any jurisdiction. The Company agrees that, for so
long as any Holder is entitled to registration rights under this Agreement, the
Company shall not enter into any agreement granting registration rights with
respect to the Company's capital stock that conflicts with or impairs, or has
any priority over, the registration rights granted hereby. Notwithstanding
anything herein to the contrary, in no event shall any provision hereof be
construed in a manner that conflicts with or impairs, or has any priority over,
the registration rights granted pursuant to the Prior Registration Rights
Agreement. The rights granted hereunder are subject in all respects to the
rights granted pursuant to the Prior Registration Rights Agreement.
11. LIQUIDATED DAMAGES.
The Company and the Holders agree that the Holders of Registrable
Securities will suffer damages if the Company fails to fulfill its obligations
under Section 1 or 2 of this Agreement and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, the Company
agrees to pay liquidated damages ("Liquidated Damages") on the Registrable
Securities requested to be registered either pursuant to a Demand Request or a
Form F-3 Demand (collectively, "Demand Registrable Securities") under the
circumstances and to the extent set forth below (each of which shall be given
independent effect; each a "Registration Default"):
(a) if the Corporation does not file, to the extent required hereunder, as
applicable: (i) a Demand Registration Statement with the Commission within
forty-five (45) days after the date of the delivery of the Demand Request or
(ii) a Form F-3 registration statement within thirty (30) days after delivery of
the Form F-3 Demand, Liquidated Damages shall accrue on the Demand Registrable
Securities at a rate of 2% per annum on the Amount of Demand Registrable
Securities;
(b) if the Corporation fails to keep the Demand Registration Statement or
Form F-3 effective in compliance with the provisions of the Securities Act with
respect to the disposition or all Demand Registrable Securities covered by such
registration statement until such time (not to exceed 270 days) as all of such
Demand Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the Holders set forth in such registration
statement, Liquidated Damages shall accrue on the Demand Registrable Securities
at a rate of 2% per annum on the Amount of Demand Registrable Securities;
(c) if the Demand Registration Statement is not declared effective by the
Commission within ninety (90) days after the date of delivery of the Demand
Request or if the Form F-3 registration statement is not declared effective by
the Commission within thirty (30) days of the date of delivery of the From F-3
Demand:
(i) Liquidated Damages shall accrue on the Demand Registrable
Securities at a rate of 0.5% per annum on the Amount of Demand
Page 33 of 75 Pages
Registrable Securities for the thirty (30) day period following the 90th
day or 30th day, as applicable, after the date of delivery of the Demand
Request;
(ii) Liquidated Damages shall accrue on the Demand Registrable
Securities at a rate of 1% per annum on the Amount of Demand Registrable
Securities for the thirty (30) period following the 120th day or 60th day,
as applicable, after the date of delivery of the Demand Request;
(iii) Liquidated Damages shall accrue on the Demand Registrable
Securities at a rate of 1.5% per annum on the Amount of Demand Registrable
Securities for the thirty (30) period following the 150th day or 90th day,
as applicable, after the date of delivery of the Demand Request; and
(iv) Liquidated Damages shall accrue on the Demand Registrable
Securities at a rate of 2% per annum on the Amount of Demand Registrable
Securities for the period following the 180th day or 120th day, as
applicable, after the date of delivery of the Demand Request;
provided, however, that upon cure of the circumstance giving rise to Liquidated
Damages, Liquidated Damages on the Demand Registrable Securities as a result of
such clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
The Company shall notify the Holders of Demand Registrable Securities
within two Business Days after each and every date on which an event occurs
in respect of which Liquidated Damages is required to be paid. Any amounts
of Liquidated Damages due pursuant to this Section will be payable in cash
monthly on the last day of each month (each, a "Damages Payment Date"),
commencing with the first such date occurring after any such Liquidated
Damages commences to accrue, pro rata to the Holders with respect the
Demand Registrable Securities that are the subject of the applicable
Registration Default. The amount of Liquidated Damages for Demand
Registrable Securities will be determined by multiplying the applicable
rate of Liquidated Damages by the Amount of Demand Registrable Securities
that are the subject of the applicable Registration Default outstanding on
the Damages Payment Date following such Registration Default in the case of
the first such payment of Liquidated Damages with respect to a Registration
Default (and thereafter at the next succeeding Damages Payment Date until
the cure of such Registration Default), multiplied by a fraction, the
numerator of which is the number of days such Liquidated Damages rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
12. NOTICE AND QUESTIONNAIRE.
Each Holder wishing to sell Registrable Securities pursuant to a
registration statement and related prospectus hereunder agrees to deliver at
least three (3) Business Days prior to any intended distribution of Registrable
Securities under such registration statement such information regarding such
Holder, the Registrable Securities held by such Holder as set forth in the
Notice and Questionnaire in the form attached hereto as Exhibit A (a "Notice and
Questionnaire"); provided, that a Holder shall not be required to deliver such
Notice and
Page 34 of 75 Pages
Questionnaire prior to any such intended distribution to the extent it has
previously provided a Notice and Questionnaire.
13. DEFINITIONS.
Except as otherwise specifically indicated, the following terms will have
the following meanings for all purposes of this Agreement:
"Affiliate" means, with respect to any Person, (i) any other Person of
which securities or other ownership interests representing more than fifty
percent (50%) of the voting interests are, at the time such determination is
being made, owned, Controlled or held, directly or indirectly, by such Person or
(ii) any other Person which, at the time such determination is being made, is
Controlling, Controlled by or under common Control with, such Person. As used
herein, "Control,", whether used as a noun or verb, refers to the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of a Person, whether through the ownership of voting
securities or otherwise.
"Agreement" means this Amended and Restated Registration Rights Agreement,
as the same shall be amended or modified from time to time.
"Amount of Demand Registrable Securities" means the aggregate number of
Registrable Securities requested by the Holders to be registered pursuant to a
Demand Registration or a Form F-3 Demand, as applicable, multiplied by the par
value of the aggregate Demand Registrable Securities.
"Business Day" means a day other than Saturday, Sunday or any other day on
which banks located in the State of New York are authorized or obligated to
close.
"Commission" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority.
"Company" has the meaning ascribed to it in the preamble.
"Damages Payment Date" has the meaning ascribed to it in Section 11.
"Demand Request" has the meaning ascribed to it in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Form F-3" means Form F-3 promulgated by the Commission under the
Securities Act, or any successor or similar (including a Form F-10, if
available) registration statement.
"Form F-3 Demand" has the meaning ascribed to it in Section 2(a).
"Holder" has the meaning ascribed to it in the preamble.
