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EXHIBIT 10.20
REGISTRATION AND FIRST REFUSAL RIGHTS AGREEMENT
This Registration and First Refusal Rights Agreement (the "Agreement")
dated as of December 22, 1992 is entered into by and among Voicetek Corporation,
a Massachusetts corporation (the "Company"), and the holders of shares of the
Company's Senior Preferred Stock, $.01 par value per share (the "Senior
Preferred Shares"), Junior Preferred Stock -- Series 1, $.01 par value per share
(the "Series 1 Junior Preferred Shares"), and Junior Preferred Stock -- Series
2, $.01 par value per share (the "Series 2 Junior Preferred Shares")
(collectively, the Senior Preferred Shares, the Series 1 Junior Preferred Shares
and the Series 2 Junior Preferred Shares are referred to as the "Preferred
Shares"), listed on the signature pages hereto.
WITNESSETH:
WHEREAS, the Company and the purchasers of the Company's Senior
Preferred Shares (the "Senior Preferred Shareholders") are parties to a certain
Senior Preferred Stock Purchase Agreement with the Company dated as of December
22, 1992 (the "Senior Purchase Agreement");
WHEREAS, the Company and the purchasers of the Company's Series 1
Junior Preferred Shares and the Company's Series 2 Junior Preferred Shares
(collectively the "Junior Preferred Shareholders") are parties to a certain
Junior Preferred Stock Purchase Agreement with the Company dated as of December
22, 1992 (the "Junior Purchase Agreement");
WHEREAS, each of the parties hereto desires to set forth in a single
agreement all of the registration and first refusal rights of the Senior
Preferred Shareholders and Junior Preferred Shareholders (collectively, the
"Preferred Shareholders") with respect to all of the Preferred Shares acquired
by the Preferred Shareholders pursuant to the Senior Purchase Agreement and the
Junior Purchase Agreement (collectively, the "Purchase Agreements").
NOW THEREFORE, in consideration of the execution of the Senior Purchase
Agreement and the Junior Purchase Agreement, the mutual promises, covenants and
conditions hereinafter set forth and other good and valuable consideration, the
parties hereto agree as follows:
1. Certain Definitions. Any capitalized terms not defined herein shall
have the meaning assigned to them in the Purchase Agreements. As used in this
Agreement, the following terms shall have the following respective meanings:
"Commission" shall mean the securities and Exchange
commission, or any other federal agency at the time administering the
Securities Act.
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"Conversion Shares" shall mean shares of Common Stock issued
upon conversion of any of the Preferred Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Restricted Securities" shall mean the Preferred Shares and
the Conversion Shares, but excluding in each case securities that have
been (a) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance
with such registration statement or (b) publicly sold pursuant to Rule
144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
2. Restrictive Legend. Each certificate representing Preferred Shares
or Restricted Securities shall, except as otherwise provided in this Section 2
or in Section 3, be stamped or otherwise imprinted with a legend substantially
in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS."
3. Notice of Proposed Transfer. Prior to any proposed transfer of any Restricted
Securities (other than under the circumstances described in sections 4, 5 or 6),
the holder thereof shall give written notice to the Company of its intention to
effect such transfer. Each such notice shall describe the manner of the proposed
transfer and, if requested by the Company, shall be accompanied by an opinion of
counsel satisfactory to the Company to the effect that the proposed transfer may
be effected without registration under the Securities Act, whereupon the holder
of such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of its notice; provided, however, that
no such opinion of counsel shall be required for a transfer (a) by a partnership
to one or more of its partners or
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to another partnership with which such transferring partnership has a general
partner in common, (b) by a corporation to one or more of its officers or
employees or to another corporation that controls, is controlled by, or is under
common control with such transferring corporation, (c) by an individual to (i)
any member of his family or to any trust for the benefit of such family member
or the holder, in each case by way of gift or (ii) by will or the laws of
descent and distribution or (d) to any other individual or entity (other than
the Company) that is a party to this Agreement at the time of such transfer.
Each certificate for Restricted Securities transferred as above provided shall
bear the legend set forth in Section 2 unless (i) such transfer is in accordance
with the provisions of Rule 144 under the Securities Act (or any other rule
permitting public sale without registration under the Securities Act) or (ii)
the opinion of counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to transfer such securities in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.
4. Required Registrations.
(a) At any time on up to three occasions after the earlier of (i) six
months after any registration statement covering a public offering of equity
securities of the Company under the Securities Act shall have become effective
and (ii) December 31, 1993, the holders of Restricted Securities constituting at
least forty percent (40%) of the total shares of Restricted Securities then
outstanding may request the Company to register under the Securities Act all or
any portion of the Restricted Securities held by such requesting holder or
holders for sale in the manner specified in such notice, provided that the
Restricted Securities for which registration has been requested shall constitute
at least ten percent (10%) of the total Restricted Securities originally issued
if such holder or holders shall request the registration of less than all of the
Restricted Securities then held by such holder or holders (or any lesser
percentage if the reasonably anticipated aggregate price to the public of such
public offering would exceed $2,000,000). The only securities which the Company
shall be required to register pursuant this Agreement shall be shares of Common
Stock. In any underwritten public offering contemplated by this Agreement, the
holders of Preferred Shares shall be entitled to sell such Preferred Shares to
the underwriters for conversion and sale (in such public offering) of the shares
of Common Stock issued upon conversion or exercise thereof and such Preferred
Shares so sold shall be deemed to have been "registered" for purposes of this
Agreement. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 4 within 120 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Securities shall
have been entitled to join pursuant to Sections 5 or 6 and in which there shall
have been effectively registered all Restricted Securities as to which
registration shall have been requested by the holders thereof. If the Company
determines to include shares to be sold by it in any registration request
pursuant to this Section 4, such registration shall not decrease the number of
"demand" registrations available under this Section 4 if the holders of
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Restricted Securities are unable to include in any such registration statement
all of the Restricted Securities requested for inclusion in such registration
statement.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted securities from whom notice
has not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of Restricted
securities specified in such notice (and in all notices received by the Company
from other holders within thirty days after the giving of such notice by the
Company). If such method of disposition shall be an underwritten public offering
of Common Stock, the number of Restricted Securities to be included in such an
underwriting may be reduced (pro rata among the requesting holders based upon
the number of Restricted Securities owned by such holders) if and to the extent
that the lead managing underwriter shall be of the opinion that such inclusion
would adversely affect the marketing of the securities to be sold therein,
provided, however, that such number of Restricted Securities shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company or requesting holders of Restricted
Securities, and provided, further, however, that in no event may less than
fifteen percent (15%) of the total number of shares of Common Stock to be
included in such underwriting be made available for Restricted Securities. If
such method of disposition shall be an underwritten public offering, the holders
of a majority of the Restricted Securities to be sold in such offering under
this Section 4 may designate the managing underwriter or underwriters of such
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed. The Company shall be obligated to register
Restricted Securities pursuant to this Section 4 on three occasions only,
provided, however, that such obligations shall be deemed satisfied on a
particular occasion only when a registration statement covering all Restricted
Securities specified in notices received as aforesaid, for sale in accordance
with the method of disposition specified by the requesting holders, shall have
become effective and, if such method of disposition is a firm commitment
underwritten public offering, all such shares shall have been sold pursuant
thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the lead managing underwriter (if such method of disposition
shall be an underwritten public offering), such inclusion would adversely affect
the marketing of the Restricted Securities to be sold. Except for registration
statements on Form X-0, X-0 or any successor thereto, and unless the Company has
previously given the notice referred to in Section 5, the Company will not file
with the Commission any other registration statement with respect to Common
Stock, whether for its own account or that of other stockholders, from the date
of receipt of a notice from requesting holders pursuant to this Section 4 until
the completion of the period of distribution of the registration contemplated
thereby.
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5. Incidental Registration. If the Company at any time (other than
pursuant to Section 4) proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Forms S-4 and S-8 or another form not available for registering
the Restricted Securities for sale to the public), then each such time it will
give written notice to all holders of outstanding Restricted Securities of its
intention so to do. Upon the written request of any such holder, received by the
Company within thirty days after the giving of any such notice by the Company,
to register any of its Restricted Securities (which request shall state the
intended method of disposition thereof), the Company will use its best efforts
to cause the Restricted securities as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder (in accordance with its
written request) of such Restricted Securities so registered. In the event that
any registration pursuant to this Section 5 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of Restricted
Securities to be included in such an underwriting may be reduced (pro rata among
the requesting holders based upon the proportion which the number of Restricted
Securities held by each holder bears to the total number of Restricted
Securities outstanding) if and to the extent that the managing underwriter shall
be of the opinion that such inclusion would adversely affect the marketing of
the securities to be sold by the Company therein, provided, however, that such
number of Restricted Securities shall not be reduced if any securities are to be
included in such underwriting for the account of any person other than the
Company or requesting holders of Restricted securities, and provided, further,
however, that in no event may less than fifteen percent (15%) of the total
number of shares to be included in such underwriting be made available for
Restricted Securities. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 5 without
thereby incurring any liability, other than for the payment of the Registration
Expenses referred to in Section 8.
6. Registration on Form S-3. If at any time (i) a holder or holders of
Restricted Securities request that the Company file a registration statement on
Form S-3 or any successor thereto for a public offering of all or any portion of
the Restricted Securities held by such requesting holder or holders, the
reasonably anticipated aggregate price to the public of which would exceed
$500,000, and (ii) the Company is a registrant entitled to use Form S-3 or any
successor thereto to register such shares, then the Company shall use its best
efforts to register under the Securities Act on Form S-3 or any successor
thereto, for public sale in accordance with the method of disposition specified
in such notice, the number of Restricted Securities specified in such notice.
Whenever the Company is required by this Section 6 to use its best efforts to
effect the registration of Restricted Securities, each of the procedures and
requirements of Section 4 (including the requirement that the Company notify all
holders of Restricted Securities from whom notice has not been received and
provide them with the opportunity to participate in the offering shall apply to
such registration, provided, however, that there shall be no limitation on the
number of registrations on Form S-3 which may be requested and obtained under
this Section 6 (except that the Company shall not be required to
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file more than two such registrations in any one calendar year), and provided,
further, however, that the requirements contained in the first sentence of
Section 4(a) shall not apply to any registration on Form S-3 which may be
requested and obtained under this Section 6.
7. Registration Procedures. If and whenever the Company is required by
the provisions of Section 4, 5 or 6 to use its best effort's to effect the
registration of any Restricted Securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
lead managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted securities
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Securities covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted
Securities covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the sellers of Restricted Securities or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is bus not so qualified or to consent
to general service of process in any such jurisdiction;
(e) use its best efforts to list or include the Restricted Securities
covered by such registration statement with any securities exchange or
over-the-counter market system on which Common Stock is then listed or traded,
including the National Association of Securities Dealers Automated Quotation
(NASDAQ) system;
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(f) immediately notify each seller of Restricted Securities and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained 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 in order to make the statements
therein not misleading in the light of the circumstances under which they were
made;
(g) if the offering is underwritten and at the request of any seller of
Restricted Securities, use its best efforts to furnish on the date that
Restricted Securities is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters and to such
seller, stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters or by
such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such
letter), with respect to such registration as such underwriters reasonably may
request as contemplated by Statement on Auditing Standards No. 49 of the
Auditing Standards Board or any successor statement; and
(h) make available for inspection by each seller of Restricted
Securities, any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
For purposes of Sections 4(c), 7(a) and 7(b), the period of
distribution of Restricted Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted securities in any other registration shall be deemed to
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extend until the earlier of the sale of all Restricted Securities covered
thereby and ninety days after the effective date of the registration statement.
