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EXHIBIT 99.4
AFFILIATE AGREEMENT
__________, 2001
Verso Technologies, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Re: Xxxxxxxx.Xxx Software, Inc.
Gentlemen:
Verso Technologies, Inc., a Minnesota corporation ("Verso"), Titan
Acquiring Sub, Inc., a wholly-owned subsidiary of Verso ("Merger Sub"), and
Xxxxxxxx.Xxx Software, Inc., a Georgia corporation ("Telemate"), have entered
into an Agreement and Plan of Merger dated as of May ___, 2001 (the "Merger
Agreement"), pursuant to which Merger Sub is to be merged with and into Telemate
(the "Merger"), and each outstanding share of common stock of Telemate
("Telemate Stock") is to be converted into the right to receive shares of common
stock of Verso ("Verso Common Stock"). Capitalized terms not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
The undersigned has been advised that as of the date the Merger
Agreement is submitted to shareholders of Telemate for approval, the undersigned
may be an "affiliate" of Telemate, as such term is defined for purposes of
paragraph (c) of Rule 145 promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended (the "Securities Act").
Execution of this Agreement by the undersigned should not be construed as an
admission of "affiliate" status or as a waiver of any rights the undersigned may
have to object to any claim that the undersigned is an "affiliate" on or after
the date of this Agreement.
In connection with the Merger, Verso has requested the undersigned to
agree, and the undersigned hereby agrees, with Verso as follows:
Verso has filed a Joint Proxy Statement/Prospectus with Telemate,
pursuant to which the Verso Common Stock to be received by the undersigned
pursuant to the Merger will be registered.
The undersigned understands and agrees that any sales of Verso Common
Stock will be made pursuant to an effective registration statement or in
compliance with Rule 145, or in a transaction which, in the opinion of legal
counsel satisfactory to Verso, is exempt from the registration requirements of
the Securities Act, and that stop-transfer instructions to this effect will be
given to Verso's transfer agent with respect to the shares of Verso Common Stock
to be
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received by the undersigned in the Merger, and there will be placed on the
certificate representing such stock, or any certificates delivered in
substitution therefor, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THESE SECURITIES MAY ONLY BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR (2) IN ACCORDANCE WITH
RULE 145 OR A TRANSACTION WHICH IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND,
IN EITHER CASE, ALONG WITH AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY TO SUCH EFFECT."
The undersigned further understands and agrees that unless the transfer
by the undersigned of the Verso Common Stock to be received by the undersigned
pursuant to the Merger has been registered under the Securities Act or is a sale
made in conformity with the provisions of Rule 145, Verso reserves the right to
put the following legend on the certificates issued to the undersigned's
transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH
A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in the
immediately preceding two paragraphs shall be removed by delivery of substitute
certificates without such legend if such legend is not required for purposes of
the Securities Act or this Agreement. It is understood and agreed that such
legends and the stop orders referred to above will be removed if (i) evidence or
representations satisfactory to Verso that the securities represented by such
certificates are being or have been sold in a transaction made in conformity
with the provisions of Rule 145(d) (as such rule may be hereafter from time to
time amended) or (ii) Verso has received either an opinion of
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counsel, which opinion and counsel shall be reasonably satisfactory to Verso, or
a "no-action" letter obtained by me from the staff of the SEC, to the effect
that the restrictions imposed by Rule 145 under the Act no longer apply to the
undersigned.
Verso agrees and covenants that for so long as is necessary to permit
the undersigned to sell the Verso Common Stock pursuant to Rule 145 and, to the
extent applicable, Rule 144 under the Securities Act, Verso shall (i) file, on a
timely basis, all reports and data required to be filed with the SEC by it
pursuant to Section 13 or Section 15 of the Exchange Act, and (ii) furnish to
the undersigned upon request a written statement as to whether Verso has
complied with such reporting requirements during the 12 months preceding any
proposed sale of Verso Common Stock by the undersigned under Rule 145 and Rule
144. Verso represents and warrants to the undersigned that it has filed all
reports required to be filed with the SEC under Section 13 or Section 15 of the
Exchange Act during the preceding 12 months. Although this letter references
sales of Verso Common Stock pursuant to an effective registration statement, the
undersigned acknowledges and agrees that Verso has no obligation to file such a
registration statement.