Page 35 of 75 Pages
"Holder Information" means information furnished in writing or confirmed in
writing to the Company by or on behalf of a Holder specifically for use in a
registration statement filed by the Company pursuant to this Agreement.
"Indemnified Party" means a party entitled to indemnity in accordance with
Section 7.
"Indemnifying Party" means a party obligated to provide indemnity in
accordance with Section 7.
"Inspectors" has the meaning ascribed to it in Section 4(h).
"Liquidated Damages" has the meaning ascribed to it in Section 11.
"Losses" has the meaning ascribed to it in Section 7(a).
"Managing Underwriter" means, with respect to any Public Offering, the
underwriter or underwriters managing such Public Offering.
"Maximum Offering Quantity" shall have the meaning ascribed thereto in
Section 3(b) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Non-Public Information" has the meaning ascribed to it in Section 1(b).
"Notice and Questionnaire" has the meaning ascribed to it in Section 12.
"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union or association.
"Piggyback Registration" shall have the meaning ascribed thereto in Section
3(a) hereof.
"Public Offering" means any offering of the Company's common shares to the
public, either on behalf of the Company or any of its securityholders, pursuant
to an effective registration statement under the Securities Act.
"Purchase Agreement" has the meaning ascribed to it in the preamble.
"Prior Registration Rights Agreement" has the meaning ascribed to it in
Section 10.
"Records" has the meaning ascribed to it in Section 4(h).
"Registrable Securities" means (i) the Shares and (ii) any additional
securities issued or issuable with respect to (i) above by virtue of any stock
split, combination, stock dividend, merger, consolidation or other similar
event. As to any particular Registrable Security,
Page 36 of 75 Pages
such security shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such Registrable Securities shall have
been disposed of in accordance with such registration statement, (ii) they shall
have been sold pursuant to Rule 144, (iii) the holding period applicable to such
Registrable Security held by non-affiliates of the Company under Rule 144(k)
under the Securities Act, or any successor provision, shall have expired or (iv)
they shall have ceased to be outstanding.
"Registration Default" has the meaning ascribed to it in Section 11.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations under this Agreement to effect
and maintain the registration of Registrable Securities in accordance with
Section 1, 2 or 3, including, without limitation, all registration, filing,
securities exchange listing and NASD fees (including Nasdaq fees, if
applicable), all registration, filing, qualification and other fees and expenses
of complying with securities or blue sky laws (including fees of counsel
retained by the holders of a majority of Registrable Securities being registered
to advise the holders with respect to all of the foregoing matters, not to
exceed $25,000 in respect of any one registration statement, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance in
connection with an underwritten offering and any fees and disbursements of
underwriters customarily paid by issuers or holders of securities, but excluding
underwriting discounts and commissions, brokers' fees or fees of similar
securities professionals and transfer taxes, if any, in respect of Registrable
Securities, which shall be payable by each holder thereof.
"Requesting Holder" has the meaning ascribed to it in Section 1(a)(i).
"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shares" has the meaning ascribed to it in the preamble.
"Underwritten Offering" means a registered offering in which securities are
sold to one or more underwriters on a firm commitment basis for reoffering to
the public.
14. MISCELLANEOUS.
(a) Notices. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (registered or certified mail,
postage prepaid) to the parties at the following addresses or facsimile numbers:
If to Holder, to the addresses set forth on the signature pages hereof.
Page 37 of 75 Pages
If to the Company, to:
SR Telecom Inc.
8150 TransCanada Highway
Montreal, Quebec
H4S 1M5
Canada
Attn: Chief Financial Officer
Telephone No.: 514-335-1210
Facsimile No.: 514-956-4405
With a copy to:
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036
USA
Attn: Ronald A. Fleming
Telephone No.: 212-858-1143
Facsimile No.: 212-858-1500
With respect to any Holder, such notices, requests and other communications
shall be sent to their respective addresses set forth on the signature pages to
this Agreement or in the stock transfer records regularly maintained by the
Company. All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the facsimile
number as provided in this Section, be deemed given when sent by confirmed
facsimile if sent during normal business hours of the recipient, if not, then on
the next Business Day, and (iii) if delivered by mail in the manner described
above to the address as provided in this Section, be deemed given five days
after deposit with the United States Post Office (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.
(b) Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof, and
contains the sole and entire agreement between the parties hereto with respect
to the subject matter hereof.
(c) Amendment. This Agreement may be amended, supplemented or modified only
by a written instrument (which may be executed in any number of counterparts)
duly executed by or on behalf of each of the Company and Holders owning more
than fifty percent (50%) of the Registrable Securities; provided, however, that
any amendment or modification affecting Section 2 or Section 3 shall hereof
require only the prior written consent of each of the Holders and the Company.
Page 38 of 75 Pages
(d) Waiver. Subject to paragraph (e) of this Section, any term or condition
of this Agreement may be waived at any time by the party that is entitled to the
benefit thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condition of this Agreement,
in any one or more instances, shall be deemed to be or construed as a waiver of
the same term or condition of this Agreement on any future occasion.
(e) Consents and Waivers by Holders of Registrable Securities. Any consent
of the holders of Registrable Securities pursuant to this Agreement, and any
waiver by such holders of any provision of this Agreement, shall be in writing
(which may be executed in any number of counterparts) and may be given or taken
by Holders owning more than fifty percent (50%) of the Registrable Securities
and any such consent or waiver so given or taken will be binding on all the
holders of Registrable Securities; provided, however, that any amendment or
modification affecting Section 2 or Section 3 hereof shall require only the
prior written consent of each of the Holder and the Company.
(f) No Third Party Beneficiary. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or assigns. It is not the intention of the parties to confer
third-party beneficiary rights upon any other Person other than any Person
entitled to indemnity under Section 7.
(g) Successors and Assigns. This Agreement is binding upon, inures to the
benefit of and is enforceable by the Company and the Holders (or the Person or
Persons for which a Holder is acting as fiduciary or agent, as the case may be)
and their respective successors and assigns; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign unless and except to the extent such successor or assign holds
Registrable Securities (or, in the case of Registrable Securities in the form of
Credit Agreement Shares, such successor or assign holds the convertible term
loans that are convertible into such Credit Agreement Shares) and has provided a
written instrument to the Company notifying the Company of such transfer and
assignment and agreeing in writing to be bound by this Agreement; provided,
further, that nothing herein shall be deemed to permit any assignment, transfer
or other disposition of Registrable Securities in violation of the terms hereof,
the Securities Act or any securities or blue sky laws of any jurisdiction.
