Exhibit 4.2


 


REGISTRATION RIGHTS
AGREEMENT


 


This
Registration Rights Agreement (the “Agreement”) is made and entered into as of
this 20th day of June, 2003 by and among Click2learn, Inc., a Delaware
corporation (the “Company”), and the “Investors” named in that certain Purchase
Agreement by and among the Company and the Investors (the “Purchase
Agreement”).


 


The parties
hereby agree as follows:


 


1.                                       Certain
Definitions.


 


As used in
this Agreement, the following terms shall have the following meanings:


 


“Affiliate”
means, with respect to any person, any other person which directly or
indirectly controls, is controlled by, or is under common control with, such
person.


 


“Business
Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.


 


“Common
Stock” shall mean the Company’s common stock, par value $0.01 per share,
and any securities into which such shares may hereinafter be reclassified.


 


“Investors”
shall mean the Investors identified in the Purchase Agreement and any Affiliate
or permitted transferee of any Investor who is a subsequent holder of any
Warrants or Registrable Securities.


 


“Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus.


 


“Register,”
“registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the 1933 Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.


 


“Registrable
Securities” shall mean the shares of Common Stock issuable (i) pursuant to
the Purchase Agreement, (ii) upon the exercise of the Warrants, if any, and
(ii) issuable with respect to or in exchange for Registrable Securities;
provided, that, a security shall cease to be a Registrable Security upon (A)
sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or
(B) such security becoming eligible for sale by the Investors pursuant to Rule
144(k).


 


“Registration
Statement” shall mean any registration statement of the Company filed under
the 1933 Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement, amendments and supplements to
such Registration Statement, including post-effective amendments, all exhibits
and all material incorporated by reference in such Registration Statement.


 


“Required
Investors” means the Investors holding a at least two-thirds of the
Registrable Securities.


 

















 


“SEC”
means the U.S. Securities and Exchange Commission.


 


“Shares”
means shares of the Company’s Common Stock issued pursuant to the Purchase
Agreement.


 


“1933 Act”
means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


 


“1934 Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


 


“Warrants”
means, warrants to purchase shares of Common Stock issued pursuant to the
Purchase Agreement, the form of which is attached to the Purchase Agreement as
Exhibit B.


 


“Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the
Warrants.


 


2.                                       Registration.


 


(a)                                  Registration
Statements.


 


(i)                                     Promptly
following the closing of the purchase and sale of the securities contemplated
by the Purchase Agreement (the “Closing Date”) but no later than thirty (30)
days after the Closing Date (the “Filing Deadline”), the Company shall prepare
and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3
is not then available to the Company, on such form of registration statement as
is then available to effect a registration for resale of the Registrable
Securities, subject to the Required Investors’ consent), covering the resale of
the Registrable Securities in an amount at least equal to the sum of the number
of Shares plus the number of shares of Common Stock necessary to permit the
exercise in full of the Warrants issued on the Closing Date.  Such Registration Statement also shall
cover, to the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional shares
of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities.  The Company shall use its reasonable efforts
to obtain from each person who now has piggyback registration rights a waiver
of those rights with respect to the Registration Statement.  The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to the
Investors and their counsel prior to its filing or other submission.  If a Registration Statement covering the
Registrable Securities is not filed with the SEC on or prior to the Filing
Deadline, the Company will make pro rata payments to each Investor, as
liquidated damages and not as a penalty, in an amount equal to 1.5% of the
aggregate amount invested by such Investor for each 30-day period or pro rata
for any portion thereof following the date by which such Registration Statement
should have been filed for which no Registration Statement is filed with
respect to the Registrable Securities. Such payments shall be in partial
compensation to the Investors, and shall not constitute the Investors’
exclusive remedy for such events.  Such
payments shall be made to each Investor in cash.


 


(b)                                 Expenses.  The Company will pay all expenses associated
with each registration, including but not limited to, filing and printing fees,
counsel to the Company,


 


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counsel to the Investors (not
to exceed $10,000), and accounting fees and expenses, costs associated with
clearing the Registrable Securities for sale under applicable state securities
laws and listing fees, but excluding the fees and disbursements of counsel to
the Investors in excess  $10,000 and
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals with respect to the Registrable
Securities being sold by the Investors.


