REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of January 1,
2000 (this "Agreement"), by and among Ulticom, Inc., a New Jersey corporation
(the "Company"), Comverse Technology, Inc., a New York corporation ("Comverse"),
and any other Person that may be designated by Comverse from time to time and
that agrees to become a party to this Agreement in accordance with the
provisions hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Comverse is the holder of a majority of the
outstanding shares of common stock, no par value, of the Company ("Common
Stock"); and
WHEREAS, Comverse has granted, and from time to time after
the date hereof may continue to grant, to a number of directors, officers and
employees of Comverse or of any subsidiary thereof options to purchase from
Comverse shares of Common Stock held by Comverse ("Options"); and
WHEREAS, a number of directors and officers of Comverse
have purchased shares of Common Stock from Comverse by exercising Options
granted to them by Comverse; and
WHEREAS, the parties hereto desire to enter into this
Agreement which sets forth the registration rights, and certain other related
covenants, applicable to the shares of Common Stock that are (i) held from time
to time by Comverse and/or any of its subsidiaries or (ii) acquired from time to
time by directors, officers or employees of Comverse or of any subsidiary
thereof upon the exercise of Options.
NOW, THEREFORE, in consideration of the premises and the
mutual obligations, covenants and agreements herein contained, the parties
hereto agree as follows:
Article I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any given Person,
any other Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person, and when used with respect to any individual shall also include the
Relatives of such individual. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
$_y205.DOC
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close.
"Commission" means the Securities and Exchange Commission
or any other similar or successor agency of the United States government
administering the Securities Act.
"Common Stock" means the common stock, no par value, of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934,
and any similar or successor federal statute, and the rules and regulations of
the Commission thereunder, as in effect at the time.
"NASD" shall mean the National Association of Securities
Dealers, Inc. or any successor corporation thereto.
"Option Holder" means any current or former director,
officer or employee of Comverse or of any subsidiary thereof that holds one or
more Options or any Registrable Securities acquired upon the exercise of one or
more Options.
"Options" has the meaning set forth in the recitals hereto.
"Person" means a corporation, an association, a trust, a
partnership, a limited liability company, a joint venture, an organization, a
business, an individual, a government or political subdivision thereof, or a
governmental body.
"Prospectus" means the prospectus included in any
Registration Statement, together with and including any amendment or supplement
to such prospectus, covering the public offering of any portion of the
Registrable Securities covered by a Registration Statement, and all material
incorporated by reference in such Prospectus.
"Registering Shareholder" means any Shareholder whose
Registrable Securities are included in a Registration Statement filed pursuant
to this Agreement.
"Registrable Securities" means: (i) the shares of Common
Stock held by Comverse or any subsidiary thereof on the date hereof or that may
be acquired by Comverse or any subsidiary thereof from time to time after the
date hereof; (ii) the shares of Common Stock acquired before or after the date
hereof upon the exercise of Options and held by any Shareholder; and (iii) any
shares or other securities into which or for which the shares of Common Stock
referred to in clauses (i) and (ii) above may be changed, converted or exchanged
after the date hereof and any other shares or securities issued after the date
hereof in respect of such shares (or such shares or other securities into which
or for which such shares are so changed, converted or exchanged), in each case
2
upon any reclassification, stock combination, stock subdivision, stock dividend,
share exchange, merger, consolidation or similar transaction; provided, however,
that a security will cease to be a Registrable Security when it (i) has been
effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it or (ii) is sold pursuant to Rule 144
(or any similar rule then in force) under the Securities Act.
"Registration Statement" means a registration statement
filed or to be filed by the Company with the Commission covering Registrable
Securities.
"Relatives" means, with respect to any individual, the
spouse, parents, siblings and descendants of such individual and their
respective issue (whether by blood or adoption and including stepchildren) and
the spouses of such persons.
"Securities Act" means the Securities Act of 1933, as
amended, or any similar federal statute, together with the rules and regulations
of the Commission promulgated thereunder, as in effect at the time.
"Shareholder" means (i) Comverse, any subsidiary thereof or
successor thereto that holds Registrable Securities, (ii) any Option Holder that
agrees to become a party to this Agreement in accordance with the provisions
hereof or (iii) an Affiliate of any Option Holder that agrees to become a party
to this Agreement in accordance with the provisions hereof.