(h) Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(i) Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
(j) Remedies. Except as otherwise expressly provided for herein, no remedy
conferred by any of the specific provisions of this Agreement is intended to be
exclusive
Page 39 of 75 Pages
of any other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or more
remedies by any party hereto shall not constitute a waiver by any such party of
the right to pursue any other available remedies.
Damages in the event of breach of this Agreement by a party hereto or any
other holder of Registrable Securities would be difficult, if not impossible, to
ascertain, and it is therefore agreed that each such Person, in addition to and
without limiting any other remedy or right it may have, will have the right to
an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms and provisions
hereof and the Company and each holder of Registrable Securities, by its
acquisition of such Registrable Securities, hereby waives any and all defenses
it may have on the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. The existence of this right
will not preclude any such Person from pursuing any other rights and remedies at
law or in equity which such Person may have.
(k) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(l) Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[Signatures on next page.]
Page 40 of 75 Pages
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party hereto as of the date first above
written.
SR TELECOM INC.
By: /s/ illegible
--------------------------------------
Name:
Title:
Page 41 of 75 Pages
[Signature Page to the Registration Rights Agreement]
B IV CAPITAL PARTNERS, L.P
By: GP Capital IV, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 42 of 75 Pages
[Signature Page to the Registration Rights Agreement]
GMAM INVESTMENT FUNDS TRUST II, for the
account of the Promark Alternative High Yield
Bond Fund (Account No. 7M2E)
By: DDJ Capital Management, LLC, on behalf
of GMAM Investment Funds Trust II, for the
account of the Promark Alternative High Yield
Bond Fund, in its capacity as investment manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 43 of 75 Pages
[Signature Page to the Registration Rights Agreement]
GMAM INVESTMENT FUNDS TRUST II, for the
account of the Promark High Yield Bond Fund
(Account No. 7MWD)
By: DDJ Capital Management, LLC, on behalf of
GMAM Investment Funds Trust II for the account
of the Promark High Yield Bond Fund, in its
capacity as investment manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 44 of 75 Pages
[Signature Page to the Registration Rights Agreement]
DDJ CANADIAN HIGH YIELD FUND
By: DDJ Capital Management, LLC, its
attorney-in-fact
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 45 of 75 Pages
[Signature Page to the Registration Rights Agreement]
DDJ OCTOBER FUND ONSHORE FEEDER,
LIMITED PARTNERSHIP
By: October G.P., LLC, its general partner
By: DDJ Capital Management, LLC, its Manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 46 of 75 Pages
[Signature Page to the Registration Rights Agreement]
OCTOBER OS INVESTMENT SUB 2006, LTD.
By: DDJ Capital Management, LLC, in its
capacity as Investment Manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 47 of 75 Pages
[Signature Page to the Registration Rights Agreement]
THE OCTOBER FUND LIMITED PARTNERSHIP
By: October G.P., LLC, its General Partner
By: DDJ Capital Management, LLC, its
Manager
By: /s/ David J. Breazzano
--------------------------------------
Name: David J. Breazzano
Title: Member
Address:
c/o DDJ Capital Management, LLC
130 Turner Street
Building 3, Suite 600
Waltham, MA 02453
Telephone: (781) 283-8511
Facsimile: (781) 419-9111
Attention: Joshua L. McCarthy
Page 48 of 75 Pages
[Signature Page to the Registration Rights Agreement]
GREYWOLF CAPITAL MANAGEMENT L.P., on
behalf of Greywolf Capital Overseas Fund and
Greywolf Capital Partners II LP
/s/ Michelle Lynd
------------------------------
By: Michelle Lynd
Authorized Signatory
--------------------------------------
Name:
Title:
Greywolf Capital Management LP
4 Manhattanville Road
Suite 201
Address: Purchase, NY 10577
Phone number: 914-251-8200
Facsimile number: 917-251-8244
Attention: J. McInnis
Page 49 of 75 Pages
[Signature Page to the Registration Rights Agreement]
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Jeff Markowitz
--------------------------------------
Name: Jeff Markowitz
Title: Managing Director
Address:
750 Seventh Avenue, 9th Floor
New York, New York 10019
Telephone: (212) 762-3800
Facsimile:
Attention:
Page 50 of 75 Pages
[Signature Page to the Registration Rights Agreement]
MORGAN STANLEY & CO.
INTERNATIONAL LIMITED
By: /s/ illegible
--------------------------------------
Name:
Title:
Address:
25 Cabot Square
London, E14 4QA
Telephone: 0207 056 0966
Facsimile: 0207 677 4608
Attention: Charlotte Denham
Page 51 of 75 Pages
EXHIBIT A
---------
NOTICE AND QUESTIONNAIRE(1)
1. (a) Full Legal Name of Selling Shareholder:
-----------------------------------------------------------------------
(b) Full Legal Name of Investor (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
-----------------------------------------------------------------------
2. Address for Notices to Selling Shareholder:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Telephone:
----------------------------------------------------------------------
Fax:
----------------------------------------------------------------------------
Contact Person:
-----------------------------------------------------------------
3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount or number of Registrable Securities
beneficially owned:
-----------------------------------------------------------------
-----------------------------------------------------------------
(b) CUSIP No(s). of such Registrable Securities beneficially owned:
-----------------------------------------------------------------
-----------------------------------------------------------------
--------
(1) Capitalized terms not defined herein shall have the meaning ascribed
to in the Amended and Restated Registration Rights Agreement, dated
December 15, 2006, by and among SR Telecom Inc. and the holders
identified in the signature pages.
A-1
Page 52 of 75 Pages
4. Beneficial Ownership of Other Securities of the Company Owned by the
Selling Shareholder.
Except as set forth below in this Item 4, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Registrable Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the Selling
Shareholder:
------------------------------------------------------------------
------------------------------------------------------------------
(b) CUSIP No(s). of such Other Securities beneficially owned:
------------------------------------------------------------------
------------------------------------------------------------------
5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of more
than 5% of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
------------------------------------------------------------------
------------------------------------------------------------------
6. Broker-Dealers and their Affiliates
(a) Is the Selling Shareholder a broker-dealer or an affiliate of a
broker-dealer:
Yes ____ No ____
If so, please answer the remaining question in this section.
A-2
Page 53 of 75 Pages
(i) Please advise whether the Registrable Securities were received by
the Selling Shareholder as compensation for investment banking
services or as investment shares, and if so please describe the
circumstances.
Note that in general we may be required to identify any registered
broker-dealer as an underwriter in the prospectus.
(ii) Except as set forth below, if the Selling Shareholder is a
registered broker-dealer, the Selling Shareholder does not plan
to make a market in the Registrable Securities. If the Selling
Shareholder plans to make a market in the Registrable Securities,
please indicate whether the Selling Shareholder plans to use the
prospectus relating to the Registrable Securities as a
market-making prospectus.
(b) Affiliation with Broker-Dealers
Is the Selling Shareholder an affiliate(2) of a registered
broker-dealer?
Yes ____ No ____
If so, please answer the remaining question in this section.
(i) Please describe the affiliation between the Selling Shareholder
and any registered broker-dealer.
(ii) If the Registrable Securities were purchased by the Selling
Shareholder other than in the ordinary course of business, please
describe the circumstances.
(iii) Please advise whether the Registrable Securities were received by
the Selling Shareholder as compensation for investment banking
services or as investment shares, and if so please describe the
circumstances.
(iv) If the Selling Shareholder, at the time of its purchase of
Registrable Securities, had any agreements or understandings,
directly or indirectly, with any person to distribute the
Registrable Securities, please describe such agreements or
undertakings.
Note that if the Selling Shareholder is an affiliate of a broker-dealer and
did not purchase its Registrable Securities in the ordinary course of
business or at the time of the purchase had any agreements or
understandings, directly or indirectly, to distribute the
--------
(2) An "affiliate" of a specified person or entity means a person or
entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, the person or entity specified. For purposes of this
definition, "control", refers to the possession, directly or
indirectly, of the power to direct, or cause the direction of, the
management or policies of a person, whether through the ownership of
voting securities or otherwise.
A-3
Page 54 of 75 Pages
securities, we may be required to identify the Selling Shareholder as an
underwriter in the prospectus.
(c) Beneficial Ownership by Natural Persons:
If the Selling Shareholder is an entity, does any natural person have
voting or investing power over the Registrable Securities held by the
Selling Shareholder?(3)
If so, please state the person's or persons' name(s):
7. Beneficial Ownership by Natural Persons or by a Board or Committee
Is the Selling Shareholder a reporting entity with the Securities and
Exchange Commission?
If the Selling Shareholder is a majority owned subsidiary of a reporting
entity, identify the majority stockholder that is a reporting entity.
Yes ____ No ____
If No, please answer the remaining questions in this section.
(i) Please name the natural person or person(s) having voting and/or
investment control over the Selling Shareholder.(4)
(ii) If the voting and/or investment control over the Selling
Shareholder is held by board or committee, please state the name
of the natural person or person(s) on such board or committee.
--------
(3) Please answer "Yes" if any natural person, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise has or shares: (a) voting power which includes the power to
vote, or to direct the voting of, such security; and/or, (b)
investment power which includes the power to dispose, or to direct the
disposition of, the Registrable Securities held by the Selling
Shareholder.
(4) Please include any natural person that, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise has or shares: (a) voting power which includes the power to
vote, or to direct the voting of, such security; and/or, (b)
investment power which includes the power to dispose, or to direct the
disposition of, the Registrable Securities held by the Selling
Shareholder.
A-4
Page 55 of 75 Pages
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: Beneficial Owner:
----------------- -----------------------------
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
A-5
Page 56 of 75 Pages
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO SR TELECOM INC.
SR Telecom Inc.
8150 Trans-Canada Hwy
Montreal, QC H45 1M5
Canada
Telephone: 514-335-1210
Attention: [______________]
Page 57 of 75 Pages
EXHIBIT 4
to
SCHEDULE 13D
SR TELECOM INC.
- and -
THE PARTIES SPECIFIED ON
THE SIGNATURE PAGES HEREOF
CANADIAN REGISTRATION RIGHTS AGREEMENT
DATED AS OF THE 15TH DAY OF DECEMBER, 2006
Page 58 of 75 Pages
TABLE OF CONTENTS
Page
ARTICLE I INTERPRETATION.......................................................2
1.1 Definitions..................................................2
ARTICLE II REGISTRATION RIGHTS.................................................3
2.1 Demand Registrations.........................................3
2.2 Piggy-Back Registration Rights.................. ............3
2.3 Registration Expenses........................................4
2.4 Short-Form Registrations.....................................4
2.5 Restrictions on Demand Registrations.........................5
2.6 Selection of Underwriters....................................6
ARTICLE III REGISTRATION PROCEDURES............................................6
3.1 Procedures...................................................6
3.2 Other Sales..................................................8
3.3 Obligations of Holder........................................8
ARTICLE IV DUE DILIGENCE, INDEMNIFICATION......................................9
4.1 Preparation; Reasonable Investigation........................9
4.2 Indemnification.............................................10
ARTICLE V GENERAL.............................................................12
5.1 No Inconsistent Agreements..................................12
5.2 Remedies....................................................12
5.3 Amendments..................................................12
5.4 Assignment..................................................13
5.5 Counterparts................................................13
5.6 Severability................................................13
5.7 Delays or Omissions.........................................13
5.8 Descriptive Headings........................................13
5.9 Governing Law...............................................13
5.10 Notices.....................................................14
5.11 Termination.................................................14
5.12 Prior Registration Rights Agreements........................14
Page 59 of 75 Pages
CANADIAN REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is dated as of the 15th day of December, 2006.
BETWEEN
SR TELECOM INC., a corporation incorporated under the laws of
Canada (the "Company").
- and -
The Parties specified on the signature pages hereof.
RECITALS:
WHEREAS, certain of the parties hereto, other than the Company,
currently own 135,928,924 common shares of the Company;
WHEREAS, certain of the parties hereto as of the date hereof have
entered into that certain Eighth Amending Agreement between the Company, as
borrower, BNY Trust Company of Canada, as agent, and the lenders party thereto,
further amending the Credit Agreement, dated as of May 19, 2005, between the
Company, BNY Trust Company of Canada and the lenders party thereto (as the same
may from time to time be amended, restated, modified or supplemented, the
"Credit Agreement");
WHEREAS, pursuant to the Credit Agreement, the lenders thereunder,
including Greywolf, have made a convertible term loan to the Company which loan
and interest accrued thereon are convertible into common shares of the Company
(the "Credit Agreement Shares") and shall be evidenced by convertible notes
("Convertible Notes") issued by the Company ( the "Credit Agreement Shares"
together with all other common shares now owned or hereafter acquired by the
parties hereto, other than the Company, are hereinafter referred to as the
"Common Shares");
WHEREAS, in connection with the Credit Agreement, the Company desires
to grant the parties hereto that are lenders under the Credit Agreement certain
registration rights with respect to the Credit Agreement Shares and is also
desirous of granting the parties hereto that otherwise hold common shares
registration rights with respect to the common shares; and
WHEREAS, the Company and the parties hereto hereby agree that this
Agreement shall govern the rights of the parties to cause the Company to qualify
for distribution all Common Shares now or hereafter owned by them (including
those issuable on conversion of the Convertible Notes);
Page 60 of 75 Pages
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each of the
parties), the parties hereto agree as follows:
ARTICLE I
INTERPRETATION
--------------
1.1 Definitions.
-----------
In this Agreement, the following terms shall have the meanings set out below.
