EXHIBIT 10.22
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (the "AGREEMENT") is entered into by
and between Bear, Xxxxxxx & Co. Inc. ("BEAR XXXXXXX") and ScanSoft, Inc. (the
"COMPANY") (collectively with Bear Xxxxxxx, the "PARTIES"), effective as of
November 12, 2001 ("EFFECTIVE DATE").
RECITALS
A. The Company, as successor-in-interest to Caere Corporation, and Bear
Xxxxxxx are parties to that certain engagement letter dated September 9, 1999
(the "ENGAGEMENT LETTER").
B. Pursuant to the terms of the Engagement Letter, Bear Xxxxxxx was to
receive certain payments from the Company as compensation for its role as
financial advisor with respect to certain transactions (the "ORIGINAL PAYMENT").
C. Bear Xxxxxxx now agrees to accept payment other than the Original
Payment as payment in full to satisfy fees and expenses due by the Company to
Bear Xxxxxxx under the Engagement Letter (the "SETTLEMENT PAYMENT").
D. The parties intend for this Agreement to be the full, final, and
exclusive embodiment of the parties' agreement with respect to fees and expenses
in connection with the Engagement Letter; but that the confidentiality,
indemnity, contribution and other rights and obligations of the parties pursuant
to the Engagement Letter shall continue in full force and effect.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
other good and valuable consideration contained herein, it is hereby agreed by
and between the parties hereto as follows:
1. CONSIDERATION. As full and final payment in satisfaction of all fees
and expenses to Bear Xxxxxxx by the Company in connection with the Engagement
Letter, the Company shall deliver to Bear Xxxxxxx:
(a) Within 10 days of the execution of this Agreement, a
certificate representing Two Hundred Sixty-two Thousand Two Hundred (262,200)
shares of Common Stock of the Company, par value $0.001 per share (the "STOCK"),
which such number represents the number of shares of stock, rounded to the
nearest whole 100 share lot, equal in value to Seven Hundred Thousand Dollars
($700,000), based on a per share price of Two Dollars and Sixty-seven cents
($2.67); and
(b) No later than January 15, 2001, cash in the amount of Seven
Hundred Thousand Dollars ($700,000) by wire transfer to an account designated by
Bear Xxxxxxx (the "CASH Payment").
(c) Hereinafter, the Stock and the Cash Payment, together, may be
referred to as the "CONSIDERATION."
2. RELEASE.
(a) The Company and Bear Xxxxxxx, on behalf of themselves and each
of their past, present and future predecessors in interest, successors in
interest, assigns, insurers, parent companies, subsidiaries, officers,
directors, stockholders, partners, employees, agents, investors, and attorneys,
and any persons acting in concert with them (collectively, "RELEASORS"), hereby
fully and forever mutually release and discharge one another and their
respective Releasors from any and all claims, demands, liens, agreements,
contracts, covenants, debts, costs, expenses, damages, judgments, orders, and
liabilities of whatever kind or nature, in law, equity, or otherwise, whether
now known or unknown, vested or contingent, suspected or unsuspected, and
whether or not concealed or hidden, which have existed, or which do exist, or
which hereafter can, shall, or may exist which arise out of, or are in any way
connected with, the fees and expenses relating to the Engagement Letter or any
of the transactions contemplated thereby.
(b) Each party represents and warrants on its behalf, and on
behalf of its Releasors, that it is fully entitled to give this release and
discharge and that there are no liens, claims of lien, or assignments, at law or
in equity or otherwise, with respect to any existing or potential claims or
causes of action arising out of, or in any way connected with, their
relationship.
3. NONDISPARAGEMENT. Bear Xxxxxxx and the Company agree that neither
party will, in connection with the Engagement Letter or this Agreement,
disparage the other, either orally or in writing, to third parties in any manner
likely to be harmful to the other party, their business reputation, or the
personal or business reputation of its directors, stockholders and/or employees.