Article II
REGISTRATION RIGHTS
2.1 Demand Registration.
(a) Request for Registration. Subject to the provisions
hereof, at any time and from time to time Comverse may make a written request (a
"Demand") that the Company prepare and file with the Commission a Registration
Statement on Form S-1 or, if the Company is then eligible to do so, that the
Company prepare and file with the Commission a Registration Statement on Form
S-3, so as to permit a public offering and sale of Registrable Securities held
by any Shareholder. Any Demand shall specify the number of Registrable
Securities proposed to be registered and the intended method of disposition
thereof. A registration effected pursuant to this Section 2.1 is hereinafter
referred to as a "Demand Registration."
(b) Limitation on Demand Rights. Notwithstanding anything
to the contrary set forth in Section 2.1(a) hereof: (i) no Demand may be made
less than (A) one hundred and eighty (180) days following the effective date of
the Registration Statement on Form S-1 filed by the Company in connection with
an initial public offering of the Common Stock; or (B) ninety (90) days
following the effective date of any Registration Statement filed by the Company
pursuant to Sections 2.1 or 2.4 hereof; and (ii) Comverse shall not be entitled
3
to make more than one Demand that the Company prepare and file with the
Commission a Registration Statement on Form S-1.
(c) Right to Delay Demand Registration. If, at any time
when a Demand is received by the Company, (i) the Company has undertaken to
prepare a registration statement which is intended to be filed within ninety
(90) days from the date the Demand was received, or (ii) the Company's Board of
Directors determines, in good faith, that filing a Registration Statement in
response to such Demand either (A) would require the Company to make a public
disclosure of information which would have a material adverse effect upon the
Company or would be seriously detrimental to the Company or its shareholders or
(B) could interfere with, or would require the Company to accelerate public
disclosure of, any material financing, acquisition, disposition, corporate
reorganization or other material transaction involving the Company or its
subsidiaries, then the Company may, at its option, cause the registration
requested pursuant to the Demand to be delayed for a period not in excess of
ninety (90) days from the effective date of the registration statement which the
Company is preparing or from the date such Demand was received (such right to
delay a request pursuant to clause (ii) of this Section 2.1(c) may be exercised
by the Company not more than twice in any calendar year). If there is a
postponement under this Section 2.1(c), Comverse may withdraw such Demand by
giving notice in writing to the Company. In such case, no Demand will have been
delivered for the purposes of this Section 2.1.
(d) Company Participation. The Company may elect to
register in any Registration Statement prepared pursuant to a Demand made under
this Section 2.1 any additional shares of Common Stock (including, without
limitation, any shares of Common Stock to be distributed in a primary offering
made by the Company). Such election, if made, shall be made by the Company
giving written notice to Comverse stating (i) that the Company proposes to
include additional shares of Common Stock in such Registration Statement and
(ii) the number of shares of Common Stock proposed to be so included.
(e) Withdrawal Right. Comverse shall have the right to
withdraw any Demand by giving written notice to the Company of its request to
withdraw; provided, however, that (i) such withdrawal request must be made in
writing prior to the earlier of (A) the execution of the underwriting agreement
or the execution of the custody agreement with respect to such Demand
Registration or (B) in the absence of any such agreement, the date on which the
Registration Statement filed pursuant to such Demand is declared effective, and
(ii) such withdrawal shall be irrevocable and, after making such withdrawal,
Comverse shall not be entitled to make any subsequent Demand for a period of
ninety (90) days after the date of such withdrawal.