"Commissions" means the securities commissions or other securities authorities
in each of the provinces of Canada.
"Demand Registration" shall have the meaning set out in Section 2.1.
"Greywolf" means Greywolf Capital Management LP or an affiliate thereof.
"Holder" means each of those funds and/or accounts that Greywolf manages or
exercises control or direction over that are or hereafter become holders of
Common Shares and that are listed on the signature pages of this Agreement, and
"Holders" means all of them.
"Person" means an individual, partnership, joint venture, trust, unincorporated
association, unincorporated syndicate, corporation or a government or any
department or agency thereof.
"Piggy-Back Registration" shall have the meaning set out in Section 2.2.
"Registrable Securities" means:
(a) Common Shares; and
(b) any securities of the Company issued in exchange for or in
replacement of the Common Shares
owned by the Holder at the date hereof or thereafter (including all Common
Shares issuable on conversion of the Convertible Notes).
"Registration" means the qualification of common shares of the Company under any
of the Securities Acts for distribution in any or all of the provinces of
Canada.
"Registration Expenses" means all expenses (other than fees or commissions
payable to an underwriter, investment banker, manager or agent in connection
with the distribution of the Registrable Securities) in connection with any
Demand Registration or Piggy-Back Registration pursuant to this Agreement
including, without limitation, the following:
(a) all fees, disbursements and expenses of counsel and auditors
to the Company and the Holder;
Page 61 of 75 Pages
(b) all expenses in connection with the preparation, translation,
printing and filing of any preliminary prospectus, prospectus
or any other offering document and any amendments and
supplements thereto and the mailing and delivering of copies
thereof to any underwriters and dealers;
(c) all filing fees of any Commission;
(d) all transfer agents', depositaries' and registrars' fees and
the fees of any other agent appointed by the Company in
connection with the Demand Registration;
(e) all expenses relating to the preparation of certificates for
the Registrable Securities; and
(f) all fees and expenses payable in connection with the listing
of any Registrable Securities on each securities exchange or
over the counter market on which the Common Shares are then
listed.
"Securities Acts" means the applicable securities legislation of each of the
provinces of Canada and all published regulations, policy statements, orders,
rules, rulings, communiques and interpretation notes issued thereunder or in
relation thereto, as the same may hereafter be amended or replaced.
ARTICLE II
REGISTRATION RIGHTS
-------------------
2.1 Demand Registrations.
--------------------
At any time and from time to time, each Holder individually, or together with
the other Holders, may require the Company to effect a qualification under the
Securities Acts of all or part of the Registrable Securities owned or over which
the Holder exercises control or direction for their distribution in any or all
of the provinces of Canada, provided that the reasonably anticipated aggregate
gross proceeds to be raised (before any underwriting discounts and commissions)
would be equal to or exceed $1,000,000 (such qualification being hereinafter
referred to as a "Demand Registration"). Any such request shall be in writing
and shall specify the number and the class or classes of Registrable Securities
to be sold (the "Designated Registrable Securities"), the intended method of
disposition and the jurisdictions in which the qualification is to be effected.
2.2 Piggy-Back Registration Rights.
------------------------------
If the Company proposes to effect a Registration of common shares for a treasury
offering of common shares by the Company or for a secondary offering of common
shares, the Company will, at that time, give each Holder prompt written notice
of the proposed Registration. Upon the written request of a Holder given within
five (5) Business Days after receipt of notice from the Company of the proposed
Registration, the Company will use reasonable commercial efforts to, in
conjunction with the proposed Registration, cause to be included in such
Registration all of the
Page 62 of 75 Pages
Registrable Securities held by the Holder that the Holder has requested to be
included in such distribution pursuant to the Securities Acts (such
qualification of the Registrable Securities held by the Holder being hereinafter
referred to as a "Piggy-Back Registration"). If any offering pursuant to this
Section 2.2 involves an underwritten offering and the lead underwriter or
underwriters advise the Company in writing that, in their opinion, acting
reasonably, the number of Registrable Securities requested by the Holder to be
included in such offering either exceeds the number that can be sold in such
offering within a price range acceptable to the Company (the "Sale Number") or
may materially and adversely affect the success of the offering, the Company
will
(a) in the case of a treasury offering by the Company, include in
such offering:
(i) all common shares that the Company proposes to
qualify for its own account (the "New Common
Shares"); and
(ii) to the extent the number of New Common Shares is less
than the Sale Number, that number of common shares
not to exceed the difference between the Sale Number
and the number of New Common Shares, with such number
of common shares being equal to the aggregate number
of
(A) Registrable Securities requested to be
included by the Holder; and
(B) common shares of any other selling
shareholder with registration rights, with
(A) and (B) pro rated to each of the
seller's respective shareholdings on a fully
diluted basis; and
(b) in the case of a secondary offering, include the number of
Registrable Securities agreed upon by the Holder with the
other selling shareholders not to exceed the Sale Number or if
the selling shareholders cannot agree upon such number not to
exceed the Sale Number pro rated to each of the sellers'
respective shareholdings on a fully diluted basis.
In the event a Holder does not include in a registration by way of secondary
offering any Registrable Securities, it shall not be permitted to effect a
Demand Registration for a period of 45 days from the closing of the offering.
2.3 Registration Expenses.
---------------------
The Company will pay all Registration Expenses in connection with a Demand
Registration and/or a Piggy-Back Registration, provided that, in connection with
any one Demand Registration or any one Piggy-Back Registration, the Company
shall not be liable for any of the Holders' legal fees in excess of $25,000.
2.4 Short-Form Registrations.
------------------------
If at the time a Demand Registration is delivered or at the time that notice of
a Piggy-Back Registration is given, the Company has in force a receipt for its
Annual Information Form from the Commissions in all of the jurisdictions in
which the Demand Registration is to be effected
Page 63 of 75 Pages
and meets the eligibility criteria to file a prospectus pursuant to the
requirements of National Instrument 44-101 or any successor, rule, regulation or
similar instrument established from time to time by Commissions in Canada ("NI
44-101"), the Company will effect such Demand Registration or Piggy-Back
Registration by way of a short-form prospectus prepared pursuant to NI 44-101.
