Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is made and entered
into effective as of the ________ day of _____________________, 2000 by and
between APPLIED VOICE RECOGNITION, INC., a Delaware corporation doing business
as x-XXXX.xxx (the "Company") and __________________________________ (the
"Investor").
R E C I T A L S:
----------------
WHEREAS, the Investor has purchased certain shares (herein, the "Subject
Stock") of common stock, $0.001 par value per share, of the Company (the "Common
Stock") pursuant to the terms of that certain Subscription Agreement between the
Investor and the Company of even date herewith (the "Subscription Agreement");
and
WHEREAS, as a condition to execution of the Subscription Agreement and
purchase of the Common Stock described therein, the Investor has required
certain registration rights to be granted by the Company, all as described
herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the Subscription Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is acknowledged and agreed, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Registration Rights.
-------------------
a. The Company covenants and agrees that it will cause to be filed
pursuant to Rule 415 of The Securities Act of 1933, as amended (the "Securities
Act"), a Shelf Registration Statement (the "Shelf Registration Statement") as to
the shares of Subject Stock along with certain other shares, naming such holders
who wish to be named therein as selling stockholders. The Company will use its
commercially reasonable efforts to see that the Shelf Registration Statement is
declared effective on or before December 31, 2000 and that it is kept
continuously effective until two years thereafter; provided, however, that the
Company may voluntarily suspend the effectiveness of such Shelf Registration
Statement for a limited time, which in no event shall be longer than 120 days,
if the Company has been advised by counsel or underwriters to the Company that
the offering of the shares of the Subject Stock pursuant to the Shelf
Registration Statement would adversely affect, or would be improper in view of
(or improper without disclosure in a prospectus) a proposed financing, a
reorganization, recapitalization, merger, consolidation, or similar transaction
involving the Company, in which case the Company shall be required to keep such
Shelf Registration Statement effective for an additional period of time beyond
two years following the date of the final closing of the above described
transaction equal to the number of days the effectiveness thereof is suspended
pursuant to this proviso. If any event occurs that would cause the Shelf
Registration Statement to contain a material misstatement or omission or not to
be effective and usable during the period that such Shelf Registration Statement
is required to be effective and usable, the Company shall promptly file an
-1-
amendment to the Shelf Registration Statement and use its best efforts to cause
such amendment to be declared effective as soon as practicable thereafter. The
Investor shall furnish to the Company such information regarding its holdings
and the proposed manner of distribution thereof as the Company may reasonably
request and as shall be required in connection with the Shelf Registration
Statement. Notwithstanding any provision contained herein to the contrary, the
Company's obligation to include, or continue to include, shares of Common Stock
in the Shelf Registration Statement under this Section 1 shall terminate to the
extent such shares are eligible for resale under Rule 144(k) promulgated under
the Securities Act.
b. All costs and expenses of any registration and qualification
pursuant to this Section 1 shall be borne by the Company. Such costs and expense
shall include, without limitation, the fees and expenses of counsel for the
Company and of its accountants, all other costs, fees and expenses of the
Company incident to the preparation, printing and filing under the Securities
Act of the registration statement and all amendments on supplements thereto, the
cost of furnishing copies of each preliminary prospectus, each final prospectus
and each amendment or supplement thereto to underwriters, dealers and other
purchases of the Common Stock and the costs and expenses (including fees and
disbursements of counsel) incurred in connection with the qualification of the
Common Stock under the securities laws of various jurisdictions. Notwithstanding
the foregoing, the Company shall not be obligated to bear any fees, or expenses
for counsel or other advisors to the Investor or any underwriting fees,
discounts or commissions or brokerage fees allocable to the registration or
qualification of the Subject Stock.
c. In the case of any registration or qualification pursuant to this
Section 1, the Company will keep the Investor advised in writing as to the
initiation of proceedings for such registration and qualification and as to the
completion thereof, and will advise the Investor, upon request, of the progress
of such proceeding.
d. At the Company's expense, the Company will keep each registration
and qualification under this Section 1 effective (and in compliance with the
Securities Act) by such action as may be necessary or appropriate for a period
of two years, including, without limitation, the filing of post-effective
amendments and supplements to any registration statement or prospectus necessary
to keep the registration statement current and the further qualification under
any applicable state securities laws to permit such sale or distribution, all as
reasonably requested by the Investor. The Company will immediately notify the
Investor, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, 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 any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.
e. In connection with any registration of the Subject Stock under
this Section 1, the Company will provide a transfer agent and registrar for the
Subject Stock not later than the effective date of such registration statement.
f. In connection with any registration of the Subject Stock under
this Section 1, the Company will, if requested by the underwriters for any
Common Stock included in such
-2-
registration, enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, provisions relating to indemnification and contribution. The
Investor shall be party to any such underwriting agreement, and the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the Investor.
g. In connection with the preparation and filing of each
registration statement registering the Subject Stock under this Section 1, the
Company will give the Investor and its underwriter, if any, and their respective
counsel and accountants (at their sole expense), the opportunity to participate
in the preparation of such registration statement, each prospectus included
therein or filed with the Securities and Exchange Commission (the "Commission"),
and each amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss the
business of the Company with its officers, its counsel and the independent
public accountants who have certified its financial statements, as shall be
necessary, in the opinion of the Investor or such underwriters or their
respective counsel, in order to conduct a reasonable and diligent investigation
within the meaning of the Securities Act. Without limiting the foregoing, each
registration statement, prospectus, amendment, supplement or any other document
filed with respect to a registration under this Section 1 shall be subject to a
reasonable review and comment period by the Investor registering the Subject
Stock in such registration and by its counsel.
h. The Company will, at the expense of the Company, furnish to the
Investor such number of registration statements, prospectuses, offering
circulars and other documents incident to any registration or qualification
referred to in this Section 1 as the Investor from time to time may reasonably
request.
i. (1) The Company agrees to indemnify, to the extent permitted by
law, the Investor and its officers, directors, stockholders, employees, agents
and representatives, and any other person deemed to control the Investor within
the meaning of the Securities Act against all losses, claims, damages,
liabilities and expenses caused by (a) any violation or alleged violation by the
Company of the Securities Act, the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or any other federal or state securities law, rule or
regulation applicable to the Company or (b) any untrue statement of material
fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to the Company by such Investor expressly
for use therein or by such Investor's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto.
(2) In connection with any registration statement in which the
Investor is participating, such Investor will furnish to the Company in writing
such information as the Company reasonably requests for use in connection with
any such registration statement or prospectus and, to the extent permitted by
law, will indemnify the Company, its directors,
-3-
officers, stockholders, employees, agents and representatives, and any other
person deemed to control the Company against any losses, claims, damages,
liabilities and expenses resulting from any untrue statement or material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information so furnished in writing by such Investor. In
connection with an underwritten offering, the Investor will indemnify the
underwriters, the officers and directors and each person who controls such
underwriters to the same extent as provided above with respect to the
indemnification of the Company.
(3) Any party entitled to indemnification hereunder will (a) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (b) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(4) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities. If for any reason
the foregoing indemnification is unavailable to any party or insufficient to
hold it harmless as and to the extent contemplated by the preceding paragraphs,
then the Company or the Investor, as the case may be, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Investor or any other
applicable indemnified party, as the case may be, on the other hand, and also
the relative fault of the Company and the Investor or other applicable
indemnified party, as the case may be, as well as any other relevant equitable
considerations.
j. The Company agrees that if it shall become eligible to list its shares
of the Common Stock on a national securities exchange or on an automated
national quotation system, the Company shall use its best efforts to cause its
Common Stock to be so listed. If the Company shall list any shares of Common
Stock on any securities exchange or on an automated national quotation system,
it will, at its expense, list thereon, maintain, and increase when necessary
such listing of, all shares of Common Stock so long as any shares of Common
Stock shall be so listed.
k. With a view to making available to the Investor the benefits of Rule
144 promulgated under the Securities Act, the Company agrees to maintain
registration of its
-4-
Common Stock under Section 12(g) or 15(d) of the Exchange Act and to file with
the Commission in a timely manner all reports and other documents required to be
filed by an issuer of securities registered under the Exchange Act so as to
maintain the availability of Rule 144. When Rule 144(k) is being complied with,
the Company shall deliver securities not bearing any legend restricting transfer
for such securities, as may be requested from time to time by the Investor upon
delivery to the Company of a customary shareholder representation letter in a
form reasonably acceptable to the Company.
l. If the Shelf Registration Statement is not declared effective by
December 31, 2000, the Company shall pay to the Investor each month thereafter
until such Shelf Registration Statement is declared effective or the Subject
Stock is eligible to be sold pursuant to Rule 144(k) promulgated under the
Securities Act, an amount equal to one and one quarter percent (1-1/4%) times
the basis in each such share, times the number of shares of Subject Stock
remaining unsold (the "Penalty Payments"). The Penalty Payments shall be made to
the Investor on or before the tenth day of each month for the prior month and
shall be pro rated for any period of less than 30 days. The Investor agrees that
the Penalty Payments shall be the Investor's sole and exclusive remedy against
the Company for the Company's failure to cause the Shelf Registration Statement
to be declared effective hereunder.
2. Miscellaneous.
-------------
a. No Inconsistent or Senior Agreements. The Company will not
------------------------------------
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Investor in this Agreement. The
Company will not hereafter enter into any agreement with respect to its
securities which confers upon any party any registration rights that would pre-
empt the registration rights granted pursuant hereto.
b. Remedies. Each Holder, in addition to being entitled to
--------
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive (to the extent permitted by law) the defense in any
action for specific performance that a remedy of law would be adequate.
c. Amendments and Waivers. The provisions of this Agreement may
----------------------
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of the holders of at least a majority of the Common Stock then
outstanding affected by such amendment, modification, supplement, waiver or
departure.
d. Successors and Assigns. Except as otherwise expressly
----------------------
provided herein, 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 hereto. Nothing in this Agreement, express or implied, is intended to
confer upon any person 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.
-5-
e. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of Texas applicable to
contracts made and to be performed wholly within that state, without regard to
the conflict of law rules thereof.
f. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
g. Headings. The headings in this Agreement are used for convenience
--------
of reference only and are not to be considered in construing or interpreting
this Agreement.
h. Notices. Any notice required or permitted under this Agreement
-------
shall be given in writing and shall be delivered in person or by telecopy or by
overnight courier guaranteeing no later than second business day delivery,
directed to (i) the Company at the address set forth below its signature hereof
or (ii) the Investor at the address set forth below its signature hereof. Any
party may change its address for notice by giving ten (10) days advance written
notice to the other parties. Every notice or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, or on the date actually received, if sent by telecopy or overnight
courier service, with receipt acknowledged.
i. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Investor
shall be enforceable to the fullest extent permitted by law.
j. Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or referred to herein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
k. Recitals. The recitals are hereby incorporated in the Agreement
--------
as if fully set forth herein.
l. Attorneys Fees. If any action is necessary to enforce or
--------------
interpret the terms of this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs, in addition to any other relief to which
he is or may be entitled. This provision shall be construed as applicable to the
entire agreement.
m. Arbitration. All disputes, claims, and/or requests for specific
-----------
contractual performance, or other equitable relief, or damages or any other
matters in question between the parties arising out of this Agreement shall be
submitted for arbitration, provided that the parties
-6-
have first made a good faith effort to resolve such matters together. Demand
shall be made to the American Arbitration Association ("AAA") and shall be
conducted in Houston, Texas by a panel of three (3) arbitrators. The Investor
and the Company shall each choose one (1) panel member from a panel of person
having experience with and knowledge of the purchase and sale of securities. The
third member shall be an independent party, chosen by the first two members. At
least one member of the panel must have a legal background. Arbitration shall be
in accordance with the commercial rules of the AAA. The Award of the Arbitrators
shall be final and judgement may be entered upon it in any court having
jurisdiction thereof, and the prevailing party shall be entitled to costs and
reasonable attorneys' fees arising out of Arbitration.
EXECUTED as of the date first written above.
Company: APPLIED VOICE RECOGNITION, INC.
d/b/a x-XXXX.xxx
By: ___________________________
Name: _________________________
Title: ________________________
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
Investor: _______________________________
Name Printed: _________________
Address:
_______________________________
_______________________________
-7-
