EXHIBIT 4.1(j)
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of November 24,
2005, by and among VocalTec Communications Ltd., a corporation organized under
the laws of the State of Israel, with headquarters located at 0 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx (the "COMPANY"), and the undersigned shareholders (each, a
"SHAREHOLDER", and collectively, the "SHAREHOLDERS").
WHEREAS:
A. In connection with the Share Sale and Purchase Agreement by and
among the parties hereto and Tdsoft Ltd. dated as of October 27, 2005 (the
"SECURITIES PURCHASE AGREEMENT"), the Company has agreed, upon the terms
and subject to the conditions set forth in the Securities Purchase
Agreement, to issue and sell to each Shareholder Ordinary Shares, NIS 0.01
nominal value per share, of the Company (the "ORDINARY SHARES").
B. The Company has agreed to provide to the Shareholders certain
registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 ACT" or the "SECURITIES ACT"), and applicable
state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Shareholders, intending to be legally bound, hereby agree as follows:
ARTICLE 1
REGISTRATION RIGHTS
The Company and the Shareholders each covenant and agree as follows:
1.1 DEFINITIONS
(a) The terms "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration
or ordering of effectiveness of such registration statement or document;
(b) The term "REGISTRABLE SECURITIES" means (i) the Ordinary Shares
issued pursuant to the Securities Purchase Agreement and (ii) any share
capital of the Company purchased, issued or issuable with respect to the
Ordinary Shares as a result of any share split, share dividend,
recapitalization, exchange or similar event or otherwise;
(c) The number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING"
shall be the number of Ordinary Shares outstanding which are Registrable
Securities;
(d) The term "HOLDER" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.12 of this Agreement;
(e) The term "FORM F-3" means such form under the Securities Act as in
effect on the date hereof or any successor form under the Securities Act;
(f) The term "SEC" means the Securities and Exchange Commission; and
(g) The term "INITIATING HOLDERS" means the holders of a majority of
the then issued and outstanding Registrable Securities.
Other capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Securities Purchase Agreement.
1.2 REQUEST FOR REGISTRATION
(a) If, at any time following the nine-month anniversary of, and until
the seven-year anniversary of, the date of Closing of the Securities
Purchase Agreement, the Company shall receive a written request from the
Initiating Holders that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities where
the anticipated aggregate offering price, net of underwriting discounts and
commissions, of Registrable Securities to be sold is at least $3,000,000,
then the Company shall, within 10 days of the receipt thereof, give written
notice of such request to all Holders and shall, subject to the limitations
of subsection 1.2(b), use its best efforts to effect as soon as
practicable, and in any event within one hundred and twenty (120) days of
the receipt of such request, the registration under the Securities Act of
all Registrable Securities which the Holders request to be registered
within 20 days of the mailing of such notice by the Company in accordance
with Section 3.4.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 1.2 and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected
by a majority in interest of the Initiating Holders and shall be reasonably
acceptable to the Company. In such event, the right of any Holder to
include his Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in subsection 1.5(e)) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other
provision of this Section 1.2, if the underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Initiating Holders shall so
advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated
among all Holders thereof, including the Initiating Holders, in proportion
(as nearly as practicable) to the amount of Registrable Securities of the
Company initially sought to be registered by each Holder; PROVIDED,
HOWEVER, that the number of shares of Registrable Securities to be included
in such underwriting shall not be reduced unless all other securities are
first entirely excluded from the underwriting.
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(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Chief Executive Officer of the Company stating
that in the good faith judgment of the Board of Directors of the Company,
it would be seriously detrimental to the Company and its stockholders for
such registration statement to be effective at such time, the Company shall
have the right to defer such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; PROVIDED, HOWEVER,
that the Company may not utilize this right more than once in any
twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two registrations pursuant to
this Section 1.2 and such registrations have been declared or ordered
effective and maintained effective for at least 120 days (or less if
the distribution contemplated in the registration statement has been
completed);
(ii) During the period ending (A) 12 months after the effective
date of a registration subject to Section 1.2 hereof or (B) 180 days
after the effective date of any other registration statement
pertaining to Ordinary Shares of the Company, or such shorter periods
if such shorter periods are acceptable to the underwriters of such
offering;
(iii) In any jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder; or
(iv) If such request does not cover shares representing a market
value at the time of such request equal to a minimum of $3,000,000.