Notwithstanding the prohibition in the preceding sentence, each party shall
respond accurately and fully to any question, inquiry, or request for
information when required by legal process, or when deposed by a governmental
entity, pursuant to the requirements set forth herein.
4. LIMITATIONS ON TRANSFER. Bear Xxxxxxx shall not assign, hypothecate,
donate, encumber or otherwise dispose of any interest in the Stock except in
compliance with the provisions herein and applicable securities laws.
5. RESTRICTIVE LEGENDS. All certificates representing the Stock shall
have endorsed thereon legends in substantially the following forms (in addition
to any other legend which may be required by other agreements between the
parties hereto):
(a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND IN ACCORDANCE
WITH ALL
2
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS."
(b) Any legend required by state securities laws.
6. INVESTMENT REPRESENTATIONS. In connection with the receipt of the
Stock, Bear Xxxxxxx represents to the Company the following:
(a) Bear Xxxxxxx understands that the sale by it of the Stock has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act") nor is such sale known at this time to be subject to a
specific exemption therefrom.
(b) Bear Xxxxxxx understands that the Stock is being offered and
sold by the Company pursuant to the exemption from registration contained in
Section 4(2) of the Securities Act and that the Stock has not been registered
pursuant to the Securities Act. Bear Xxxxxxx acknowledges and understands that
the Stock must be held indefinitely unless the Stock is subsequently registered
under the Securities Act or an exemption from such registration is available.
Bear Xxxxxxx agrees that the Stock may only be resold by it pursuant to an
available exemption from such registration or an effective registration
statement. Bear Xxxxxxx understands that the certificate evidencing the Stock
will be imprinted with a legend that prohibits the transfer of the Stock unless
the Stock is registered or such registration is not required in the opinion of
counsel for the Company.
(c) Bear Xxxxxxx has been advised or is aware of the provisions of
Rule 144 promulgated under the Securities Act as in effect from time to time,
which permits limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(d) Bear Xxxxxxx further understands that at the time Bear Xxxxxxx
wishes to sell the Stock there may be no public market upon which to make such a
sale, and that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, Bear Xxxxxxx would be precluded from selling the Stock under Rule
144 even if the minimum holding period requirement had been satisfied.
7. REPRESENTATIONS OF THE COMPANY.
(a) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of Delaware, has the corporate
power and corporate authority to own its property and to conduct its business as
currently conducted.
(b) The Stock has been duly authorized and reserved and, when
issued in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable.
3
(c) The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this Agreement and
the Registration Rights Agreement (as defined below) and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company, and no
further action is required by the Company to authorize this Agreement or the
Registration Rights Agreement. Each of this Agreement and the Registration
Rights Agreement has been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and general
equity principles.
(d) The Company files certain periodic reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "SEC DOCUMENTS"). As of their respective dates, none of the SEC Documents,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
8. REGISTRATION RIGHTS AGREEMENT. Simultaneously with the execution and
delivery of this Agreement, the Company and Bear Xxxxxxx have entered into a
Registration Rights Agreement in the form attached hereto as EXHIBIT A, dated as
of the date hereof (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company has agreed to register the Stock under certain circumstances.
9. REFUSAL TO TRANSFER. The Company shall not be required (a) to
transfer on its books any shares of the Stock which shall have been transferred
in violation of any of the provisions set forth in this Agreement or (b) to
treat as owner of such shares or to accord the right to vote as such owner or to
pay dividends to any transferee to whom such shares shall have been so
transferred.
10. SUCCESSORS AND ASSIGNS. This Agreement shall bind the personal
representatives, successors and assigns of both Bear Xxxxxxx and the Company,
and inure to the benefit of both Bear Xxxxxxx and the Company, and their
respective successors and assigns.
11. FUTURE DISCOVERY. Each party acknowledges that it may hereafter
discover facts relating to the Engagement Letter that occurred prior to the date
of this Agreement and are different from, or in addition to, those which it now
knows or believes to be true, and each Party agrees that this Agreement shall be
and remains effective and applicable in all respects, notwithstanding such
different or additional facts, or the discovery thereof.