(f) Effective Demand. For purpose of clause (ii) of Section
2.1(b) hereof, a Demand, if made pursuant to Section 2.1(a) and not withdrawn in
accordance with Section 2.1(e), shall be deemed to have been made only if (i) in
response thereto, the Company shall have filed a Registration Statement, (iii)
such Registration Statement shall have been declared effective under the
4
Securities Act and (iii) such Registration Statement shall not have become the
subject of any stop order, injunction or other order or requirement of the
Commission or any other governmental or administrative agency which prevents the
sale of Registrable Securities pursuant to such Registration Statement, and no
court prevents or otherwise limits the sale of such securities pursuant to such
Registration Statement; provided, however, that, notwithstanding anything to the
contrary set forth in this Section 2.1(f), a Demand shall be deemed to have been
made by Comverse, if Comverse made a Demand and either (x) Comverse withdrew
such Demand after the earlier of (A) the execution of the underwriting agreement
or the execution of the custody agreement with respect to such Demand
Registration or (B) in the absence of any such agreement, the date on which the
Registration Statement filed pursuant to such Demand is declared effective, or
(y) the failure of one or more of the conditions set forth in clauses (i), (ii)
or (iii) of this Section 2.1(f) to be satisfied is attributable to the acts or
omissions of Comverse.
2.2 Piggyback Registration.
(a) Notice of Registration. If, at any time, the Company
proposes to file a registration statement with the Commission in connection with
any public offering of Common Stock (other than in connection with an initial
public offering of Common Stock), whether for the account of the Company or any
other Person (other than a registration statement on Form S-4 or Form S-8 (or
any successor forms under the Securities Act) or other registrations relating
solely to employee benefit plans or any transaction governed by Rule 145 under
the Securities Act), the Company shall give written notice of such proposed
filing and proposed date thereof to each Shareholder that owns Registrable
Securities at least fifteen (15) days before the anticipated filing of such
registration statement, offering such Shareholder the opportunity to offer and
sell Registrable Securities, by means of the prospectus contained in such
registration statement. If such Shareholder desires to have its Registrable
Securities registered under such registration statement pursuant to this Section
2.2, such Shareholder shall advise the Company thereof in writing within ten
(10) days after the date of its receipt of the Company's notice (which request
shall set forth the number of Registrable Securities for which registration is
requested). Subject to Sections 2.3 hereof, the Company shall include in such
registration statement, if filed, all Registrable Securities so requested by
such Shareholder to be included so as to permit such securities to be sold or
disposed of in the manner and on the terms set forth in such request. Such
registration shall hereinafter be called a "Piggyback Registration". The Company
shall have the right at any time to delay or discontinue, without liability to
the Shareholders, any Piggyback Registration under this Section 2.2 at any time
prior to the effective date of the Registration Statement if the proposed
offering of Common Stock contemplated thereunder is discontinued.
(b) Withdrawal Right. Any Shareholder shall have the right
to withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to withdraw; provided, however, that (i) such
withdrawal request must be made in writing prior to the earlier of the execution
of the underwriting agreement or the execution of the custody agreement with
5
respect to such Piggyback Registration and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, such Shareholder shall no longer
have any right to include Registrable Securities in the Piggyback Registration
from which such Shareholder withdrew.
2.3 Allocation of Securities Included in Registration
Statements. In connection with any Registration Statement in which the
Shareholders have requested to include Registrable Securities which relates to
an underwritten public offering, if the managing underwriter(s) of such offering
advise(s) that the inclusion in such Registration Statement of some or all of
the shares sought to be registered thereunder exceeds the number of shares (the
"Saleable Number") that can be sold in an orderly fashion without a substantial
risk that the price per share to be derived from such registration will be
materially and adversely affected, then the number of shares offered thereunder
shall be limited to the Saleable Number and shall be allocated, subject to
Section 3.5 below, as follows:
(i) if such registration is being effected in connection with
any Piggyback Registration requested by the Shareholders for
inclusion pursuant to Section 2.2 hereof, (1) first, to all
the shares of Common Stock that the Company proposes to
register for its own account, (2) second, the difference, if
any, between the Saleable Number and the number of shares to
be included pursuant to clause (1) above, to Registrable
Securities of Comverse, (3) third, the difference, if any,
between the Salable Number and the number of shares to be
included pursuant to clauses (1) and (2) above, to Registrable
Securities of the other Shareholders, pro rata on the basis of
the number of Registrable Securities requested to be included
in such Piggyback Registration by each such Shareholder, until
such Shareholders have sold all such Registrable Securities,
and (4) fourth, the difference, if any, between the Saleable
Number and the number of shares to be included pursuant to
clauses (1), (2) and (3) above, to all other selling
shareholders, pro rata on the basis of the number of shares
offered for sale by each such shareholder; and
(ii) if the registration is being effected pursuant to a
Demand Registration requested by Comverse pursuant to Section
2.1 hereof, (1) first, to Registrable Securities of Comverse,
(2) second, the difference, if any, between such number and
number of shares to be included in such Demand Registration
pursuant to clause (1) above, to Registrable Securities of the
other Shareholders participating in the offering, pro rata, on
the basis of the number of Registrable Securities requested to
be included in such Demand Registration by each such
Shareholder, until such Shareholders have sold all such
Registrable Securities, (3) third, the difference, if any,
between the Saleable Number and the number of shares to be
included pursuant to clauses (1) and (2) above, to shares that
the Company proposes to register for its own account, and (4)
fourth, the difference, if any, between the Saleable Number
and the number of shares to be included pursuant to clauses
6
(1), (2) and (3) above, to all other selling shareholders, pro
rata on the basis of the number of shares requested to be
included by each such shareholder.
2.4 Initial Registration. The Company shall, no later than
60 days after it becomes eligible to file a Registration Statement on Form S-3,
prepare and file a Registration Statement on Form S-3 (or other appropriate
form) for an offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act covering an offering of Registrable Securities, if any,
then owned by Shareholders (other than Comverse) or then purchasable upon the
exercise of outstanding Options held by Shareholders. The Company shall use its
best efforts to cause such Registration Statement to be declared effective as
soon as reasonably practicable after filing thereof with the Commission. Subject
to Section 2.5 hereof, the Company shall use its best efforts to keep such
Registration Statement effective for as long as reasonably specified in the plan
of distribution contained therein.
2.5 Certain Notices; Suspension of Sales. The Company may,
upon written notice to the Registering Shareholders, suspend such Registering
Shareholder's use of any Prospectus (which is a part of any Registration
Statement) for a reasonable period not to exceed ninety (90) days if the Company
in its reasonable judgment believes it may possess material non-public
information the disclosure of which in its reasonable judgment would have a
material adverse effect on the Company and its subsidiaries taken as a whole.
Each Registering Shareholder of Registrable Securities agrees by its acquisition
of such Registrable Securities to hold any communication by the Company pursuant
to this Section 2.5 in confidence.
Article III
REGISTRATION PROCEDURES
3.1 Registration Procedures. Subject to the terms of this
Agreement, whenever the Company is required to effect or cause the registration
of Registrable Securities pursuant to Article II hereof, the Company shall use
commercially reasonable efforts to effect the registration of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable. In connection with any Demand Registration, the Company
shall, except as set forth in Section 2.1(c), as expeditiously as possible (and
in no event more than sixty (60) days from the date of receipt of a Demand)
prepare and file with the Commission a Registration Statement on such form
(including Form S-3) for which the Company then qualifies as the Company shall
deem appropriate and which shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement and in accordance with the intended method of disposition of such
Registrable Securities. The Company shall use commercially reasonable efforts to
cause any Registration Statement filed hereunder to be declared effective as
soon as reasonably practicable after the filing thereof with the Commission,
including, without limitation, preparing and/or filing with the Commission such
other documents as may be necessary to comply with the provisions of the
Securities Act. Subject to the provisions of Section 2.5 hereof, the Company
7
shall as expeditiously as possible prepare and file with the Commission such
amendments and supplements to any Registration Statement filed hereunder and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective (pursuant to Rule 415 under the Securities Act
or otherwise) until the earlier of (i) the date on which all of the Registrable
Securities registered therein shall have been sold, and (ii) ninety (90) days
after such Registration Statement is declared effective.
3.2 Copies; Review.
(a) At least five (5) Business Days before filing a
Registration Statement or Prospectus or any amendment or supplement thereto
(whether before or after effectiveness), the Company will furnish to the
Registering Shareholders copies of all such documents proposed to be filed. Such
documents will be subject to the review of the Registering Shareholders. The
Company will immediately amend such Registration Statement and Prospectus to
include such reasonable changes as the Registering Shareholders and the Company
reasonably agree should be included therein. Any Registering Shareholder
requesting a change which in its reasonable judgment is unreasonably refused by
the Company may withdraw its Registrable Securities from such Registration
Statement.
(b) The Company shall make available for inspection by any
Registering Shareholder, any underwriter participating in any disposition
pursuant to a Registration Statement, and any attorney, accountant or other
agent retained by any such shareholder or underwriter (collectively, the
"Inspectors"), all material financial and other records, pertinent documents and
properties of the Company as shall be necessary to enable them to exercise their
due diligence responsibility. The Company shall cause its officers, directors
and employees to supply all material information requested by any such Inspector
in connection with any such Registration Statement.
3.3 Amendments. Subject to Section 2.5 hereof, the Company
shall (a) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable time period
required herein, (b) cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and (c) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Registering Shareholders set forth in
such Registration Statement or Prospectus supplement.
3.4 Notification. The Company shall promptly notify the
Registering Shareholders and (if requested by any such Person) confirm such
notification in writing, (a) when the Prospectus has been filed, and, with
respect to the Registration Statement, when it has become effective, (b) of any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (c) of the issuance
8
of any stop order suspending the effectiveness of the Registration Statement, or
the refusal or suspension of qualification of registration of Registrable
Securities, or the initiation of any proceedings for that purpose, (d) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, and (e) of any event that makes any material
statement made in the Registration Statement, the Prospectus or any document
incorporated therein by reference untrue or that requires the making of any
changes in the Registration Statement, the Prospectus or any document
incorporated therein by reference in order to make the statements therein, in
light of the circumstances under which they were made, not misleading in any
material respect. Subject to Section 2.5 hereof, the Company will make every
reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible moment. If
any event contemplated by clause (e) occurs, subject to Section 2.5 hereof, the
Company shall promptly prepare a supplement or post-effective amendment to the
Registration Statement or the Prospectus or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities,
the Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Upon receipt of
any notice from the Company that any event of the kind described in clause (b),
(c), (d) or (e) has happened, each Registering Shareholder shall discontinue
offering the Registrable Securities until the Registering Shareholder receives
the copies of the supplemented or amended Prospectus contemplated by the
previous sentence, or until it is advised in writing by the Company that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
3.5 Information Included. The Company may require each
Registering Shareholder to furnish in writing to the Company such information
regarding the Registering Shareholder and the distribution of the Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Registration Statement, and such other information as may be legally
required in connection with such registration including, without limitation, all
such information as may be requested by the Commission or the NASD. Each
Registering Shareholder shall provide such information in writing and signed by
such Shareholder and stated to be specifically for inclusion in the Registration
Statement. The Company may exclude from such registration the Registrable
Securities of any Registering Shareholder that fails to furnish such information
within a reasonable time after receiving such request. Each Registering
Shareholder agrees to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Registering Shareholder not misleading. If requested by the Registering
Shareholders, the Company will as soon as practicable incorporate in a
Prospectus supplement or post-effective amendment such information as the
Registering Shareholders reasonably request be included therein relating to the
sale of the Registrable Securities, including, but not limited to, information
with respect to the number of Registrable Securities being sold and any other
9
terms of the distribution of the Registrable Securities to be sold in such
Offering. Subject to Section 2.5 hereof, the Company will make all required
filings of such Prospectus supplement or post-effective amendment as promptly as
practicable after being notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
3.6 Underwritten Offerings. In the event that the
distribution of the Registrable Securities covered by a Registration Statement
filed hereunder shall be effected by means of an underwriting, the following
provisions shall apply:
(a) if such distribution of Registrable Securities is being
effected pursuant to a Demand Registration, the underwriter(s) shall be
designated by Comverse;
(b) the Company shall (i) cooperate with the
underwriter(s), including attending any road shows and providing such assistance
as the underwriter(s) may reasonably request in connection with the preparation
of any materials necessary or desirable to effect such underwriting, (ii) enter
into any such underwriting agreement as shall be appropriate in the
circumstances, (iii) use commercially reasonable efforts to comply with and
satisfy all of the terms and conditions of each such underwriting agreement to
which it shall be a party, and (iv) comply with all applicable rules and
regulations of the Commission including, without limitation, applicable
reporting requirements under the Exchange Act; and
(c) if such distribution of Registrable Securities is being
effected pursuant to a Demand Registration, including, without limitation, in
any primary offering by the Company, any over-allotment option to be granted to
the managing underwriter(s) shall be allocated to and granted by any Person
designated by Comverse, and if such distribution is being effected pursuant to a
Piggyback Registration, any over-allotment option to be granted to the managing
underwriter(s) shall be allocated to and granted by the Company (in the event of
any primary offering by the Company) and all selling shareholders pro-rata based
on the number of shares sold pursuant to such offering.