1.3 COMPANY REGISTRATION. If (but without any obligation to do so) at any
time until the seven-year anniversary of the date of Closing of the Securities
Purchase Agreement the Company proposes to register (including for this purpose
a registration effected by the Company for shareholders other than the Holders)
any of its shares under the Securities Act in connection with the public
offering of such securities solely for cash (other than a registration statement
on Form S-4 or S-8 or any successor forms thereto or any registration statement
filed in connection with an exchange offer of securities solely to the Company's
existing security holders), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within 20 days after mailing of such notice by the Company in
accordance with Section 3.4, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.
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1.4 FORM F-3 REGISTRATION
If the Company shall receive at any time until the seven-year anniversary
of the date of Closing of the Securities Purchase Agreement a written request
from the Initiating Holders that the Company file a registration statement on
Form F-3 (or any successor form thereto) for a public offering of Registrable
Securities, the Company will:
(a) promptly give written notice of the proposed registration to all
other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder
or Holders joining in such request as are specified in a written request
given within 15 days after receipt of such written notice from the Company;
PROVIDED, HOWEVER, that the Company shall not be obligated to effect any
such registration, qualification or compliance, pursuant to this Section
1.4: (i) if Form F-3 is not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of
the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate
price to the public (net of any underwriters' discounts or commissions) of
less than $1,500,000; (iii) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form F-3
Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form F-3 registration statement
for a period of not more than 120 days after receipt of the request of the
Holder or Holders under this Section 1.4; PROVIDED, HOWEVER, that the
Company shall not utilize this right more than once in any twelve month
period; (iv) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two registrations on
Form F-3 for the Holders pursuant to this Section 1.4; (v) in any
particular jurisdiction in which the Company would be required to qualify
to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance; or (vi) during
the period ending 90 days after the effective date of any registration
statement pertaining to Ordinary Shares of the Company (or such shorter
period if such shorter period is acceptable to the underwriters of such
offering).
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 1.4 shall not be counted as demands for registration or
registrations effected pursuant to Sections 1.2 or 1.3, respectively.
1.5 OBLIGATIONS OF THE COMPANY
Whenever required under this Section 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective and keep such registration
statement effective for at least 120 days (or less if the distribution
contemplated in the registration statement has been completed);
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(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement;
(c) furnish without charge to each Holder, at least three business
days prior to the pertinent sale or sales by such Holder, such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
(d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; PROVIDED that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;
(e) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;
(f) immediately notify each Holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon learning
of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and, at the
request of the Holders, the Company shall prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading in the light of the circumstances
then existing;
(g) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or on the NASD automated
quotation system if similar securities issued by the Company are then
listed on the NASD automated quotation system, and if such similar
securities are designated as Nasdaq "national market system securities"
within the meaning of Rule 11Aa2-1 of the Securities and Exchange
Commission, to cause the Registered Securities to be so designated;
(h) provide the Holders, any underwriter participating in any
disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by the Holders or such underwriter, with
reasonable access to such financial and other records, pertinent corporate
documents and properties of the Company that are relevant to such
registration, and cause the Company's officers, directors, employees and
independent accountants to supply all such information to the Holders or
such underwriter, attorney, accountant or agent, subject to any
confidentiality requirements as may be requested by the Company;
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(i) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration;
(j) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit a Holder, if the Company determines in its sole discretion
that such Holder might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such
registration or comparable statement;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Ordinary Shares included in such registration
statement for sale in any jurisdiction, use its reasonable efforts promptly
to obtain the withdrawal of such order;
(m) make available (to such extent as shall be determined by the
Company in its sole discretion) its senior management to participate in any
"road shows" scheduled in connection with the offering of any Registrable
Securities pursuant to such registration (but subject in each case to the
obligations of such senior management to continue the Company's
operations), with all reasonable out-of-pocket costs and expenses incurred
by the Company in connection with such attendance and participation to be
paid by the Company; and
(n) furnish to the underwriters, if such securities are being sold
through underwriters, at the request of such underwriters, on the date that
such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, (i) an opinion,
dated such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the
underwriters, and (ii) a comfort letter dated such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
solely to the underwriters, which letter specifies the parties entitled to
rely thereon.
1.6 FURNISHING INFORMATION; OBLIGATIONS OF SELLING HOLDERS
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to Section 1.2, 1.3 or 1.4 that each selling Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of distribution of such securities
and such other information as shall be required to effect the registration of
its Registrable Securities. In addition, the Company shall not be obligated to
effect the registration of the Registrable Securities pursuant to Section 1.2,
1.3 or 1.4 unless each selling Holder shall (i) consent to comply with all
applicable provisions of the Securities Act and the Exchange Act including, but
not limited to, the prospectus delivery requirements of the Securities Act, and
other applicable securities laws and regulations, (ii) upon receipt of
telegraphic or written notice from the Company that it is required by law to
correct or update the registration statement or prospectus, refrain from
effecting sales of the Registrable Securities until the Company has completed
the necessary correction or updating, (iii) refrain from selling Registrable
Securities during the process of the registration until the registration
statement is effective and (iv) enter into lock up commitments as agreed between
the managing underwriter and the Company, not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any shares
of the Company (other than those Registrable Securities included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 120
days) from the effective date of such registration as may be requested by the
underwriters.
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Whenever any Holder is requesting registration of Registrable Securities
pursuant to this Agreement, such Holder shall, subject to compliance with this
Section 1.6, as soon as possible: (i) in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, and custody and power of attorney agreement, in usual and customary
form, with the managing underwriter of such offering, provided that the Company
shall also enter into and perform its obligations under such agreement; and (ii)
furnish to the Company, or its counsel, such information in writing as the
Company may reasonably request, as is required to be included in the
registration statement and supplements to such registration statement in
compliance with the provisions of the Securities Act.
1.7 EXPENSES OF REGISTRATION
(a) DEMAND REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations,
filings or qualifications pursuant to Section 1.2, including (without
limitation) all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, and the
reasonable out-of-pocket fees and disbursements of one counsel for the
selling Holders selected by a majority of the holders of Registrable
Securities to be registered shall be borne by the Company.
(b) COMPANY REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations,
filings or qualifications pursuant to Section 1.3, including (without
limitation) all registration, filing, and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, and the
reasonable out-of-pocket fees and disbursements of one counsel for the
selling Holders selected by a majority of the holders of Registrable
Securities to be registered shall be borne by the Company.
(c) REGISTRATION ON FORM F-3. All expenses other than underwriting
discounts and commissions incurred in connection with registrations,
filings or qualifications pursuant to Section 1.4, including (without
limitation) all registration, filing, and qualification fees, printers' and
accounting fees, fees and disbursements of one counsel for the selling
Holders selected by a majority of the holders of Registrable Securities to
be registered shall be borne by the Company.
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1.8 UNDERWRITING REQUIREMENTS
In connection with any offering involving an underwriting of shares of the
Company's share capital, the Company shall not be required under Section 1.3 to
include any of the Holders' securities in such underwriting unless they accept
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by stockholders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Holders according to
the total amount of securities entitled to be included therein owned by each
Holder or in such other proportions as shall mutually be agreed to by such
Holder).
1.9 DELAY OF REGISTRATION
No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this
Section 1.