12. COSTS AND FEES. Except as specifically set forth herein, the parties
will bear their own costs, expenses, and attorneys' fees, whether taxable or
otherwise, incurred in or arising out of or in any way related to the matters
released herein.
4
13. VOLUNTARY AND KNOWING. Each party acknowledges that it has had the
opportunity to consult with legal counsel regarding the meaning and consequences
of this Agreement, and further acknowledges that it has read and understands
this Agreement, and that it has executed this Agreement on its own free will and
accord, without any duress or undue influence.
14. WAIVER. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instruments signed by the Party
charged with the waiver or estoppel; no written waiver shall be deemed a
continuing waiver unless specifically stated therein, and the written waiver
shall operate only as to the specific term or condition waived, and not for the
future or as to any other act than that specifically waived.
15. TAXES. The parties expressly acknowledge that no party has made, nor
herein makes, any representation about the tax consequences of any consideration
provided by or to any party pursuant to this Agreement.
16. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, postage prepaid, by hand or by messenger,
addressed:
(a) if to the Holder, to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx Xxxxxxx
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
or at such other address as Holder shall have furnished to the
Company.
(b) if to the Company, to:
ScanSoft, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
5
or at such other address as the Company shall have furnished
to the Holder
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Each such notice or other communication shall, for all purposes of this
Agreement, be treated as effective or having been given when actually delivered
as provided above, if delivered personally or by messenger, or, on the day shown
on the return receipt, if sent by mail or other delivery service.
17. DUTY TO EFFECTUATE. Each of the Parties agrees to perform any lawful
additional acts, including the execution of additional agreements, as are
reasonably necessary to effectuate the purpose of this Agreement.
18. ENTIRE AGREEMENT. This Agreement constitutes the complete, final and
exclusive embodiment of the entire agreement between the parties with respect to
the subject matter of this Agreement. This Agreement is executed without
reliance upon any promise, warranty or representation, written or oral, by any
party or any representative of any party other than those expressly contained
herein. This Agreement may not be amended or modified except in a writing signed
by Bear Xxxxxxx and the Company.
19. SEVERABILITY. If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement, and the provision in question
shall be modified by the court so as to be rendered enforceable.
20. CONSTRUCTION. The parties agree that they have been represented by
counsel during the negotiation, preparation and execution of this Agreement and
have had the opportunity to influence the choice of language and, therefore,
waive the application of any law, regulations, holding or rule of construction
providing that ambiguities in this Agreement or other document will be construed
against the party drafting such agreement or document.
21. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
22. APPLICABLE LAW. This Agreement shall be deemed to have been entered
into and shall be construed and enforced in accordance with the laws of the
State of New York as applied to contracts made and to be performed entirely
within New York.
6
23. JURISDICTION. Each of the parties submits to the jurisdiction of any
state or federal court sitting in the State of New York, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Any action brought in
contravention of this paragraph by one party is subject to dismissal at any time
and at any stage of the proceedings by the other, and no action taken by the
other in defending, counterclaiming or appealing shall be construed as a waiver
of this right to immediate dismissal. A party bringing an action in
contravention of this paragraph shall be liable to the other party for the
costs, expenses and attorney's fees incurred in successfully dismissing the
action or successfully transferring the action to a forum located within the
State of New York.
24. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7
IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as of the date set forth above.
SCANSOFT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Print Name: Xxxxxxx X. Xxxxxx
---------------------------
Title: Senior Vice President and Chief Financial Officer
--------------------------------------------------
BEAR, XXXXXXX & CO. INC.
By: /s/ Xx Xxxxxxx
------------------------------------
Print Name: Xx Xxxxxxx
----------------------------
Title: Senior Managing Director
---------------------------------
[SIGNATURE PAGE TO SETTLEMENT AND RELEASE AGREEMENT]