 


(c)                                  Effectiveness.


 


(i)                                     The
Company shall use reasonable efforts to have the Registration Statement
declared effective as soon as practicable. 
The Company shall notify the Investors by facsimile or e-mail as
promptly as practicable, and in any event, within twenty-four (24) hours, after
any Registration Statement is declared effective and shall simultaneously
provide the Investors with copies of any related Prospectus to be used in
connection with the sale or other disposition of the securities covered
thereby.  If (A) a Registration
Statement covering the Registrable Securities is not declared effective by the
SEC within ninety (90) days after the Closing Date (or 120 days in the event of
SEC review of the Registration Statement) or (B) after a Registration Statement
has been declared effective by the SEC, sales cannot be made pursuant to such Registration
Statement for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update the Registration Statement), but
excluding the inability of any Investor to sell the Registrable Securities
covered thereby due to market conditions and except as excused pursuant to
subparagraph (ii) below, then the Company will make pro rata payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to
1.5% of the aggregate amount invested by such Investor for each 30-day period
or pro rata for any portion thereof following the date by which such
Registration Statement should have been effective (the “Blackout Period”).  Such payments shall be in partial compensation
to the Investors, and shall not constitute the Investors’ exclusive remedy for
such events.  The amounts payable as
liquidated damages pursuant to this paragraph shall be paid monthly within
three (3) Business Days of the last day of each month following the
commencement of the Blackout Period until the termination of the Blackout
Period.  Such payments shall be made to
each Investor in cash.


 


(ii)                                  For
not more than thirty (30) consecutive days or for a total of not more than
sixty (60) days in any twelve (12) month period, the Company may delay the
disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of
the Company (an “Allowed Delay”); provided, that the Company shall promptly (a)
notify the Investors in writing of the existence of (but in no event, without
the prior written consent of an Investor, shall the Company disclose to such
Investor any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, and (b) advise the Investors in
writing to cease all sales under the Registration Statement until the end of
the Allowed Delay.


 


(d)                                 Underwritten
Offering.  If any offering pursuant
to a Registration Statement pursuant to Section 2(a) hereof involves an
underwritten offering, the Company shall


 


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have the right to select an
investment banker and manager to administer the offering, which investment
banker or manager shall be reasonably satisfactory to the Required Investors.


 


3.                                       Company
Obligations.  The Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the
Company will, as expeditiously as possible:


 


(a)                                  use
commercially reasonable efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earlier of (i) the date on which all Registrable Securities covered by
such Registration Statement as amended from time to time, have been sold, and
(ii) with respect to each Investor, the date on which all Registrable
Securities covered by such Registration Statement may be sold pursuant to Rule
144(k);


 


(b)                                 prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the period specified in Section 3(a) and
to comply with the provisions of the 1933 Act and the 1934 Act with respect to
the distribution of all of the Registrable Securities covered thereby;


 


(c)                                  provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
five (5) Business Days prior to their filing with the SEC and not file any document
to which such counsel reasonably objects. 
An objection shall be deemed to be reasonable only if the Investor
reasonably believes such Registration Statement, amendments or supplements
contains (X) an untrue statement of material fact or omit to state any material
fact necessary to make the statements therein not misleading or fails to comply
with the applicable requirements of the 1933 Act or the rules promulgated
thereunder or (Y) contains an untrue statement of fact regarding such Investor
or omit to state any fact necessary to make the statement regarding such
Investor therein not misleading, and the Investor provides written notice of
such statement necessary to make the statements therein not misleading or
non-compliant;


 


(d)                                 furnish
to the Investors and their legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than two (2) Business Days after the filing date,
receipt date or sending date, as the case may be, one (1) copy of any
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and (ii) such number
of copies of a Prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as each Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor that are covered by the related Registration
Statement;


 


(e)                                  in
the event the Company selects an underwriter for the offering, the Company
shall enter into and perform its reasonable obligations under an underwriting
agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the underwriter of
such offering;


 


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(f)                                    if
required by the underwriter,  the
Company shall furnish, on the effective date of the Registration Statement
(except with respect to clause (i) below) and on the date that Registrable
Securities are delivered to an underwriter, if any, for sale in connection with
the Registration Statement, (i) in the case of an underwritten offering, an
opinion, dated as of the closing date of the sale of Registrable Securities to
the underwriters, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the underwriters
participating in such underwritten offering, and (ii) a letter, dated as of the
effective date of such Registration Statement and confirmed as of the
applicable dates described above, from the Company’s independent certified
public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters;


 


(g)                                 use
commercially reasonable efforts to (i) prevent the issuance of any stop order
or other suspension of effectiveness and, (ii) if such order is issued, obtain
the withdrawal of any such order at the earliest possible moment;


 


(h)                                 prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors and their
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(h), (ii)
subject itself to general taxation in any jurisdiction where it would not otherwise
be so subject but for this Section 3(h), or (iii) file a general consent to
service of process in any such jurisdiction;


 


(i)                                     use
commercially reasonable efforts to cause all Registrable Securities covered by
a Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;


 


(j)                                     immediately
notify the Investors, at any time during the period referred to in Section
3(a), upon discovery that, or upon the happening of any event as a result of
which, the Prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, 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
Registrable Securities, such Prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing;


 


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(k)                                  otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the 1933 Act and the 1934 Act, take such other
actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities hereunder; and make available to its security holders,
as soon as reasonably practicable, but not later than the Availability Date (as
defined below), an earnings statement covering a period of at least twelve (12)
months, beginning after the effective date of each Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
1933 Act, including Rule 158 promulgated thereunder (for the purpose of this
subsection 3(k), “Availability Date” means the 45th day following the end of
the fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of
the Company’s fiscal year, “Availability Date” means the 90th day after the end
of such fourth fiscal quarter); any earnings statement conforming to the
requirements of this Section 3(k) and publicly available on the Company’s
website for a period of at least twelve (12) months or publicly available on
EDGAR shall be deemed available for the purposes of this Section 3(k); and


 


(l)                                     with
a view to making available to the Investors the benefits of Rule 144 (or its
successor rule) and any other rule or regulation of the SEC that may at any
time permit the Investors to sell shares of Common Stock to the public without
registration, the Company covenants and agrees to:  (i) make and keep public information available, as those terms
are understood and defined in Rule 144, until the earlier of (A) six months
after such date as all of the Registrable Securities may be resold pursuant to
Rule 144(k) or any other rule of similar effect or (B) such date as all of the
Registrable Securities shall have been resold; and (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
1934 Act; and (iii) furnish to each Investor upon request, as long as such
Investor owns any Registrable Securities, (A) a written statement by the
Company that it has complied with the reporting requirements of the 1934 Act,
(B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, and (C) such other information as may be reasonably
requested in order to avail such Investor of any rule or regulation of the SEC
that permits the selling of any such Registrable Securities without
registration.


 


4.                                       Obligations
of the Investors.


 


(a)                                  Each
Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.  At least five (5)
Business Days prior to the first anticipated filing date of any Registration
Statement, the Company shall notify each Investor of the information the
Company requires from such Investor if such Investor elects to have any of the
Registrable Securities included in the Registration Statement.  An Investor shall provide such information
to the Company at least two (2) Business Days prior to the first anticipated
filing date of such Registration Statement if such Investor elects to have any
of the Registrable Securities included in the Registration Statement.  Any Investor who fails to provide such
information to the Company within the timeframes described in this Section 4(a)
shall waive any rights, damages or penalties such Investors has pursuant to
Section 2 of this Agreement.


 


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(b)                                 Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement.


 


(c)                                  In
the event the Company, at the request of the Investors, determines to engage
the services of an underwriter, such Investor agrees to enter into and perform its
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
dispositions of the Registrable Securities.


 


(d)                                 Each
Investor agrees that, upon receipt of any notice from the Company of either (i)
the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(j) hereof, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the
Investor’s receipt of the copies of the supplemented or amended prospectus
filed with the SEC and declared effective and, if so directed by the Company,
the Investor shall deliver to the Company (at the expense of the Company) or
destroy (and deliver to the Company a certificate of destruction) all copies in
the Investor’s possession of the Prospectus covering the Registrable Securities
current at the time of receipt of such notice.


 


(e)                                  No
Investor may participate in any third party underwritten registration hereunder
unless it (i) agrees to sell the Registrable Securities on the basis provided
in any underwriting arrangements in usual and customary form entered into by
the Company, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements, and (iii) agrees to
pay its pro rata share of all underwriting discounts and commissions.  Notwithstanding the foregoing, no Investor
shall be required to make any representations to such underwriter, other than
those with respect to itself and the Registrable Securities owned by it,
including its right to sell the Registrable Securities, and any indemnification
in favor of the underwriter by the Investors shall be several and not joint and
limited in the case of any Investor, to the proceeds received by such Investor
from the sale of its Registrable Securities. 
The scope of any such indemnification in favor of an underwriter shall
be limited to the same extent as the indemnity provided in Section 5(b) hereof.


 


5.                                       Indemnification.


 


(a)                                  Indemnification
by the Company.  The Company will
indemnify and hold harmless each Investor and its officers, directors, members,
employees and agents, successors and assigns, and each other person, if any,
who controls such Investor within the meaning of the 1933 Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any


 


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preliminary prospectus or final
prospectus contained in, or any amendment or supplement thereof; (ii) any blue
sky application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a “Blue
Sky Application”); (iii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (iv)
any violation by the Company or its agents of any rule or regulation
promulgated under the 1933 Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration; or (v) any failure to register or qualify the Registrable
Securities included in any such Registration in any state where the Company or
its agents has affirmatively undertaken or agreed in writing that the Company
will undertake such registration or qualification on an Investor’s behalf (the
undertaking of any underwriter chosen by the Company being attributed to the
Company) and will reimburse such Investor, and each such officer, director or
member and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability (x) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Investor or any such
controlling person in writing specifically for use in such Registration
Statement or Prospectus, (y) arises out of the failure of the Investor to
comply with the prospectus delivery requirements of the 1933 Act, provided that
the Company had met its obligations hereunder to furnish the Investor with
copies of the applicable prospectus, or (z) arises out of or is based upon
sales by the Investor pursuant to the registration statement during an Allowed
Delay, provided that the Company had complied in all respects with the
provisions of Section 2(c)(ii) hereof.


 


(b)                                 Indemnification
by the Investors.  In connection
with any registration pursuant to the terms of this Agreement, each Investor
will furnish to the Company in writing such information as the Company
reasonably requests concerning the holders of Registrable Securities or the
proposed manner of distribution for use in connection with any Registration
Statement or Prospectus and agrees, severally but not jointly, to indemnify and
hold harmless, to the fullest extent permitted by law, the Company, its
directors, officers, employees, stockholders and each person who controls the
Company (within the meaning of the 1933 Act) against any losses, claims,
damages, liabilities and expense (including reasonable attorney fees) resulting
from any untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement or Prospectus or preliminary
prospectus or amendment or supplement thereto or necessary to make the
statements therein not misleading, to the extent, but only to the extent that
such untrue statement or omission is contained in any information furnished in
writing by such Investor to the Company specifically for inclusion in such
Registration Statement or Prospectus or amendment or supplement thereto.  In no event shall the liability of an
Investor be greater in amount than the dollar amount of the proceeds (net of
all expense paid by such Investor in connection with any claim relating to this
Section 5 and the amount of any damages such holder has otherwise been required
to pay by reason of such untrue statement or omission) received by such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.


 


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(c)                                  Conduct
of Indemnification Proceedings.  Any
person entitled to indemnification hereunder shall (i) give prompt notice to
the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party; provided
that any person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but
the fees and expenses of such counsel shall be at the expense of such person
unless (a) the indemnifying party has agreed to pay such fees or expenses, or
(b) the indemnifying party shall have failed to assume the defense of such
claim and employ counsel reasonably satisfactory to such person or (c) in the
reasonable judgment of any such person, based upon written advice of its
counsel, a conflict of interest exists between such person and the indemnifying
party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such claim on behalf of such person); and provided,
further, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation.  It is understood
that the indemnifying party shall not, in connection with any proceeding in the
same jurisdiction, be liable for fees or expenses of more than one separate
firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.


 


(d)                                 Contribution.  If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
No person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the 1933 Act shall be entitled to contribution from any person
not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 5 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.


 


6.                                       Miscellaneous.


 


(a)                                  Amendments
and Waivers.  This Agreement may be
amended only by a writing signed by the Company and the Required
Investors.  The Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the


 


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Company shall have obtained the
written consent to such amendment, action or omission to act, of the Required
Investors.


 


(b)                                 Notices.  All notices and other communications
provided for or permitted hereunder, other than notices set forth in Section
2(c)(i), shall be made as set forth in Section 9.4 of the Purchase Agreement.


 


(c)                                  Nondisclosure.  The Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and
provides the Investors, such advisors and representatives with the opportunity
to accept or refuse to accept such material nonpublic information for review
and any Investor wishing to obtain such information enters into an appropriate
confidentiality and standstill agreement with the Company with respect thereto.


 


(d)                                 Assignments
and Transfers by Investors.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the Investors and their respective successors and assigns.  An Investor may transfer or assign, in whole
or from time to time in part, to one or more persons its rights hereunder in
connection with the transfer of Registrable Securities by such Investor to such
person, provided that such Investor complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly after such
assignment is effected.


 


(e)                                  Assignments
and Transfers by the Company.  This
Agreement may not be assigned by the Company (whether by operation of law or
otherwise) without the prior written consent of the Required Investors,
provided, however, that the Company may assign its rights and delegate its
duties hereunder to any surviving or successor corporation in connection with a
merger or consolidation of the Company with another corporation, or a sale,
transfer or other disposition of all or substantially all of the Company’s
assets to another corporation, without the prior written consent of the
Required Investors, after notice duly given by the Company to each Investor.


 


(f)                                    Benefits
of the Agreement.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.


 


(g)                                 Counterparts;
Faxes.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  This Agreement may also be
executed via facsimile, which shall be deemed an original.


 


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(h)                                 Titles
and Subtitles.  The titles and
subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.


 


(i)                                     Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provisions hereof prohibited or unenforceable in any respect.


 


(j)                                     Further
Assurances.  The parties shall
execute and deliver all such further instruments and documents and take all
such other actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements herein
contained.


 


(k)                                  Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.


 


(l)                                     Governing
Law; Consent to Jurisdiction.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof.  Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York located in New York County and the United States District Court for
the Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby.  Service of process
in connection with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are specified for the
giving of notices under this Agreement. 
Each of the parties hereto irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of venue
in such court.  Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.


 


(m) — Independent Nature of Investors’ Obligations and Rights.
The obligations of each Investor hereunder is several and not joint with the
obligations of any other Investor hereunder, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor hereunder.  Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this


 


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Agreement.  Each Investor shall be entitled to protect
and enforce its rights, including without limitation the rights arising out of
this Agreement, and it shall not be necessary for any other Investor to be
joined as an additional party in any proceeding for such purpose.


 


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IN WITNESS WHEREOF,
the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written.


 


 


	
  The Company:

  	
  CLICK2LEARN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin Oakes

  	
   

  
	
   

  	
  Name:  Kevin Oakes

  
	
   

  	
  Title:  CEO

  



 


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  The
  Investors:  [See Exhibit A to Purchase
  Agreement for list of Investors.]

  
	
   

  	
   

  
	
   

  	
   

  
	
  If an individual:

  	
  If an entity:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  Name of Entity

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	 

	
  Print Name

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  	 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  
								



 


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