1.10 INDEMNIFICATION
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, stockholders, employees, agents (including such
Holder's legal counsel and independent accountants), and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act, with respect to which registration, qualification or compliance has
been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, arising out of or based on (i)
any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any
such registration, qualification or compliance, 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, (ii) any violation
by the Company of any rule or regulation promulgated under the Securities
Act applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance; and will reimburse each such Holder, each of its officers,
directors and partners, stockholders, employees, agents and such Holder's
legal counsel and independent accountants, and each person controlling such
Holder, each such underwriter and each person who controls any such
underwriter, 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 (i) any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by such Holder or underwriter and stated to be
specifically for use therein, (ii) the failure of such Holder to provide to
the Company information necessary for the registration statement after
written request therefor by the Company, or (iii) the failure of such
Holder to effectively cause the prospectus delivery requirement of the
Securities Act to be satisfied, provided that the Company has complied with
its obligations under Section 1.5(c) of this Agreement.
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(b) Each Holder will, severally and not jointly, if Registrable
Securities held by such Holder are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify
the Company, each of its directors and officers, stockholders, employees
and agents (including its legal counsel and independent accountants), each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and
each other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of
any litigation, arising out of or based on (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, 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, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use therein, (ii) any violation by
the Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to action or inaction required of
the Company in connection with any such registration, qualification or
compliance, in each case to the extent, but only to the extent, that such
violation occurred solely as a result of the use, in such registration
statement, prospectus, offering circular or other document of written
information furnished to the Company by an instrument duly executed by such
Holder and stated to be specifically for use therein, or (iii) provided
that the Company has complied with its obligations under Section 1.5(c) of
this Agreement, any failure to effectively cause the prospectus delivery
requirement of the Securities Act to be satisfied; and each Holder will
reimburse the Company, such Holders, such directors, officers,
stockholders, employees and agents (including its legal counsel and
independent accountants), underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action for which such
Holder is obligated to provide indemnification pursuant to clauses (i),
(ii) or (iii); PROVIDED, HOWEVER, that the obligations of such Holders
hereunder shall be limited to an amount equal to the gross proceeds before
expenses and commissions to each such Holder of Registrable Securities sold
as contemplated herein.
(c) Each party entitled to indemnification under this Section 1.10
(the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has 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 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 be unreasonably withheld), and the Indemnified Party may
participate in such defense at such party's expense; and PROVIDED FURTHER
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, except to the extent, but only to the extent, that the
Indemnifying Party's ability to defend against such claim or litigation is
materially adversely affected as a result of such failure to give notice.
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 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.
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(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 1.10 is unavailable or insufficient to hold harmless an
Indemnified Party under such paragraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein,
then each Indemnifying Party shall in lieu of indemnifying such Indemnified
Party contribute to the amount paid or payable by such Indemnified Party as
a result of such losses, claims, damages, liabilities or actions in such
proportion as appropriate to reflect the relative fault of the Company, on
the one hand, and the Holders of Registrable Securities, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any notice under
paragraph (c) of this Section 1.10. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the
Company, on the one hand, or the Holders of Registrable Securities, on the
other hand, and to the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Holders of Registrable Securities agree that
it would not be just and equitable if contributions pursuant to this
paragraph were determined by pro rata allocation (even if all of the
Holders of Registrable Securities were treated as one entity for such
purpose) or by any other method of allocation which did not take account of
the equitable considerations referred to above in this paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or action in respect thereof, referred to
above in this paragraph, shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph, the Holders of Registrable Securities shall
not be required to contribute any amount in excess of the amount of the
total price at which the ordinary shares sold by each of them was offered
to the public. No person guilty of fraudulent misrepresentations (within
the meaning of Section 11(f) of the Securities Act), shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
(e) The indemnification of underwriters provided for in this Section
1.10 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters. In that event the
indemnification of the Holders of Registrable Securities in such
underwriting shall at the sellers' request be modified to conform to such
terms and conditions.
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1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act (or any successor provision then in effect)
and any other rule or regulation of the SEC that may at any time permit a Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form F-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144 (or any successor provision then in
effect), at all times after 90 days after the effective date of the first
registration statement filed by the Company for the offering of its
securities to the general public so long as the Company remains subject to
the periodic reporting requirements under Sections 13 or 15(d) of the
Exchange Act;
(b) take such action, including the voluntary registration of its
ordinary shares under Section 12 of the Exchange Act, as is necessary to
enable the Holders to utilize Form F-3 for the sale of their Registrable
Securities, such action to be taken as soon as practicable after the end of
the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is
declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144 (or
any successor provision then in effect) (at any time after 90 days after
the effective date of the first registration statement filed by the
Company), the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form F-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such
form.
1.12 ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities under
Sections 1.2, 1.3 and 1.4 may be assigned by a Holder to a transferee or
assignee of such Registrable Securities with respect to the Registrable
Securities being assigned or transferred; PROVIDED that (a) such transfer may
otherwise be effected in accordance with applicable securities laws and
restrictions on transfer agreed upon by the Holder and the Company, (b) notice
of such assignment is given to the Company within a reasonable time (not to
exceed 20 days) after such assignment with the name and address of such assignee
and the securities with respect to which such registration rights are being
assigned, (c) such transferee or assignee (i) is a wholly-owned subsidiary or
constituent partner, retired partner, member, retired member or shareholder of
such Holder, or (ii) is an `affiliate' (as that term is defined in Rule 405
promulgated by the Commission under the Securities Act of 1933) of the Holder,
including, without limitation, where a Holder is a limited partnership, an
affiliated limited partnership managed by the same management company or
managing general partner of such Holder or an entity which controls, is
controlled by, or is under common control with, such management company or
managing general partner, or (iii) is a beneficiary of the Holder, where such
Holder is a trust or (iv) is a spouse, ancestor or descendant of such Holder, or
(v) is a trust for the benefit of such Holder or any spouse, ancestor or
descendant of such Holder, or (vi) acquires from such Holder or Holders at least
300,000 Registrable Securities (as appropriately adjusted for share splits,
share combination and the like) in a simultaneous transaction or transactions
and (d) such transferee or assignee agrees to be bound by all provisions of this
Agreement by executing a counterpart signature page hereto (which shall not be
deemed an amendment hereto). Any entity qualifying as a transferee or an
assignee pursuant to subsections (c)(i) to (iii) above is referred to herein as
a "PERMITTED TRANSFEREE").
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1.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS
From and after the date of this Agreement, the Company shall not, without
the prior written consent of the holders of a majority of the Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
1.2 or Section 1.4 hereof, unless under the terms of such agreement, such holder
or prospective holder may include such securities in any such registration only
to the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holders which is included or (b) to make a
demand registration which could result in such registration statement being
declared effective within 180 days of the effective date of any registration
effected pursuant to Section 1.2.
1.14 REGISTRABLE SECURITIES.
For the purposes of this Agreement, Registrable Securities will cease to be
Registrable Securities when (i) a registration statement covering such
Registrable Securities has been declared effective under the Securities Act by
the SEC and such Registrable Securities have been disposed of pursuant to such
effective registration statement, (ii) the entire amount of the Registrable
Securities may be sold in a single sale, in the opinion of counsel reasonably
satisfactory to the Company, without any limitation as to volume pursuant to SEC
Rule 144 (or any successor provision then in effect), or (iii) the Registrable
Securities are proposed to be sold or distributed by a person not entitled to
the registration rights granted by this Agreement.
ARTICLE 2
MISCELLANEOUS
2.1 ENTIRE AGREEMENT
This Agreement constitutes the full and entire understanding and agreement
among the parties with regard to the subjects hereof and thereof.
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2.2 SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties. None
of the provisions of this Agreement may be assigned by any Shareholder other
than in connection with a due transfer of the relevant shares of the Company by
such Shareholder, provided that any right or limitation provided for the express
benefit of a specifically named Shareholder shall not be assignable by such
party other than to a Permitted Transferee of such Shareholder. The Company
shall not permit the transfer of any Registrable Securities on its books or
issue a new certificate representing any Registrable Securities unless and until
the person to whom such security is to be transferred shall have executed a
counterpart signature page hereto, pursuant to which such person becomes a party
to this Agreement and agrees to be bound by all the provisions hereof as if such
person were a Holder. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
2.3 AMENDMENTS AND WAIVERS
Without derogating from Section 1.13 hereof, any term hereof may be amended
or waived only with the written consent of the Company and the parties hereto
who are the owners of record of at least 75% of the Registrable Securities;
PROVIDED that (i) should such waiver or amendment adversely affect (directly or
indirectly) the rights or privileges granted hereunder to the particular Holder
or group of Holders, in a manner which discriminates such Holder/s against other
Holders (a "DISCRIMINATED CLASS"), such waiver or amendment shall be subject to
the written approval of the Holder/s who are the owners of record of a majority
of the outstanding shares of such Discriminated Class, and (ii) any right or
limitation provided for the express benefit of a specifically named party may
not be amended or waived without the consent of such party. Any amendment or
waiver effected in accordance with this Section 2.3 shall be binding upon the
Company, the Shareholders, and each of their respective successors and assigns.
2.4 NOTICES
'BUSINESS DAY' means a day on which the banks are open for business in the
country of receipt of any notice.
(a) All notices and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been
duly given:
(i) in the case of hand delivery to the address shown below, on
the next Business Day after delivery;
(ii) in the case of delivery by an internationally recognized
overnight courier to the address set forth below, freight prepaid, on
the next Business Day after delivery;
(iii) in the case of a notice sent by facsimile transmission to
the number, and addressed as, set forth below, on the next Business
Day after delivery, if facsimile transmission is confirmed;
(iv) in the case of a notice sent by email to the email address
set forth below, on the date of written acknowledgment of receipt of
such e-mail by the addressee.
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(b) In the event that notices are given pursuant to one of the methods
listed in sub-clauses (a)(i) to (iii) above, a copy of the notice should
also be sent by email, if one is given in the contact details below. In the
event that notices are given pursuant to the method listed in sub-clause
(a)(iv) above, a copy of the notice will also be sent by an internationally
recognized overnight courier to the address set forth below, freight
prepaid.
(c) All notices and other communications shall be addressed to the
address set forth below in the signature page hereof.
(d) A party may change or supplement the contact details for service
of any notice pursuant to this Agreement, or designate additional
addresses, facsimile numbers and email addresses for the purposes of this
Section 2.4 by giving the other party written notice of the new contact
details in the manner set forth above.
2.5 SEVERABILITY
If for any reason any provision of this Agreement shall be determined to be
invalid or inoperative, the validity and effect of the other provisions hereof
shall not be affected thereby; PROVIDED that no such severability shall be
effective if it causes a material detriment to any party.
2.6 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Israel without regard to the conflicts of law
principals of any jurisdiction.
2.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
may be executed by fewer than all of the parties, each of which shall be
enforceable against the parties actually executing such parts, and all of which
together shall constitute one instrument.
2.8 TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
2.9 AUTHORITY
Each party represents and warrants that such party has full power to
execute, deliver and perform this Agreement, which has been duly executed and
delivered by and evidences the valid and binding obligation of such party
enforceable in accordance with terms.
2.10 SPECIFIC PERFORMANCE
The parties hereto agree that any violation or threatened violation of this
Agreement will cause irreparable injury to the parties thus entitling the party
against whom a breach occurred or was threatened to obtain injunctive relief, in
addition to all legal remedies.
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2.11 AGGREGATION OF SHARES
All Ordinary Shares held or acquired by affiliated entities or persons,
including for the avoidance of doubt, Permitted Transferees of each other, shall
be aggregated together for the purpose of determining the availability of any
rights under this Agreement; and all Ordinary shares held or acquired by
affiliated entities or persons, including for the avoidance of doubt, Permitted
Transferees of each other, shall be aggregated together for the purpose of
determining the percentage holdings of such entities where applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned parties have executed this Registration
Rights Agreement as of November 24, 2005.
VOCALTEC COMMUNICATIONS LTD.
By:__________________
Name:
Title:
___________________________________
(Print or Type Name of Shareholder/Company]
[SIGN HERE]:
By:_________________________________
(Title, if applicable)____________
Print or Type Address of Shareholder/Company:
____________________________________
____________________________________
Fax No.:________________________
Email:
