Exhibit 10.23
SETTLEMENT AND TERMINATION AGREEMENT
This Settlement and Termination Agreement (the "AGREEMENT") is entered
into by and between Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX
XXXXX") and ScanSoft, Inc. (the "COMPANY") (collectively with Xxxxxxx Xxxxx, the
"PARTIES"), effective as of December 28 2001 ("EFFECTIVE DATE").
RECITALS
A. The Company and Xxxxxxx Xxxxx are parties to that certain engagement
letter dated December 13, 1999 (the "ENGAGEMENT LETTER").
B. Pursuant to the terms of the Engagement Letter, Xxxxxxx Xxxxx was to
receive certain payments from the Company as compensation for its role as
financial advisor with respect to certain transactions (the "ORIGINAL PAYMENT").
X. Xxxxxxx Xxxxx now agrees to accept payment other than the Original
Payment as payment in full to satisfy fees and expenses due by the Company to
Xxxxxxx Xxxxx under the Engagement Letter (the "SETTLEMENT PAYMENT").
D. The parties intend for this Agreement to be the full, final, and
exclusive embodiment of the parties' agreement relating to the matters set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
other good and valuable consideration contained herein, it is hereby agreed by
and between the parties hereto as follows:
1. CONSIDERATION. As full and final payment in satisfaction of all fees
and expenses to Xxxxxxx Xxxxx by the Company in connection with the Engagement
Letter, the Company shall deliver to Xxxxxxx Xxxxx:
(a) Within 20 days of the execution of this Agreement, a
certificate representing sixty-five thousand one hundred (65,100) shares of
Common Stock of the Company, par value $0.001 per share (the "STOCK"), which
such number represents the number of shares of stock, rounded to the nearest
whole 100 share lot, equal in value to ($335,719.00), based on a per share price
of ($5.16); and
(b) No later than January 15, 2002, cash in the amount of
($335,719.00) by wire transfer to an account designated by Xxxxxxx Xxxxx (the
"CASH PAYMENT").
(c) Hereinafter, the Stock and the Cash Payment, together, may be
referred to as the "CONSIDERATION."
2. TERMINATION. The Company and Xxxxxxx Xxxxx agree that the Engagement
Letter shall be terminated as of the date hereof; provided that nothing in this
Agreement shall be deemed to amend, modify or otherwise affect the provisions in
the Engagement Letter relating to indemnification, limitations on liability of
Indemnified Parties, contribution, settlements, the status of Xxxxxxx Xxxxx as
an independent contractor, the limitation on whom Xxxxxxx Xxxxx shall owe any
duties and waiver of the right to trial by jury. Upon receipt of the
Consideration by Xxxxxxx Xxxxx the parties acknowledge that the Company will
have satisfied all obligations to pay fees and expenses under the Engagement
Letter.
3. LIMITATIONS ON TRANSFER. Xxxxxxx Xxxxx shall not assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Stock
except in compliance with applicable securities laws.
4. RESTRICTIVE LEGENDS. All certificates representing the Stock shall
have endorsed thereon legends in substantially the following forms (in addition
to any other legend which may be required by other agreements between the
parties hereto):
(a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS."
(b) Any legend required by state securities laws.
5. INVESTMENT REPRESENTATIONS. In connection with the receipt of the
Stock, Xxxxxxx Xxxxx represents to the Company the following:
(a) Xxxxxxx Xxxxx is accepting the Stock for investment for
Xxxxxxx Xxxxx'x own account only (or that of an affiliate) and not with a view
to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "SECURITIES ACT").
(b) Xxxxxxx Xxxxx understands that the Stock has not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
Xxxxxxx Xxxxx'x investment intent as expressed herein.
(c) Xxxxxxx Xxxxx acknowledges and agrees that the Stock must be
held indefinitely unless it is subsequently registered under the Securities Act
or an exemption from such registration is available. Xxxxxxx Xxxxx has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act as in effect from time to time, which permits limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring following the
required holding period under Rule 144
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and the number of shares being sold during any three-month period not exceeding
specified limitations.
(d) Xxxxxxx Xxxxx further warrants and represents that Xxxxxxx
Xxxxx has either (i) preexisting personal or business relationships with the
Company or any of its officers, directors or controlling persons, or (ii) the
capacity to protect its own interests in connection with the purchase of the
Stock by virtue of the business or financial expertise of itself or of
professional advisors to Xxxxxxx Xxxxx who are unaffiliated with and who are not
compensated by the Company or any of its affiliates, directly or indirectly.
6. REPRESENTATIONS OF THE COMPANY.
(a) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of Delaware, has the corporate
power and corporate authority to own its property and to conduct its business as
currently conducted.
(b) The Stock has been duly authorized and reserved and, when
issued in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable.
(c) The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this Agreement and
the Registration Rights Agreement (as defined below) and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company, and no
further action is required by the Company to authorize this Agreement or the
Registration Rights Agreement. Each of this Agreement and the Registration
Rights Agreement has been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and general
equity principles.
(d) The Company files certain periodic reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "SEC DOCUMENTS"). As of their respective dates, none of the SEC Documents,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
7. REGISTRATION RIGHTS AGREEMENT. Simultaneously with the execution and
delivery of this Agreement, the Company and Xxxxxxx Xxxxx have entered into a
Registration Rights Agreement in the form attached hereto as EXHIBIT A, dated as
of the date hereof (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company has agreed to register the Stock under certain circumstances.
8. REFUSAL TO TRANSFER. Other than with respect to a Xxxxxxx Xxxxx
affiliate, the Company shall not be required (a) to transfer on its books any
shares of the Stock which shall
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have been transferred in violation of any of the provisions set forth in this
Agreement or (b) to treat as owner of such shares or to accord the right to vote
as such owner or to pay dividends to any transferee to whom such shares shall
have been so transferred.
9. SUCCESSORS AND ASSIGNS. This Agreement shall bind the personal
representatives, successors and assigns of both Xxxxxxx Xxxxx and the Company,
and inure to the benefit of both Xxxxxxx Xxxxx and the Company, and their
respective successors and assigns.
10. COSTS AND FEES. Except as specifically set forth herein, the parties
will bear their own costs, expenses, and attorneys' fees, whether taxable or
otherwise, incurred in or arising out of or in any way related to the matters
released herein.
11. VOLUNTARY AND KNOWING. Each party acknowledges that it has had the
opportunity to consult with legal counsel regarding the meaning and consequences
of this Agreement, and further acknowledges that it has read and understands
this Agreement, and that it has executed this Agreement on its own free will and
accord, without any duress or undue influence.
12. WAIVER. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instruments signed by the Party
charged with the waiver or estoppel; no written waiver shall be deemed a
continuing waiver unless specifically stated therein, and the written waiver
shall operate only as to the specific term or condition waived, and not for the
future or as to any other act than that specifically waived.
13. TAXES. The parties expressly acknowledge that no party has made, nor
herein makes, any representation about the tax consequences of any consideration
provided by or to any party pursuant to this Agreement.
14. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, postage prepaid, by hand or by messenger,
addressed:
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(a) if to the Holder, to:
Xxxxxxx Lynch , Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center - 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telephone Number: 000-0000000
Facsimile Number: 000-000-0000
With a copy to:
Xxxxxxxxx Xxxxx, Esq.
4 World Financial Center - 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
or at such other address as Holder shall have furnished to
the Company.
(b) if to the Company, to:
ScanSoft, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
or at such other address as the Company shall have furnished
to the Holder
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Each such notice or other communication shall, for all purposes of this
Agreement, be treated as effective or having been given when actually delivered
as provided above, if delivered personally or by messenger, or, on the day shown
on the return receipt, if sent by mail or other delivery service.
15. DUTY TO EFFECTUATE. Each of the Parties agrees to perform any lawful
additional acts, including the execution of additional agreements, as are
reasonably necessary to effectuate the purpose of this Agreement.
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16. ENTIRE AGREEMENT. Subject to Section 2 hereof, this Agreement
constitutes the complete, final and exclusive embodiment of the entire agreement
between the parties with respect to the subject matter of this Agreement. This
Agreement is executed without reliance upon any promise, warranty or
representation, written or oral, by any party or any representative of any party
other than those expressly contained herein. This Agreement may not be amended
or modified except in a writing signed by Xxxxxxx Xxxxx and the Company.
17. SEVERABILITY. If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement, and the provision in question
shall be modified by the court so as to be rendered enforceable.
18. CONSTRUCTION. The parties agree that they have been represented by
counsel during the negotiation, preparation and execution of this Agreement and
have had the opportunity to influence the choice of language and, therefore,
waive the application of any law, regulations, holding or rule of construction
providing that ambiguities in this Agreement or other document will be construed
against the party drafting such agreement or document.
19. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
20. APPLICABLE LAW. This Agreement shall be deemed to have been entered
into and shall be construed and enforced in accordance with the laws of the
State of New York as applied to contracts made and to be performed entirely
within New York.
21. JURISDICTION. Each of the parties submits to the jurisdiction of any
state or federal court sitting in the State of New York, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Any action brought in
contravention of this paragraph by one party is subject to dismissal at any time
and at any stage of the proceedings by the other, and no action taken by the
other in defending, counterclaiming or appealing shall be construed as a waiver
of this right to immediate dismissal. A party bringing an action in
contravention of this paragraph shall be liable to the other party for the
costs, expenses and attorney's fees incurred in successfully dismissing the
action or successfully transferring the action to a forum located within the
State of New York.
22. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as of the date set forth above.
SCANSOFT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Print Name: Xxxxxxx X. Xxxxxx
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Title: Senior Vice President and Chief Financial Officer
-------------------------------------------------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Print Name: Xxxx Xxxxxxxx
-------------------------
Title: Vice President
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[SIGNATURE PAGE TO SETTLEMENT AND TERMINATION AGREEMENT]
EXHIBIT A
SCANSOFT, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made effective as
of December 28, 2001 (the "EFFECTIVE DATE"), by and between ScanSoft, Inc. (the
"COMPANY") and Xxxxxxx Xxxxx & Co. Inc. (the "HOLDER").
RECITALS
A. The Company has entered into a Settlement and Termination
Agreement with the Holder dated as of the date hereof (the "SETTLEMENT
AGREEMENT") pursuant to which the Company will issue 65,100 shares of Common
Stock of the Company (the "STOCK") to Holder.
B. The Settlement Agreement contemplates the simultaneous
execution of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the terms below
shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal rule or statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"REGISTRABLE SECURITIES" means the Stock, or shares issuable in
respect thereof upon any stock split, stock dividend, recapitalization, merger
or other reorganization; provided, however, that securities shall only be
treated as Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"REGISTRATION EXPENSES" means all expenses, except Selling Expenses,
incurred by the Company in complying with Section 4 hereof, including without
limitation, all registration, qualification and filing fees, printing expenses,
fees and disbursements of counsel for the Company, "blue sky" fees and expenses,
and the expense of any special audits incident to or required by any such
registration.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" means (i) all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holder and (ii) all fees and disbursements of counsel for the Holder.
2. RESTRICTIONS ON TRANSFERABILITY. The Registrable Securities, and any
other securities issued in respect of such securities upon any stock split,
stock dividend, recapitalization, merger or other reorganization, shall be
subject to the restrictions on transfer set forth in the Settlement Agreement.
Each certificate evidencing the securities so transferred shall bear, except if
such transfer is made pursuant to Rule 144 or pursuant to an effective
registration statement, the restrictive legend set forth in Section 3 below,
except that such certificate shall not bear such restrictive legend if, in the
opinion of counsel for such holder, such legend is not required in order to
establish or ensure compliance with the provisions of the Securities Act.
3. RESTRICTIVE LEGEND. Each certificate representing the Registrable
Securities shall be stamped or otherwise imprinted with the following or similar
legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
The Holder consents to the making of a notation by the Company on its records
and the giving of instructions to any transfer agent of its capital stock in
order to implement the restrictions on transfer established in this Agreement.
4. REGISTRATION ON FORM S-3.
(a) Registration. If, after the Effective Date, the Company shall
receive from the Holder a written request that the Company file a registration
statement on Form S-3 (or any successor form, a "FORM S-3 REGISTRATION
STATEMENT"), the Company shall cause a Form S-3
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Registration Statement covering all Registrable Securities to be filed within or
upon the earlier of (i) 20 business days of such written request or (ii) the
filing of any other Form S-3 Registration Statement covering the sale of Company
securities, and shall use reasonable efforts to cause such registration
statement to be declared effective within 90 days of such written request. The
Company shall use its reasonable efforts to keep such registration statement
effective until all of the Registrable Securities have been sold, except as
provided in Section 4(b).