In connection with each registration hereunder, the sellers of
Restricted Securities will furnish to the Company in writing such information
with respect to themselves and the proposed distribution by them as reasonably
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
In connection with each registration pursuant to Section 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
8. Expenses. All expenses incurred by the Company in complying with
Sections 4, 5 and 6, including, without limitation, all registration and filing
fees, fees and disbursements of counsel and independent public accountants for
the Company, fees and expenses (including counsel fees) incurred in connection
with complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, listing or any other fees of exchanges or over-the-counter
market systems, costs of insurance, printing costs and expenses in connection
with the preparation of the registration statement and prospectus, and fees and
disbursements of one counsel for the sellers of Restricted Securities, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Restricted Securities are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Section 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Section 4, 5 or 6 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree. The Company shall pay
all expenses of the holders of Restricted securities in connection with any
registration of Restricted securities initiated pursuant to Sections 4, 5 or 6
hereof which is withdrawn, delayed or abandoned at the request of the Company.
9. Indemnification and Contribution. (a) In the event of a registration
of any of the Restricted Securities under the Securities Act pursuant to
Sections 4, 5 or 6, the Company will and hereby does indemnify and hold harmless
each seller of such Restricted Securities thereunder, each underwriter of such
Restricted Securities thereunder and each other person, if any, who controls
such seller or-underwriter within the meaning of the Securities Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such
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seller, underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Securities was registered
under the Securities Act pursuant to Section 4, 5 or 6, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the 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 such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
the Company will not be liable in any such case if and to the extent that any'
such loss, claim, damage or liability arises out of or is based solely upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person (or its or their authorized officers,
employees, directors or agents) in writing specifically for use in such
registration statement or prospectus and provided further that such indemnity
with respect to any registration statement shall not inure to the benefit of any
party from whom the person asserting any such loss, claim, damage or liability
purchased the Restricted Securities which is the subject thereof if such person
did not receive a copy of the registration statement (or the registration
statement as supplemented) at or prior to the confirmation of the sale of such
Restricted Securities to such person in any case where such delivery is required
by the Securities Act and the untrue statement or omission of a material fact
contained in such registration statement was corrected in the registration
statement (or the registration statement as supplemented).
(b) In the event of a registration of any of the Restricted Securities
under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Securities thereunder, severally and not jointly, will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based solely upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Restricted Securities was registered under the Securities Act pursuant to
Sections 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
solely upon the 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 the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or
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action, provided, however, that seller will be liable hereunder-in any such case
if and only to the extent that any such loss, claim, damage or liability arises
out of or is based solely upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
information pertaining to such seller, as furnished in writing to the Company by
such seller (or its authorized officers, directors, employees or agents)
specifically for use in such registration statement or prospectus, (ii) such
indemnity with respect to any registration statement shall not inure to the
benefit of any party from whom the person asserting any such loss, claim, damage
or liability purchased the Restricted Securities which is the subject thereof if
such person did not receive a copy of the registration statement (or the
registration statement as supplemented) at or prior to the confirmation of the
sale of such Restricted Securities to such person in any case where such
delivery is required by the Securities Act and the untrue statement or omission
of a material fact contained in such registration statement was corrected in the
registration statement (or the registration statement as supplemented), and
(iii) the liability of each seller hereunder shall be limited to the proportion
of any such loss, claim, damage, liability or expense which is equal to the
proportion that the public offering price of the shares sold by such seller'
under such registration statement bears to the total public offering price of
all securities sold thereunder, but not in any event to exceed the proceeds
received by such seller from the sale of Restricted Securities covered by such
registration statement. Not in limitation of the foregoing, it is hereby
understood And agreed that the indemnification obligations of any seller
hereunder pursuant to any underwriting agreement entered into in connection
herewith shall be limited to the obligations contained in this subparagraph (b).
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish to assume and undertake the defense thereof with counsel satisfactory
to such indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 9 for any legal expenses subsequently incurred by such
indemnified party-in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party
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shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Securities exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
9, then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Securities offered by the registration
statement bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Securities offered by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. Changes in Common Stock or Preferred Stock. If, and as often as,
there is any such change in the Common Stock, the Senior Preferred Shares or the
Junior Preferred Shares by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
,recapitalization, or by any other means, appropriate adjustment shall be made
in the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock, the Senior Preferred Shares or the
Junior Preferred Shares as so changed.
11. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, at all
times after ninety days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
- 11 -
12
(b) use its best efforts to 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 each holder of Restricted Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Restricted Securities without
registration.
12. Right of First Refusal.
12.1. General. Subject to the provisions of Section 12.5, the Company
shall not issue, sell or exchange, agree or obligate itself to issue, sell or
exchange, or reserve or set aside for issuance, sale or exchange (a) any shares
of Common Stock, (b) any other equity securities of the Company, including
Preferred Shares, (c) any debt securities of the Company (other than a bank line
of credit with no equity feature), including any debt securities that by its
terms are convertible into or exchangeable for any equity securities of the
Company, (d) any securities of the Company that are a combination of debt and
equity, or (e) any options, warrants or other rights to subscribe for, purchase
or otherwise acquire any such equity or debt securities of the Company, unless
in each case the Company shall have first offered to sell such securities (the
"Offered Securities") to the Preferred Shareholders as set forth in this Section
12.1 or the provisions of this Section 12 shall have terminated pursuant to
Section 12.6. The Company shall offer to sell to each Preferred Shareholder (a)
that portion of the Offered Securities as the number of shares of Common Stock
then held by such Preferred Shareholder plus the number of shares obtainable by
such Preferred Shareholder upon the conversion of any Preferred Shares then held
by such Shareholder bears to the total number of shares of Common Stock then
outstanding or then issuable upon the conversion of then outstanding Preferred
Shares or then issuable upon the conversion and/or payment of any then
outstanding debt securities (such portion being herein referred to as such
Preferred Shareholder's "Basic Amount") and (b) subject to the provisions set
forth in Section 12.2, such additional portion of the Offered Securities as such
Preferred Shareholder shall indicate it will purchase should the other Preferred
Shareholders subscribe for less than their Basic Amounts (the "Undersubscription
Amount"), at a price and on such other terms as shall have been specified by the
Company in writing delivered to such Preferred Shareholder (the "Offer"), which
offer by its terms shall remain open and irrevocable for a period of twenty days
from receipt of the offer.
12.2. Notice of Acceptance. Notice of each Preferred Shareholder's
intention to accept, in whole or in part, any Offer made pursuant to Section
12.1 shall be evidenced by a writing signed by such Preferred Shareholder and
delivered to the Company prior to the end of the twenty-day period of such
offer, setting forth such of the Preferred Shareholder's Basic
- 12 -
13
Amount as such Preferred Shareholder elects purchase and, if such Preferred
Shareholder shall elect to purchase all of its Basic Amount, such
Undersubscription Amount as such Preferred Shareholder shall elect to purchase
(the "Notice of Acceptance"). If the Basic Amounts subscribed for by all
Preferred Shareholders are less than the total number of Offered Securities,
then each Preferred Shareholder who has set forth an Undersubscription Amount in
its Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amount subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that should the Undersubscription Amounts subscribed for by
all of the Preferred Shareholders exceed the difference between the number of
Offered Securities and the Basic Amounts subscribed for by all of the Preferred
Shareholders (the "Available Undersubscription Amount"), each Preferred
Shareholder that has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount
as the Basic Amount of such Preferred Shareholder bears to the initial Basic
Amounts of all Preferred Shareholders that subscribe for Undersubscription
Amounts, subject to rounding by the Board to the extent it reasonably deems
necessary.
12.3. Conditions to Acceptances and Purchases.
12.3.1. Permitted Sales of Refused Securities. In the event
that Notices of Acceptances are not given by the Preferred Shareholders in
respect of all the offered Securities, the Company shall have sixty days from
the expiration of the period set forth in Section 12.1 to sell all or any part
of such Offered Securities as to which Notices of Acceptance have not been given
by the Preferred Shareholders (the "Refused Securities") to the person or
persons specified in the Offer, but only for cash and otherwise in all respects
upon terms and conditions, including unit price and interest rates, that are not
materially more favorable to such other person or persons or less favorable to
the Company than those set forth in the Offer.
12.3.2. Reduction in Amount of Offered Securities. In the
event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section 12.3.1
above), then prior to the closing described in Section 12.3.3, each Preferred
Shareholder may, at its sole option and in its sole discretion, by written
notice to the Company reduce the number of shares (or other units of the Offered
Securities) specified in its Notice of Acceptance to an amount that shall be not
less than the amount of the offered Securities which the Preferred Shareholder
elected to purchase pursuant to Section 12.2 multiplied by a fraction, (a) the
numerator of which shall be the number of all Offered Securities which the
Company actually proposes to sell and (b) the denominator of which shall be the
total number of Offered Securities. In the event that any Preferred Shareholder
so elects to reduce the number or amount of Offered Securities specified in its
respective Notices of Acceptance, the Company may not sell or otherwise dispose
of more than the reduced amount for the Offered Securities until such securities
have again been offered to the Preferred Shareholder in accordance with Section
12.1.
- 13 -
14
12.3.3. Closing. Upon the closing, which shall include full
payment to the Company, of the sale to such other Person or Persons of all or
less than all the Refused Securities (or if all such Refused Securities are to
be purchased by Shareholders, upon a closing at a time and place agreed upon by
the Company and the Preferred Shareholders who have delivered Notices of
Acceptance), the Preferred Shareholders shall purchase from the Company, and the
Company shall sell to the Preferred Shareholders, the number of offered
Securities specified in their respective Notices of Acceptance, as reduced
pursuant to Section 12.3.2 if the Preferred Shareholders have so elected, upon
the terms and conditions specified in the Offer. The purchase by the Preferred
Shareholders of any offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Preferred
Shareholders of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Preferred Shareholders and
their respective counsel.
12.4. Further Sale. In each case, any offered Securities not purchased
by the Preferred Shareholders or other Person or Persons in accordance with
Section 12.3 may not be sold or otherwise disposed of until they are again
offered to the Preferred Shareholders under the procedures specified in Sections
12.1, 12.2 and 12.3.
12.5. Exceptions. Notwithstanding anything to the contrary herein, the
rights of the Preferred Shareholders under this Section 12 shall not apply to:
(a) Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock;
(b) Senior Preferred Shares issued as a dividend to holders of
Senior Preferred Shares, or upon any subdivision or combination of Senior
Preferred Shares;
(c) Series 1 Junior Preferred Shares issued as a dividend to
holders of Series 1 Junior Preferred Shares, or upon any subdivision or
combination of Series I Junior Preferred Shares; (d) Series 2 Junior Preferred
Shares issued as a dividend to holders of Series 2 Junior Preferred Stock, or
upon any subdivision or combination of Series 2 Junior Preferred Shares; (e)
Common Stock issued on conversion of any Preferred Shares;
(d) Series 2 Junior Preferred Shares issued as a dividend to
holders of Series 2 Junior Preferred Stock, or upon any subdivision or
combination of Series 2 Junior Preferred Shares;
(e) Common Stock issued on conversion of any Preferred Shares;
(f) Demand Promissory Notes, substantially in the form of
Exhibit D to the Purchase Agreements, representing in the aggregate not more
than $600,000 of indebtedness to existing stockholders of the Company (the
"Demand Promissory Notes");
(g) Senior Preferred Stock issued upon conversion and/or
payment of the Demand Promissory Notes;
- 14 -
15
(h) shares of Common Stock issuable as of the date hereof
under the Company's stock option plans; or
(i) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company of all or
substantially all of the capital stock or assets for any other entity, or
securities issued solely in consideration for the grant by or to the Company of
marketing rights, distribution rights, license rights or similar rights granted
by or to the Company in consideration of the exchange of proprietary technology,
whether of the Company or any other entity.
12.6. Termination of Right of First Refusal. The covenants contained in
this Section 12 shall terminate upon the earlier of:
(a) a closing of an underwritten public offering of Common
Stock on a "firm commitment" basis pursuant to a registration statement on Form
S-1 (or its then equivalent) filed under the Securities Act with the Commission,
provided that (i) the aggregate gross proceeds received by the Company from such
offering exceed $5,000,000 and (ii) such Common Stock is offered at a price per
share not-less than $.64, and
(b) the first date on which no Senior Preferred Shares and
Junior Preferred Shares are outstanding.
13. Representations and Warranties of the Company. The Company
represents and warrants to the Preferred Shareholders as follows:
(a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Articles of Organization or By-laws of the Company or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
- 15 -
16
14. Miscellaneous.
(a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including
transferees of any Restricted Securities), whether so expressed or not,
provided, however, that registration rights conferred herein on the holders of
Restricted Securities shall only inure to the benefit of a transferee of
Restricted Securities if (i) there is transferred to such transferee Restricted
Securities composed of, convertible into or exercisable for at least 392,950
shares of Common Stock or (ii) such transferee satisfies the description set
forth in the proviso to the second sentence of Section 3.
(b) All notices, requests, demands and other communications
hereunder shall be in writing (including telegraphic communication) and shall be
mailed, telegraphed or delivered to each applicable party at the address set
forth in the Purchase Agreements or at such other address as to which such party
may inform the other parties in writing in compliance with the terms of this
Section.
If to any subsequent holder of Common Stock or Preferred Shares: at
such holder's address for notice as set forth in the register maintained by the
Company, or at such other address as shall be designated by such person in a
written notice to the other parties complying as to delivery with the terms of
this Section.
All such notices, requests, demands and other communications shall,
when mailed (which mailing must be accomplished by first class mail, postage
prepaid; electronic facsimile transmission; express overnight courier service;
or registered mail, return receipt requested) or telegraphed, by effective upon
the earlier of actual receipt and the third business day after deposited in the
mails or delivered to the telegraph company, respectively, addressed as
aforesaid, unless otherwise provided herein. Any notice delivered in person
shall be deemed to have been given on the date of personal delivery.
(c) For any action to be taken hereunder by the holders of, or for any
right contingent upon, a specified percentage or proportion of one or more
classes or series of the Company's securities, such percentage or proportion
shall be determined as if all Preferred Shares had been converted into Common
Stock pursuant to the Company's Articles of Organization.
(d) This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts.
(e) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding Restricted Securities. The parties
hereto acknowledge that the Company has issued and/or may in the future issue
the Demand Promissory Notes, and that the holders of
- 16 -
17
such Demand Promissory Notes may be entitled to acquire additional Senior
Preferred Shares pursuant to the terms of the Demand Promissory Notes. The
parties hereto acknowledge that, at such time as any holder of Demand Promissory
Notes acquires additional Senior Preferred Shares, this Agreement shall be
amended to reflect the addition of such holder as a party hereto and that no
further consent or approval of any party to this Agreement will be required in
order to effect such amendment.
(f) 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. Additional persons or entities who purchase
Restricted Securities shall, as a condition to the purchase of Restricted
Securities, become parties to this Agreement and shall become holders of
"Restricted Securities" hereunder, subject to the limitation set forth in
Section 14(a), upon execution by such persons or entities of a counterpart of
this Agreement.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Securities shall agree not to sell publicly any Restricted Securities
or any other shares of Common stock (other than Restricted Securities or other
shares of Common Stock being registered in such offering), without the consent
of such underwriters, for a period of not more than ninety days following the
effective date of the registration statement relating to such offering;
provided, however, that all persons entitled to registration rights with respect
to shares of Common Stock whether or not they are parties to this Agreement, all
other persons selling shares of Common Stock in such offering and all executive
officers and directors of the Company shall also have agreed not to sell
publicly their Common Stock under the circumstances and pursuant to the terms
set forth in this Section 14(g).
(h) Notwithstanding the provisions of Section 7(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed ninety days in,any twenty-four-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed.
(i) The Company shall not grant any registration rights in conflict
with or more favorable than any of those contained herein, and the Company shall
not grant any registration rights to any person investing less than $100,000 in
cash in the Company so long as any of the registration rights under this
Agreement remains in effect.
(j) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
- 17 -
18
(k) The Company recognizes that the rights of the holders of Restricted
Securities under this Agreement are unique and, accordingly, such holders shall,
in addition to such other remedies as may be available to them at law or in
equity, have the right to enforce their rights hereunder by actions for
injunctive relief and specific performance to the extent permitted by law. This
Agreement is not intended to limit or abridge any rights of such holders which
may exist apart from this Agreement.
(l) The obligations of the Company to register Shares of Restricted
Stock under Section 4, 5 or 6 shall terminate on December 22, 2002.
- 18 -
19
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of December 22, 1992.
VOICETEK CORPORATION
By: _________________________________
Title:
PREFERRED SHAREHOLDERS:
CORNING PARTNERS II
By: __________________________________
Name:
Title:
- 19 -
20
(i) The Company shall not grant any registration rights in conflict
with or more favorable than any of those contained herein, and the Company
shall not grant any registration rights to any person investing less than
$100,000 in cash in the Company so long as any of the registration rights under
this Agreement remains in effect.
(j) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(k) The Company recognizes that the rights of the holders of Restricted
Securities under this Agreement are unique and, accordingly, such holders shall,
in addition to such other remedies as may be available to them at law or in
equity, have the right to enforce their rights hereunder by actions for
injunctive relief and specific performance to the extent permitted by law. This
Agreement is not intended to limit or abridge any rights of such holders which
may exist apart from this Agreement.
(l) The obligations of the Company to register Shares of Restricted
Stock under Section 4, 5 or 6 shall terminate on December 22, 2002.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of December 22, 1992.
VOICETEK CORPORATION
By: /s/
-----------------------------
Title:
PREFERRED SHAREHOLDERS:
CORNING PARTNERS II
By: /s/
-----------------------------
Name:
Title:
- 20 -
21
EG&G VENTURE PARTNERS
By: EG&G VENTURE MANAGEMENT, G.P.
By: /s/
-----------------------------
KEARSARGE CAPITAL FUND, L.P.
By: /s/
-----------------------------
Name:
Title:
LPP PARTNERS
By: /s/
-----------------------------
Name:
Title:
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By: /s/
-----------------------------
Name:
Title:
/s/ Xxxxxxx X. Xxxx
-----------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By: /s/
-----------------------------
Name:
Title:
- 21 -
22
EG&G VENTURE PARTNERS
By:
-------------------------------
Name:
Title:
KEARSARGE CAPITAL FUND, L.P.
By:
-------------------------------
Name:
Title:
LPP PARTNERS
By:
-------------------------------
Name:
Title:
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By:
-------------------------------
Name:
Title:
---------------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By:
-------------------------------
Name:
Title:
- 22 -
23
EG&G VENTURE PARTNERS
By:
-------------------------------
Name:
Title:
KEARSARGE CAPITAL FUND, L.P.
By:
-------------------------------
Name:
Title:
LPP PARTNERS
By:
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: General Partner
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By:
-------------------------------
Name:
Title:
----------------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By:
-------------------------------
Name:
Title:
- 23 -
24
EG&G VENTURE PARTNERS
By:
-------------------------------
Name:
Title:
KEARSARGE CAPITAL FUND, L.P.
By:
-------------------------------
Name:
Title:
LPP PARTNERS
By:
-------------------------------
Name:
Title:
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By:
-------------------------------
Name: Xxxxxxx X. X. X'Xxxxxx
Title: Vice President
---------------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By:
-------------------------------
Name:
Title:
- 24 -
25
EG&G VENTURE PARTNERS
By:
-------------------------------
Name:
Title:
KEARSARGE CAPITAL FUND, L.P.
By:
-------------------------------
Name:
Title:
LPP PARTNERS
By:
-------------------------------
Name:
Title:
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By:
-------------------------------
Name:
Title:
---------------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By:
-------------------------------
Name:
Title:
- 25 -
26
EG&G VENTURE PARTNERS
By:
-------------------------------
Name:
Title:
KEARSARGE CAPITAL FUND, L.P.
By:
-------------------------------
Name:
Title:
LPP PARTNERS
By:
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: General Partner
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORPORATION
By:
-------------------------------
Name:
Title:
----------------------------------
Xxxxxxx X. Xxxx
NYNEX DEVELOPMENT COMPANY
By:
-------------------------------
Name: R. A. Jelmen
Title: Vice President
- 26 -
27
PIONEER VENTURES LIMITED
PARTNERSHIP
By: Xxxxxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Vice President
PROVIDENCE PARTNERSHIP II
By: /s/
-------------------------------
Name:
Title:
WOOD INVESTMENT
By: /s/
-------------------------------
Name:
Title:
- 27 -