In addition to the limitations imposed above, the undersigned agrees
that it shall not make any sales of Verso Common Stock in violation of the
following limitations:
(a) If the undersigned beneficially owns immediately after the
Effective Time 750,000 or more shares of Verso Common Stock, then the
undersigned shall not (directly or indirectly), without the prior written
consent of Verso, sell, agree to sell or enter into any option agreement
pursuant to which Verso Common Stock may be sold, in excess of the number of
shares of Verso Common Stock that may be sold during the periods below:
--------------------------------------------------------------------------------------------------------
PERCENTAGE OF VERSO COMMON STOCK
PERIOD BENEFICIALLY OWNED THAT MAY BE SOLD DURING
PERIOD
--------------------------------------------------------------------------------------------------------
Period commencing at the Effective Time 0%
and ending on (and including) the 90th day following
the Effective Time
--------------------------------------------------------------------------------------------------------
Period commencing on the 91st day following the
Effective Time and ending on (and including) the 5%
180th day following the Effective Time
--------------------------------------------------------------------------------------------------------
Period commencing on the 181st day following
the Effective Time and ending on (and including) 10%
the 270th day following the Effective Time
--------------------------------------------------------------------------------------------------------
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--------------------------------------------------------------------------------------------------------
Period commencing on the 271st day following
the Effective Time and ending on (and including) 15%
the 360th day following the Effective Time
--------------------------------------------------------------------------------------------------------
From and after the 361st day following the
Effective Time 100%
--------------------------------------------------------------------------------------------------------
(b) If the undersigned beneficially owns immediately after the
Effective Time less than 750,000 shares of Verso Common Stock, then the
undersigned shall not (directly or indirectly), without the prior written
consent of Verso, sell, agree to sell or enter into any option agreement
pursuant to which Verso Common Stock may be sold, in excess of the number of
shares of Verso Common Stock that may be sold during the periods below:
--------------------------------------------------------------------------------------------------------
PERCENTAGE OF VERSO COMMON STOCK
PERIOD BENEFICIALLY OWNED THAT MAY BE SOLD DURING
PERIOD
--------------------------------------------------------------------------------------------------------
Period commencing at the Effective Time and 0%
ending on (and including) the 90th day following
the Effective Time
--------------------------------------------------------------------------------------------------------
Period commencing on the 91st day following the
Effective Time and ending on (and including) the 5%
180th day following the Effective Time
--------------------------------------------------------------------------------------------------------
Period commencing on the 181st day following
the Effective Time and ending on (and including) 15%
the 270th day following the Effective Time
--------------------------------------------------------------------------------------------------------
Period commencing on the 271st day following
the Effective Time and ending on (and including) 25%
the 360th day following the Effective Time
--------------------------------------------------------------------------------------------------------
From and after the 361st day following the
Effective Time 100%
--------------------------------------------------------------------------------------------------------
(c) Notwithstanding the provisions of subparagraphs (a) and (b)
above, the undersigned (together with one or more persons party to an Affiliate
Agreement) may effect one or more Block Sales (which shall mean a sale of at
least 100,000 shares of Verso Common Stock in a single transaction by all such
persons) in any of the four 90-day periods set forth in such subparagraphs,
provided that (i) the undersigned complies with subparagraph (d) below; and (ii)
such Block Sale (together with any other sale of Verso Common Stock made (or to
be made)
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during such 90-day period, including any other Block Sale made during such
period) would not constitute a sale of more than 50% of the number of shares of
Verso Common Stock beneficially owned by the undersigned at the beginning of
such 90-day period; and further provided, however, that any Block Sale made
after the expiration of the one-week period set in subparagraph (d) below other
than in the manner in which Verso has so assisted shall be subject to the
limitations sets forth in subparagraphs (a) and (b) above.
(d) If the undersigned desires to effect a Block Sale, then the
undersigned shall give the Chief Executive Officer of Verso (or such other
officer as he may designate) prompt written notice of the proposed terms of such
sale, including the number of shares of Verso Common Stock proposed to be sold
in such Block Sale (and the number of shares of Verso Common Stock otherwise
sold by the undersigned during such 90-day period), and Verso shall thereupon
use its best efforts to assist for a one-week period the undersigned in
effecting the Block Sale in an orderly manner, and the undersigned shall not be
entitled to consummate such Block Sale prior to the end of such one-week period
without the prior written consent of Verso, which consent shall not be
unreasonably delayed or withheld if such Block Sale is to be made in a manner
that is not reasonably expected to adversely affect the market price of the
Verso Common Stock. In addition, if the undersigned desires to sell at least
50,000 shares of Verso Common Stock (but less than 100,000 shares of Verso
Common Stock) in a single transaction, then the undersigned shall give notice as
provided above, and Verso shall use its best efforts to assist the undersigned
in effecting the sale.
(e) The undersigned further agrees that immediately prior to the
Effective Time (i) all Telemate Stock Options that do not constitute Telemate
In-the-Money Options shall be (and hereby are) terminated, cancelled and
surrendered and shall not be converted into Parent Options and any claims that
the undersigned may have are hereby waived and released forever; and (ii) the
exercise period of Parent Options into which the Telemate In-the-Money-Options
are converted shall be extended to a date that is 18 months following the
Effective Time.
Very truly yours,
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Verso Technologies, Inc.
__________, 2001
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Accepted this _____ day
of __________, 2001 by
VERSO TECHNOLOGIES, INC.
By:
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Its:
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