(b) Limitations on Registration and Sale of Registrable
Securities. Notwithstanding anything in this Agreement to the contrary, the
Company's obligations and the Holder's rights under this Section 4 are subject
to the limitations and qualifications set forth below, which may be waived in
writing by the Company.
(i) The Company shall have no obligation to keep effective a
registration statement hereunder following such time as the Holder is eligible
to sell all of its Registrable Securities in a three-month period under the
applicable provisions of Rule 144.
(ii) The Holder will sell Registrable Securities pursuant to
an effective registration statement, unless such sale would otherwise be exempt
from the registration requirements of the Securities Act.
(iii) If the Company furnishes to the Holder a certificate
signed by the Chief Executive Officer or Chief Financial Officer of the Company
stating that, in the good faith reasonable judgment of the Chief Executive
Officer, after consultation with the Company's advisors and the Board of
Directors of the Company, it would be detrimental to the Company for a Form S-3
Registration Statement to be effected due to (A) the existence of a material
development or potential material development involving the Company that the
Company would be obligated to disclose in the prospectus contained in the Form
S-3 Registration Statement, which premature disclosure, in the good faith
judgment of the Board of Directors, would reasonably be expected to have an
adverse effect on the Company or otherwise be inadvisable or (B) the existence
of other facts or circumstances as a result of which the prospectus contained or
to be contained in the Form S-3 Registration Statement includes or would include
an untrue statement of a material fact or omits or would omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, then the Company may defer the filing of the Form S-3
Registration Statement until the earlier of (1) the date on which such material
information is disclosed to the public or ceases to be material, (2) up to 60
calendar days after the date of the certificate delivered pursuant to this
Section 4(b)(iii), or (3) the filing of any other Form S-3 Registration
Statement covering the sale of Company securities.
(c) Registration Procedures. In connection with any registration
required under this Agreement, the Company shall take the actions set forth
below.
(i) The Company shall permit a single firm of counsel
designated by the Holder to review the Form S-3 Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to the
filing of the Form S-3 Registration Statement with the Commission and shall not
file the Form S-3 Registration Statement in a form to which such counsel
reasonably objects.
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(ii) The Company shall notify the Holder of any stop order
issued or threatened by the Commission or other suspension of effectiveness of
the Form S-3 Registration Statement and will take all reasonable actions
necessary or appropriate to prevent the entry of such stop order or to remove it
if entered and will notify the Holder of the resolution of such situation.
(iii) The Company shall furnish to the Holder, and each
underwriter, if any, of Registrable Securities covered by the Form S-3
Registration Statement filed pursuant to this Agreement (A) promptly after the
same is prepared and publicly distributed, filed with the Commission, or
received by the Company, one copy of the Form S-3 Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus, and each
amendment or supplement thereto, and, as promptly as practicable after the date
of effectiveness of the Form S-3 Registration Statement or any amendment
thereto, a notice stating that the Form S-3 Registration Statement or amendment
thereto has been declared effective, and (B) such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
registration statement (including each preliminary prospectus), in conformity
with the requirements of the Securities Act, and such other documents as the
Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Holder. Such delivery of documents pursuant
to (B) above shall be made by the Company within three (3) trading days of
receipt of a request therefor from the Holder.
(iv) The Company shall use its commercially reasonable
efforts to register or qualify the Registrable Securities under the securities
or "blue sky" laws of each state of the United States of America as any of the
Holder or underwriters, if any, of the Registrable Securities covered by a
registration statement filed hereunder reasonably requests, and shall do any and
all other acts and things which may be reasonably necessary or advisable to
enable the Holder and each underwriter, if any, to consummate the disposition in
such states of the Registrable Securities owned by the Holder; provided that the
Company shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection (iv), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(v) The Company shall immediately notify the Holder of the
happening of any event which comes to the Company's attention if, as a result of
such event, the prospectus included in the Form S-3 Registration Statement, as
then in effect, contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and the Company
shall promptly prepare and furnish to each Holder and file with the Commission a
supplement or amendment to such prospectus or registration statement or take
such other action so that such prospectus or registration statement will no
longer contain any 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.
(vi) The Company shall enter into customary agreements
(including an underwriting agreement with Xxxxxxx Xxxxx in customary form
including customary representations and warranties, covenants and closing
conditions) and take all such other reasonable and customary actions as the
Holder or the underwriters, if any, may reasonably request in order to expedite
or
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facilitate the disposition of the Registrable Securities in accordance with the
terms of this Agreement.
(vii) With respect to any disposition pursuant to a
registration statement filed under this Agreement, the Company shall cause the
officers, directors and employees of the Company and each of its subsidiaries to
supply such information and respond to such inquiries as the Holder or any
underwriter or agent may reasonably request or make for the purpose of
exercising its due diligence responsibility and, in particular, confirming that
such registration statement does not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading.
(viii) The Company shall pay any fees for the additional
listing of the Shares of its common stock on the Nasdaq National Market as
required by the Nasdaq National Market, or such other principal market as the
Company's Common Stock may then be listed or traded, and take such other acts as
may be necessary to secure such listing.
5. OTHER REGISTRATION RIGHTS. The Holder acknowledges that certain
other securityholders of the Company may now or hereafter have registration
rights, and that such other securityholders may be entitled to sell their
securities at the same time, or pursuant to the same registration and
underwriting, as the Holder hereunder. Notwithstanding anything set forth
herein, the registration rights conferred herein are subordinate in all respects
to the registration rights conveyed to Xerox Corporation in that certain
Registration Rights Agreement by and among Visioneer, Inc. and Xerox Corporation
dated March 2, 1999.
6. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with the Company's obligations hereunder shall be borne by the
Company. All Selling Expenses relating to securities proposed to be registered
hereunder and all other registration expenses shall be borne by the Holder.
7. INDEMNIFICATION.
(a) The Company will indemnify the Holder, each of its officers
and directors, employees, partners, advisors and agents, and each person
controlling the Holder within the meaning of Section 15 of the Securities Act,
with respect to the registration which has been effected pursuant to this
Agreement, against all expenses, claims, losses, damages or liabilities (or
actions or proceedings in respect thereof), including reasonable costs of
investigation and reasonable legal fees and expenses and any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, preliminary prospectus,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, or arising out of or based on any
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 in which they were made, not misleading or (ii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other applicable securities law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities and, in either case, the Company will
reimburse each
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Indemnified Party (as defined in Section 7(c)), for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and contained in written information furnished to the Company by an
instrument duly executed by the Holder or controlling person or their agent, and
stated to be specifically for use therein; and provided, further, that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement, alleged untrue statement, omission or
alleged omission made in a preliminary prospectus, such indemnity agreement
shall not inure to the benefit of any person, if a copy of the final prospectus
or an amended or supplemented prospectus, as applicable, was furnished to the
Holder or an underwriter within the period of time required by the Securities
Act, and if the final prospectus or the amended or supplemented prospectus, as
applicable, cured the defect giving rise to the loss, liability, claim or
damage. The Company also agrees to indemnify underwriters participating in the
distribution, their officers, directors, employees, partners and agents, and
each person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above, if so requested.
(b) The Holder will indemnify the Company, each of its directors
and officers, employees, partners, advisors and agents and each person
controlling the Company within the meaning of Section 15 of the Securities Act
against all claims, losses, damages and liabilities (or actions or proceedings
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, preliminary prospectus, offering circular or other
document, or 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, and will reimburse each Indemnified Party for any legal or any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, but only to the
extent that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in reliance upon and contained in written information
furnished to the Company by an instrument duly executed by such Holder or
controlling person or their agent and stated to be specifically for use therein;
provided, however, that the foregoing indemnity is subject to the condition
that, insofar as it relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in a preliminary prospectus, such indemnity
agreement shall not inure to the benefit of any person, if a copy of the final
prospectus or an amended or supplemented prospectus, as applicable, was
furnished by the Company to the Holder or underwriter within the time period
required by the Securities Act, and if the final prospectus, as amended or
supplemented, as applicable, cured the defect giving rise to the loss,
liability, claim or damage; and provided further, however, that the Holder shall
be liable for only that amount as does not exceed the net proceeds actually
received by the Holder as a result of the offering of Registrable Securities to
which the loss, liability, claim or damage relates. The Holder also agrees to
indemnify underwriters participating in the distribution, their officers,
directors, employees, partners and agents, and each person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above, if so requested.
(c) Each party entitled to indemnification under this Section 7
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING
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PARTY") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that (i) counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, (ii) that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7 unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action, and then only to the extent that such Indemnifying Party is
materially prejudiced, and (iii) that the Indemnifying Party shall not assume
the defense for matters as to which, in the reasonable opinion of counsel
retained by the Indemnified Party, there is a conflict of interest or there are
separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which (i)
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
to such claim or litigation and a covenant not to xxx or (ii) includes admission
of fault by the Indemnified Party. The indemnification required by this Section
7 shall be made by periodic payments of expenses, losses, damage or liability
incurred during the course of the investigation or defense, as such expenses,
losses, damage or liability are incurred and are due and payable.
8. CONTRIBUTION. If for any reason the indemnification provided for in
Section 7 is unavailable to an Indemnified Party or insufficient to hold it
harmless as contemplated by Section 7, 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, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and the Indemnified Party on the other hand from the offering of
the Registrable Securities or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Indemnifying
Party and the Indemnified Party, as well as any other relevant equitable
considerations, provided that the Holder shall not be required to contribute an
amount greater than the dollar amount of the net proceeds received by the Holder
with respect to the sale of the Registrable Securities giving rise to such
indemnification obligation. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by (i)
pro rata allocation (even if all Holders or any agents for the Holders or any
underwriters of the Registrable Securities, or all of them, were treated as one
entity for such purpose), or (ii) by any other method that does not take into
account the equitable considerations referred to in this Section 8. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action, proceeding or claim. 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.
9. INFORMATION BY HOLDER. The Holder shall furnish to the Company such
information regarding the Holder, the Registrable Securities held by it and the
distribution proposed by the Holder as the Company may reasonably request in
writing and as shall be required in connection with any registration referred to
in this Agreement. Notwithstanding anything contained herein to
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the contrary, the Company shall have no obligation to effect any registration
hereunder prior to its receipt of such information.
10. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use all reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) Furnish to the Holder, so long as the Holder owns any
Registrable Securities, within a reasonable time after the Holder's written
request, a written statement by the Company as to its compliance with the
foregoing requirements.
11. TRANSFER OF REGISTRATION RIGHTS. The rights granted to the Holder to
cause the Company to register securities in accordance with Section 4 may not be
assigned to any person that is not an affiliate of the Holder without the prior
written consent of the Company in its sole discretion.
12. AMENDMENT. Except as otherwise provided above, any provision of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder.
13. GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of New York, without regard to conflict of laws
provisions.
14. ENTIRE AGREEMENT. This Agreement and the Settlement Agreement
constitute the full and entire understanding and agreement between the parties
regarding the matters set forth herein. Except as otherwise expressly provided
herein, all other agreements regarding the registration rights of the Holder
shall hereby expire. The provisions hereof shall inure to the benefit of, and be
binding upon the successors, permitted assigns, heirs, executors and
administrators of the parties hereto.
15. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, postage prepaid, by hand or by messenger,
addressed:
(a) if to the Holder, to:
Xxxxxxx Lynch , Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center - 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
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Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
With a copy to:
Xxxxxxxxx Xxxxx, Esq.
4 World Financial Center - 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
or at such other address as the Holder shall have furnished to
the Company.
(b) if to the Company, to:
ScanSoft, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
or at such other address as the Company shall have furnished
to the Holder,
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Each such notice or other communication shall, for all purposes of this
Agreement, be treated as effective or having been given when actually delivered
as provided above, if delivered personally or by messenger, or, on the day shown
on the return receipt, if sent by mail or other delivery service.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SCANSOFT, INC.
By:__________________________
Name:________________________
Title:_______________________
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:__________________________
Name:________________________
Title:_______________________
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