2.5 Restrictions on Demand Registrations.
------------------------------------
(a) The Company shall not be obligated to effect more than two
Demand Registrations hereunder while it does not meet the
eligibility criteria set out in NI 44-101 to file a short-
form prospectus. There shall be no restriction on the number
of Demand Registrations that may be requested at a time in
which the Company meets the eligibility requirements for a
short-form prospectus filing pursuant to NI 44-101.
Notwithstanding the foregoing, the Company shall not be
obligated to effect a Demand Registration by way of short-form
prospectus more than once in any given six (6) month period.
For the purposes of this subsection, a Demand Registration
will not be considered as having been effected until a final
receipt has been issued in all jurisdictions for the
prospectus pursuant to which the Registrable Securities are to
be sold.
(b) Notwithstanding Section 2.1, the Company is not obligated to
comply with a Holder's request for a Demand Registration for a
period (the "Standstill Period") ending on the earlier of:
(i) 90 days following the date on which the Company gave
notice (a "Standstill Notice") to the Holders that
the Company is in the course of offering Common
Shares (or securities convertible into or carrying
the right to acquire Common Shares), or that it
intends to do so within 30 days of such notice;
(ii) 45 days following completion of the offering
described in clause (i); and
(iii) 45 days after the giving of the Standstill Notice if
(1) in the case of an offering by way of prospectus,
no preliminary prospectus has been filed by the end
of the 45 day period; and (2) in the case of an
offering by way of private placement, binding
subscription agreements have not been entered into by
the end of the 45 day period or an offering
memorandum has not been distributed to potential
purchasers by the end of the 45 day period;
if, in the opinion of the Company's investment dealer acting
reasonably (with a copy of such written opinion to be supplied
by the Company to the Holders), the sale of Registrable
Securities pursuant to such Demand Registration at the time
and on the terms requested would materially and adversely
affect the offering of Common Shares (or securities
convertible into or carrying the right to acquire Common
Shares) undertaken or to be undertaken by the Company. The
Company may not deliver a Standstill Notice after receipt by
the Company of a Demand
Page 64 of 75 Pages
Registration and may not give a Standstill Notice to the
Holders for a period of 60 days following the termination of
any Standstill Period.
2.6 Selection of Underwriters.
-------------------------
Subject to the approval of the Company, which approval shall not be unreasonably
withheld, the Holders will have the sole right to select the investment
banker(s) and manager(s) to administer the offering in connection with the
Demand Registration.
ARTICLE III
REGISTRATION PROCEDURES
-----------------------
3.1 Procedures.
----------
Upon receipt of a request from a Holder pursuant to Section 2.1, the Company
will effect a Demand Registration as requested. In particular, the Company will
as expeditiously as possible:
(a) prepare and file (in any event within 60 days after the
request for Demand Registration has been delivered to the
Company) in the English and, if required, French languages, a
preliminary prospectus under and in compliance with the
Securities Acts in each jurisdiction in which the Demand
Registration is to be effected and such other related
documents as may be necessary to be filed in connection with
any such preliminary prospectus and shall, as soon as possible
after any comments of the Commissions have been satisfied with
respect thereto, prepare and file under and in compliance with
the Securities Acts a prospectus in the English and, if
required, French languages, and receive receipts therefor and
use its best efforts to cause a receipt to be issued for such
prospectus as soon as possible and shall take all other steps
and proceedings that may be necessary in order to qualify the
Designated Registrable Securities under the applicable
Securities Acts for distribution by registrants who comply
with the relevant provisions of the Securities Acts (provided
that, before filing all such documents referred to in this
Section 3.1(a), the Company will furnish to the counsel to the
Holder copies thereof and otherwise comply with Section 4.1
hereof);
(b) prepare and file with the applicable Commissions in the
jurisdictions in which the Demand Registration is to be
effected such amendments and supplements to such preliminary
prospectus and prospectus as may be necessary to comply with
the provisions of the applicable Securities Acts with respect
to the distribution of Designated Registrable Securities, and
to take such steps as are necessary to maintain the
qualification of such prospectus until the earlier of (i) the
time at which the distribution of the Designated Registrable
Securities is completed and (ii) six months after the receipt
for such prospectus has been issued by each of the applicable
Commissions (provided that, before filing such documents, the
Page 65 of 75 Pages
Company will furnish to the counsel to the Holder copies
thereof and otherwise comply with Section 4.1 hereof);
(c) furnish to the Holders such number of copies of such
preliminary prospectus, prospectus, and any amendment and
supplement thereto (including any documents incorporated
therein by reference) and such other relevant documents as
such Holder may reasonably request in order to facilitate the
disposition of the Designated Registrable Securities owned by
the Holder;
(d) cause to be furnished to the Holders, the underwriter or
underwriters of any offering and such other persons as the
Holders may reasonably specify:
(i) an opinion of counsel to the Company addressed to the
Holders and the underwriter or underwriters of such
offering and dated the closing date of the offering
as to the Company's legal status and capacity, the
Company's authorized share capital, the validity of
the Designated Registrable Securities, the
"eligibility for investment" of the Designated
Registrable Securities, the enforceability of any
underwriting agreement to which the Company is a
party, and the qualification of the Registrable
Securities for sale;
(ii) a non-statutory "comfort" letter addressed to the
underwriter or underwriters dated the date of the
preliminary prospectus, the prospectus and the
closing date of the offering signed by the auditors
of the Company and providing comfort in relation to
financial information contained in the prospectus;
(iii) if the prospectus is filed in Quebec, opinions of
Quebec counsel to the Company and the auditors of the
Company addressed to such Holder and relating to the
translation of the preliminary prospectus and the
prospectus, such opinions being dated the dates of
the preliminary prospectus, prospectus and closing;
and
(iv) such corporate certificates as are customarily
furnished in securities offerings, and, in each case,
covering substantially the same matters as are
customarily covered in such documents in the relevant
jurisdictions and such other matters as such Holder
may reasonably request;
(e) immediately notify the Holders of the happening of any event
during the period in Section 3.1(b) as a result of which the
preliminary prospectus or the prospectus, as then in effect,
would include an untrue statement of material fact or would
omit any fact that is required to be stated or that is
necessary to make any statement therein not misleading in
light of the circumstances in which it was made (other than
facts or statements provided by the Holders or any
underwriters);
(f) otherwise use its best efforts to comply with all applicable
published instruments, policies, rules and regulations of the
applicable Commissions and any stock
Page 66 of 75 Pages
exchange, automated quotation system, and over the counter
market on which the Designated Registrable Securities are then
listed or quoted;
(g) cause all such Designated Registrable Securities to be listed
on each securities exchange, automated quotation system, or
over the counter market on which similar securities issued by
the Company are then listed;
(h) provide a transfer agent and registrar for such Designated
Registrable Securities no later than the closing date of the
offering;
(i) enter into an underwriting agreement with the underwriters for
the offering, such agreement to contain such representations
and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting
agreements with respect to secondary distributions and
indemnification agreements consistent with Section 4.2 and
such other documents on such terms and conditions as are
customary in secondary offerings and take all such other
actions as permitted by law as the Holders or the
underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of the Designated Registrable
Securities by the Holders; and
(j) in the event of the issuance of any order or ruling suspending
the effectiveness of a prospectus receipt or of any order
suspending or preventing the use of any prospectus or
suspending the qualification of any of the Designated
Registrable Securities qualified by such prospectus for sale
in any applicable Canadian provinces, the Company will notify
the Holders of such event and use its best efforts promptly to
obtain the withdrawal of such order or ruling.
The Holders will not (until further notice) effect sales of Designated
Registrable Securities or deliver any prospectus in respect of such
sale after notification by the Company of any order or ruling
suspending the effectiveness of the prospectus or after notification by
the Company under paragraph (e) hereof.
3.2 Other Sales.
-----------
After receipt by the Company of a Demand Registration, the Company will not
without the prior written consent of the Holders, which will not be unreasonably
withheld, authorize, issue or sell Common Shares or securities convertible or
exchangeable into or exercisable for such securities in any jurisdiction or
agree to do so or publicly announce any intention to do so (except for
securities issued pursuant to any legal obligation in effect prior to the
delivery of the Demand Registration) until a period of at least 90 days has
elapsed from the date receipts are issued under all Securities Acts applicable
to the prospectus or 7.5 months after the date of the request for a Demand
Registration, whichever shall first occur.
3.3 Obligations of Holder.
---------------------
3.3.1 In connection with any Demand Registration, each Holder shall:
Page 67 of 75 Pages
(a) provide such information with respect to itself and the number
of securities of the Company held by the Holder as may be
reasonably required by the Company to comply with the
applicable Securities Acts in each jurisdiction in which the
Demand Registration is to be effected;
(b) if required under applicable Securities Acts, execute any
certificate forming part of a preliminary prospectus,
prospectus or similar document to be filed with the applicable
Commissions;
(c) immediately notify the Company of the happening of any event
during the period in Section 3.1(b), as a result of which the
preliminary prospectus or the prospectus, as in effect, would
include an untrue statement of material fact or would omit any
fact that is required to be stated or is necessary to make any
statement therein not misleading in light of the circumstances
in which it was made insofar as such facts or statements
relate to or were provided by the Holder; and
(d) otherwise use its best efforts not to breach all applicable
published instruments, policies, rules and regulations of the
applicable Commissions and any stock exchange, automated
quotation system, and over-the-counter market on which the
Designated Registrable Securities are then listed or quoted.
3.3.2 Each Holder agrees and acknowledges that, for so long as Greywolf is
its manager and/or advisor, all such actions required to be taken by the Holder
pursuant to this Agreement shall be taken by Greywolf on its behalf.
ARTICLE IV
DUE DILIGENCE, INDEMNIFICATION
------------------------------
4.1 Preparation; Reasonable Investigation.
-------------------------------------
In connection with the preparation and filing of any preliminary prospectus or
prospectus as herein contemplated, the Company will give the Holders and its
underwriters, if any, and their respective counsel, auditors and other
representatives, the opportunity to participate in the preparation of such
documents and each amendment thereof or supplement thereto, and shall insert
therein such material, furnished to the Company in writing, which in the
reasonable judgment of the Holders and their counsel should be included, and
will give each of them such reasonable and customary access to the Company's
books and records and such reasonable and customary opportunities to discuss the
business of the Company with its officers and auditors as shall be necessary in
the opinion of any such Holder, such underwriters and their respective counsel,
and to conduct all reasonable and customary due diligence which any such Holder,
such underwriters and their respective counsel may reasonably require in order
to conduct a reasonable investigation for purposes of establishing a due
diligence defence as contemplated by the Securities Acts and in order to enable
such underwriters to execute the certificate required to be executed by them in
Canada for inclusion in each such document.
Page 68 of 75 Pages
4.2 Indemnification.
---------------
(a) By Company. The Company agrees to indemnify, to the extent
permitted by law, each Holder and each Person, if any, who
participates as an underwriter in the offering or sale of the
Designated Registrable Securities, their respective officers
and directors and each Person who controls such Holder or
underwriter (within the meaning of any applicable Securities
Act) against all losses (excluding loss of profits), claims,
damages, liabilities and expenses arising out of or based upon
(i) any information or statement contained in the preliminary
prospectus, the prospectus or any amendment thereto which at
the time and in light of the circumstances under which it was
made contains a misrepresentation (as defined in the
applicable Securities Act); (ii) any omission to state in the
preliminary prospectus or the prospectus any fact that was
required to be stated in such document or necessary to make
any statement in such document not misleading in light of the
circumstances under which it was made; (iii) any order made or
inquiry, investigation or proceedings commenced or threatened
by any applicable Commission, court or other competent
authority based upon any untrue statement or omission or any
misrepresentation in the preliminary prospectus, the
prospectus or any amendment thereto or based upon any failure
to comply with applicable securities laws (other than any
failure by the Holder or the underwriters) preventing or
restricting the trading in or the sale and distribution of the
Designated Registrable Securities pursuant to a Demand
Registration; and (iv) non-compliance by the Company with any
of the Securities Acts in connection with a Demand
Registration and the distribution effected thereunder, except
insofar as (v) any information or statement referred to in
clause (i), (ii) or (iii) of this Section 4.2(a) has been
furnished in writing to the Company by the Holder pursuant to
Section 4.2(b) or the underwriters expressly for use therein
or (vi) caused by such Holder's or any underwriter's failure
to deliver to a purchaser of Designated Registrable Securities
a copy of the prospectus or any amendments or supplements
thereto after the Company has furnished such Holder with a
sufficient number of copies of the same.
(b) By Holders. In connection with any Registration of Designated
Registrable Securities, the Holders will indemnify the
Company, its directors and officers and each Person who
controls the Company (within the meaning of any Securities
Act) against any losses (excluding loss of profits), claims,
damages, liabilities and expenses arising out of or based upon
(i) any untrue statement of material fact contained in the
prospectus or any amendment thereof or supplement thereto or
any omission of a material fact required to be stated therein
or necessary to make any statement therein not misleading, but
only to the extent that such untrue statement, or omission is
contained in any information so furnished in writing by such
Holders, pursuant to this Section 4.2(b), or (ii) any default
by the Holders in respect of its obligations under Section 3.3
hereof.
(c) Procedure. 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
Page 69 of 75 Pages
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 satisfactory to the indemnified party,
acting reasonably. 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. No indemnifying party, without the
express written consent of an indemnified party, may settle
any claims.
(d) Survival: The indemnification provided for under this
Agreement will survive the expiry of this Agreement and 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 any transfer of securities
pursuant thereto.
(e) Contribution. If the indemnity and reimbursement obligation
provided for in any paragraph of this Section is unavailable
or insufficient to hold harmless an indemnified party in
respect of any losses (or actions or proceedings in respect
thereof) referred to therein, then the indemnifying party
shall contribute to the amount paid or payable by the
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 the indemnifying
party on the one hand and the indemnified party or the other
hand in connection with the statements or omissions which
resulted in such losses, as well as any other relevant
equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such untrue statement or omission. The parties hereto agree
that it would not be just and equitable if contributions
pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in
the first sentence of this paragraph. The amount paid by an
indemnified party as a result of the losses referred to in the
first sentence of this paragraph shall be deemed to include
any legal and other expenses reasonable incurred by such
indemnified party in connection with investigating or
defending any loss which is the subject of this paragraph.
No indemnified party guilty of fraudulent misrepresentation
shall be entitled to contribution from the indemnifying party
if the indemnifying party was not guilty of such fraudulent
misrepresentation. No contribution shall be made by an
Page 70 of 75 Pages
indemnifying party under circumstances where such party would
not have been liable for indemnification under Section 4.2.
Moreover, contribution by a Holder of Designated Registrable
Securities shall be limited in amount to the net amount of
proceeds received by such Holder from the sale of such
Designated Registrable Securities pursuant to such prospectus.
The provisions of this Section 4.2(e) shall remain in full
force and effect, regardless of the investigation made by or
on behalf of the beneficiaries of this Section 4.2(e) and
shall survive the transfer of Designated Registrable
Securities by the Holders pursuant to Section 5.4 of this
Agreement.
ARTICLE V
GENERAL
-------
5.1 Other Agreements.
----------------
The Company represents and warrants to each Holder that it has not, and
covenants with each Holder that it will not, enter into any agreement with
respect to its securities that is inconsistent with or violates the rights
granted to the Holders pursuant to this Agreement. Other than this Agreement, a
Canadian registration rights agreement dated the date hereof entered into with
certain accounts managed or advised by DDJ Capital Management LLC and those
certain United States Registration Rights Agreement dated August 22, 2005 and as
of the date hereof, respectively (collectively, the "Other Registration Rights
Agreements"), the Company represents and warrants to the Holder that there is
not in effect on the date hereof any agreement by the Company pursuant to which
any holders of securities of the Company have a right to cause the Company to
register or qualify such securities under the Securities Acts or any securities
or blue sky laws of any jurisdiction. The Company agrees that, for so long as
any Holder is entitled to registration rights under this Agreement, the Company
shall not enter into any agreement, other than the Other Registration Rights
Agreements, granting registration rights with respect to the Company's capital
stock that conflict with or impair, or have any priority over, the registration
rights granted hereby.
5.2 Remedies.
--------
Any Person having rights under any provision of this Agreement will be entitled
to enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. 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 may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
5.3 Amendments.
----------
Except as otherwise provided herein, the provisions of this Agreement may only
be amended with the prior written consent of the Company and the Holders.
Page 71 of 75 Pages
5.4 Assignment.
----------
This Agreement and the rights and obligations of the parties hereto shall bind
and enure to the benefit of each of the parties hereto. Each Holder shall have
the right to transfer or assign any of its rights or obligations under this
Agreement in connection with the transfer of all of its Common Shares to a third
party.
5.5 Counterparts.
------------
This Agreement may be executed simultaneously in two or more counterparts, any
one of which need not contain the signature of more than one party, but all such
counterparts taken together will constitute one and the same Agreement.
5.6 Severability.
------------
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, portions of such provisions or such provisions in their
entirety, to the extent necessary, shall be severed from this Agreement, and the
balance of this Agreement shall be enforceable in accordance with its terms.
5.7 Delays or Omissions.
-------------------
No delay or omission to exercise any rights, power or remedy accruing to any
party to this Agreement, upon the breach or default of the other party shall
impair any such rights, power or remedy of such non-breaching party nor shall it
be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of the party
of any provisions or conditions of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to the
parties, shall be cumulative and not alternative.
5.8 Descriptive Headings.
--------------------
The descriptive headings of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
5.9 Governing Law.
-------------
All question concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto will be governed by the internal
law, and not the law of conflicts, of the Province of Ontario.
Page 72 of 75 Pages
5.10 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 delivered personally or by facsimile transmission
or mailed (registered or certified mail, postage prepaid). Such notices, demands
and other communications will be delivered to the parties at the respective
addresses or facsimile numbers indicated below:
(a) if to the Company: SR Telecom Inc.
8150 TransCanada Highway
Montreal, Quebec
H4S 1M5
Attention: Chief Financial Officer
Facsimile: 514-956-4405
(b) if to the Holders, to: Greywolf Capital Management LP
4 Manhattanville Road, Suite
201 Purchase, NY 10577
Attention: General Counsel
Facsimile: (914) 251-8244
5.11 Termination.
-----------
This Agreement shall terminate on the date on which the Holders, based on their
aggregate holdings (including any Common Shares issuable on conversion of the
Convertible Notes on the basis that only the Holders and no other holder of
Convertible Notes converts the Convertible Notes) cease to hold less than 20% of
the issued and outstanding Common Shares (including Common Shares issuable on
conversion of the Convertible Notes on the basis that only the Holders and no
other holders of Convertible Notes converts the Convertible Notes) and otherwise
cease to be a person described in paragraph (c) of the definition of
"distribution" in the Securities Act (Ontario).
IN WITNESS WHEREOF, the parties hereto have caused the agreement to be duly
executed as of the date first above written.
Page 73 of 75 Pages
SR TELECOM INC.
By: /s/ illegible
--------------------
Name:
Title:
Page 74 of 75 Pages
GREYWOLF CAPITAL MANAGEMENT L.P.,
on behalf of Greywolf Capital Overseas Fund,
Greywolf Capital Partners II LP and Greywolf Loan
Participation LLC
By: /s/ Michelle Lynd
------------------------------
Michelle Lynd
Authorized Signatory
Page 75 of 75 Pages