3.7 Copies. The Company will (i) promptly furnish to the
Registering Shareholders without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference), and (ii)
promptly deliver to the Registering Shareholders without charge, as many copies
of the Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request. The Company consents
to the use of the Prospectus or any amendment or supplement thereto by the
Registering Shareholders in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto.
3.8 Blue Sky Registration. Prior to any offering of
Registrable Securities covered by a Registration Statement under Sections 2.1,
2.2 or 2.4, the Company will register or qualify or cooperate with the
10
Registering Shareholders and their respective counsel in connection with the
registration or qualification of such Registrable Securities under the
securities or blue sky laws of any such jurisdictions in the United States as
the Registering Shareholders reasonably request in writing, and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities. The Company will not be required
to take any actions under this Section 3.8 if such actions would require the
Company to submit to the general taxation of any jurisdiction where it is not
then so subject or to file in any jurisdiction any general consent to service of
process.
3.9 Certificates. The Company will cooperate with the
Registering Shareholders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold that do not bear any
restrictive legends. Such certificates will be in such denominations and
registered in such names as the Registering Shareholders request at least two
(2) Business Days prior to any sale of Registrable Securities.
3.10 Section 11(a) Notice. The Company will make generally
available to its shareholders the information required pursuant to the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.11 Registration Expenses.
(a) Company Expenses. Subject to the provisions of Section
3.11(b) below, the Company shall pay all expenses incident to the Company's
performance of or compliance with this Agreement, including, but not limited to,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, fees and expenses incurred in connection with the
quotation or listing of the Registrable Securities on Nasdaq (or any other
exchange on which such securities are then listed), transfer agent fees,
printing expenses, messenger expenses, telephone and delivery expenses, and fees
and disbursements of counsel to the Company and of independent certified public
accountants of the Company. The Company shall also pay for (i) the fees and
expenses of one firm of legal counsel, if any, retained to represent all the
Registering Shareholders in connection with any Registration Statement filed
hereunder, (ii) the Company's internal expenses, including the expense of any
annual audit, and (iii) the fees and expenses of any Person retained by the
Company.
(b) Shareholder Expenses. The Registering Shareholders
shall pay all underwriting fees, commission and discounts with respect to the
sale of any Registrable Securities and any transfer taxes incurred in respect of
such sale. Each Registering Shareholder shall also be responsible for the
payment of all fees and expenses of legal counsel retained by it, other than the
fees and expenses of the firm of legal counsel retained to represent all the
Registering Shareholders in connection with any Registration Statement filed
hereunder for which the Company is responsible pursuant to Section 3.11(a)
above.
11
Article IV
INDEMNIFICATION
4.1 Indemnification by the Company. The Company will
indemnify and hold harmless each of the Registering Shareholders from and
against any and all losses, claims, damages and liabilities ("Losses")
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted to which the Registering
Shareholder may become subject under the Securities Act, the Exchange Act or
other federal or state securities law or regulation, at common law or otherwise,
insofar as such Losses arise out of or are based upon (a) any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or any amendment or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (b)
any violation by the Company of the Securities Act or the Exchange Act, or other
federal or state securities law applicable to the Company and relating to any
action or inaction required of the Company in connection with such registration.
In addition, the Company will reimburse the Registering Shareholder for any
reasonable investigation, legal or other expenses incurred by such Registering
Shareholder in connection with investigating or defending any such Loss.
Notwithstanding anything herein to the contrary, the Company will not be liable
with respect to the portion of any such Loss that (i) arises out of or is based
upon any alleged untrue statement or alleged omission made in such Registration
Statement, preliminary Prospectus, Prospectus, or amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Registering Shareholders specifically for use therein or (ii)
attributable to a Registering Shareholder's (A) use of a Prospectus after being
notified by the Company to suspend use thereof pursuant to Section 3.4 above or
(B) failure to deliver a final Prospectus to the Person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in an amended or supplemented
Prospectus prepared by the Company and delivered to the Registering Shareholder
at or prior to the time written confirmation of sale to such Person was required
to be made. The foregoing indemnity will remain in full force and effect
regardless of any investigation made by or on behalf of the Registering
Shareholder, and will survive the transfer of such securities by the Registering
Shareholder.
4.2 Indemnification by Registering Shareholders. If a
Registering Shareholder sells Registrable Securities under a Prospectus that is
part of a Registration Statement, the Registering Shareholder shall indemnify
and hold harmless the Company, its directors and each officer who signed such
Registration Statement and each Person who controls the Company (within the
meaning of Section 15 of the Securities Act) (each, a "Controlling Person")
under the same circumstances as the foregoing indemnity from the Company to the
12
Registering Shareholders but only to the extent that such Losses arise out of or
are based upon any untrue or allegedly untrue statement of a material fact or
omission or alleged omission of a material fact that was made in the Prospectus,
the Registration Statement, or any amendment or supplement thereto, in reliance
upon and in conformity with written information relating to a Registering
Shareholder furnished to the Company by a Registering Shareholder expressly for
use therein. In no event will the aggregate liability of a Registering
Shareholder exceed the amount of the net proceeds received by the Registering
Shareholder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. Such indemnity will remain in full force and effect
regardless of any investigation made by or on behalf of the Company or such
officer, director, employee or Controlling Person, and will survive the transfer
of such securities by the Registering Shareholder.
4.3 Contribution. If the indemnification provided for in
Sections 4.1 or 4.2 is unavailable to an indemnified party, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, will have a
joint and several obligation to contribute to the amount paid or payable by such
indemnified party as a result of such Losses. Such contribution will be in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, will be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying party
or indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any such Losses
will be deemed to include any investigation, legal or other fees or expenses
incurred by such party in connection with any investigation or proceeding, to
the extent such party would have been indemnified for such expenses if the
indemnification provided for in Sections 4.1 or 4.2 was available to such party.
If, however, the allocation provided above is not permitted by applicable law,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative faults but also the relative benefits of the indemnifying party
and the indemnified party as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 4.3 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 preceding sentences of this
Section 4.3. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
13
4.4 Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (a) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification,
and (b) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that the
failure to give such notice shall not relieve an indemnifying party of liability
except to the extent it has been prejudiced as a result. Any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in (but not control) the defense of such claim, but the fees and
expenses of such counsel will be at the expense of such Person and not of the
indemnifying party unless (x) the indemnifying party has agreed to pay such fees
or expenses, (y) the indemnifying party has failed to assume the defense of such
claim and employ counsel reasonably satisfactory to such Person within a
reasonable period of time pursuant to this Agreement, or (z) a conflict of
interest exists between such Person and the indemnifying party with respect to
such claims that would make such separate representation required under
applicable ethical rules. In the case of clause (z) above, 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. If such defense is not assumed by the indemnifying party, the
indemnifying party shall not be subject to any liability for any settlement made
without its consent (but such consent shall not be unreasonably withheld). No
indemnified party will be required to consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term the giving of
a release, by all claimants or plaintiffs, to such indemnified party from all
liability with respect to such claim or litigation. Any 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 (other than
required local counsel) for all parties indemnified by such indemnifying party
with respect to such claim.
Article V
OTHER AGREEMENTS
5.1 Restrictions on Public Sale by the Shareholders. If
requested by the managing underwriter(s) of an underwritten public offering, the
Shareholders will not effect any public sale or distribution of securities of
the same class (or securities exchangeable or exercisable for or convertible
into securities of the same class) as the securities included in such offering
(including, but not limited to, a sale pursuant to Rule 144 of the Securities
Act) during the 10-day period prior to and the 180-day period (or shorter period
requested by the underwriter) beginning on the effective date of, such offering.
5.2 Rule 144. The Company shall file, on a timely basis,
all reports required to be filed by it under the Securities Act and the Exchange
Act, and will take such further action and provide such documents as the
Shareholders may reasonably request, all to the extent required from time to
time to enable the Shareholders to sell Registrable Securities without
registration under the Securities Act within the limitation of the conditions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
14
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of a Shareholder, the Company will deliver to
the Shareholder a statement verifying that it has complied with such information
and requirements.
Article VI
MISCELLANEOUS
6.1 Amendments; Waivers. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
6.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to its subject matter, and
supersedes and replaces all prior agreements and understandings of the parties
in connection with such subject matter.
6.3 Notices. All notices and other communications hereunder
shall be given in writing and delivered personally, by registered or certified
mail (postage prepaid, return receipt requested), by overnight courier (postage
prepaid), facsimile transmission or similar means, to the party to receive such
notices or communications at the address set forth below (or such other address
as shall from time to time be designated by such party to the other parties in
accordance with this Section 6.3):
If to the Company: Ulticom, Inc.
0000 Xxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attention: President & Chief
Executive Officer
Telecopy: (000) 000-0000
If to Comverse: Comverse Technology, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Counsel
Telecopy: (000) 000-0000
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person to
whom such notice or communication shall have been personally delivered, the
acknowledgment of receipt returned to the sender by the applicable postal
authorities, the confirmation of delivery rendered by the applicable overnight
courier service, or the confirmation of a successful facsimile transmission of
such notice or communication. A copy of any notice or other communication given
by any party to any other party hereto, with reference to this Agreement, shall
be given at the same time to the other parties to this Agreement.
15
6.4 GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS
AGREEMENT, AND THE RESPECTIVE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREUNDER.
6.5 Assignment. No Shareholder shall be permitted assign
any of its rights or obligations hereunder by operation of law or otherwise
without the prior written consent of the Company; provided, that a Shareholder
may assign any of its rights or obligations hereunder to any Affiliate of such
Shareholder without obtaining the prior written consent of the Company, provided
that such Affiliate agrees in writing to be bound by the provisions of this
Agreement that are applicable to such Shareholder as if such Affiliate was an
original party hereto; provided, further, however, that notwithstanding any such
assignment such Shareholder shall continue to be liable for the performance of
all obligations of such Shareholder and those of its assignee hereunder.
6.6 Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law. If any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
6.7 No Waiver. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
6.8 No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any Person
who or which is not a party hereto. Any Person who or which is not a party
hereto shall not be entitled to any benefit hereunder except that any Option
Holder designated in writing by Comverse from time to time shall be entitled to
become a party hereto by executing a counterpart to this Agreement in the form
annexed hereto as Exhibit A. If such Option Holder executes a counterpart to
this Agreement in the form annexed hereto as Exhibit A, such Option Holder shall
thereafter be deemed to have agreed to be bound by the provisions hereof
applicable to Shareholders as if such Option Holder was an original party
hereto, and such Option Holder shall thereafter be entitled to all benefits
accorded to a Shareholder hereunder.
16
6.9 Headings. The Section headings in this Agreement are
for convenience of reference only and are not intended to be a part of this
Agreement or to affect the meaning or interpretation of this Agreement.
6.10 Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first set forth above.
ULTICOM, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President and
Chief Executive Officer
COMVERSE TECHNOLOGY, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Cheif Financial Officer
17
EXHIBIT A
[COUNTERPART SIGNATURE PAGE TO THE REGISTRATION
RIGHTS AGREEMENT DATED FEBRUARY 1, 2000]
REFERENCE IS MADE to the Registration Rights Agreement,
dated as of February 1, 2000, by and among Ulticom, Inc. (the "Company"),
Comverse Technology, Inc. ("Comverse") and the other parties, if any, thereto
(the "Agreement"). Capitalized terms defined in the Agreement and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
THE UNDERSIGNED hereby represents to the Company that (i)
it is a current or former director, officer and/or employee of Comverse or of
any subsidiary thereof or an Affiliate of a current or former director, officer
or employee, and (ii) it beneficially owns one or more options to purchase from
Comverse shares of common stock, no par value, of the Company ("Common Stock")
or it beneficially owns shares of Common Stock acquired upon the exercise of
such options. The undersigned hereby irrevocably agrees to be a party to the
Agreement and to be bound by all provisions thereof applicable to Shareholders,
as if the undersigned was an original party thereto.
IN WITNESS THEREOF, the undersigned has executed this
counterpart to the Agreement on this ____ day of _____________, _____.
--------------------------------------
Name:
