STOCKHOLDER RIGHTS AGREEMENT
THIS STOCKHOLDER RIGHTS AGREEMENT (the "Agreement") is dated as of this
9th day of August, 1999, by and between Interspeed, Inc., a Delaware corporation
(the "Company"), and Brooktrout, Inc. ("Brooktrout").
WHEREAS, Brooktrout has agreed to enter into a Transition Services
Agreement, dated as of the effective date of the Company's initial public
offering of its common stock, with Brooktrout to provide the Company with
certain transition services through December 31, 1999 in connection with
Interspeed becoming a more autonomous entity; and
WHEREAS, the execution of this Agreement is an inducement and a
condition precedent to Brooktrout providing the transition services;
NOW, THEREFORE, in consideration of the premises, as an inducement to
Brooktrout to provide the transition services and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and Brooktrout hereby covenant and agree with each other as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the United States Securities and
Exchange Commission, or any other federal agency administering the Securities
Act and the Exchange Act at the time;.
"COMMON STOCK" shall mean (i) the Company's common stock, par
value $0.01 per share, as authorized on the date of this Agreement, (ii) any
other capital stock of any class or classes (however designated) of the Company,
authorized on or after the date hereof, the holders of which shall have the
right, without limitation as to amount per share, either to all or to a share of
the balance of current dividends and liquidating distributions after the payment
of dividends and distributions on any shares entitled to preference in the
payment thereof, and the holders of which shall ordinarily, in the absence of
contingencies, be entitled to vote for the election of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency), and (iii) any other securities into which or for which any of the
securities described in (i) or (ii) above may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
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"PERSON" shall mean an individual, a corporation, a
partnership, a joint venture, a trust, an unincorporated organization, a limited
liability company or partnership, a government and any agency or political
subdivision thereof.
"REGISTRABLE SECURITIES" shall mean (i) any shares of Common
Stock held by Brooktrout at any time, and (ii) any other securities issued and
issuable with respect to any such shares described in clauses (i) and (ii) above
by way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization (it
being understood that for purposes of this Agreement, a Person will be deemed to
be a holder of Registrable Securities whenever such Person has the right to then
acquire or obtain from the Company any Registrable Securities, whether or not
such acquisition has actually been effected).
"REGISTRATION EXPENSES" shall mean the expenses so described
in Section 6 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
2. DEMAND REGISTRATION.
(a) At any time after the initial public offering of the
Company's Common Stock pursuant to an effective registration under the
Securities Act, the holders of at least ten percent (10%) of the Registrable
Securities may notify the Company that they intend to offer or cause to be
offered for public sale all or any portion of their Registrable Securities in
the manner specified in such request. The Company will use its best efforts to
expeditiously effect the registration of all Registrable Securities to the
extent provided for in the following provisions of this Agreement.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 2 within ninety (90) 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 Registrable Securities
shall have been entitled to join pursuant to Section 4 and in which there shall
have been effectively registered all Registrable Securities as to which
registration shall have been requested (or in the event of an initial public
offering, 180 days after the date of the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Securities Act or if no filing under
Rule 424(b) is made, the date of the final prospectus included in the Form S-1
when declared effective under the Securities Act).
(b) If a requested registration involves an underwritten
public offering and the managing underwriter of such offering determines in good
faith that the number of securities sought to be offered should be limited due
to market conditions, then the number of securities to be included in such
underwritten public offering shall be reduced to a number deemed satisfactory by
such managing underwriter, PROVIDED that the shares to be excluded shall be
determined in the following order of priority: (i) securities held by any other
Persons (other than the holders of Registrable Securities) having a contractual,
incidental "piggy back" right to
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include such securities in the registration statement, (ii) Registrable
Securities of holders who did not make the original request for registration
and, if necessary, (iii) Registrable Securities of holders who requested such
registration pursuant to Section 2(a). If there is a reduction of the number of
Registrable Securities pursuant to clauses (ii) or (iii), such reduction shall
be made on a pro rata basis (based upon the aggregate number of Registrable
Securities held by such holders).
(c) With respect to a request for registration pursuant to
Section 2(a) which is for an underwritten public offering, the managing
underwriter shall be chosen by the holders of a majority of the Registrable
Securities to be sold in such offering (which approval will not be unreasonably
withheld or delayed). The Company may not cause any other registration of
securities for sale for its own account (other than a registration effected
solely to implement an employee benefit plan or a transaction to which Rule 145
of the Securities Act is applicable) to become effective within one hundred
twenty (120) days following the effective date of any registration required
pursuant to this Section 2.
3. FORM S-3.
(a) After the first public offering of its securities
registered under the Securities Act, the Company shall use its best efforts to
qualify and remain qualified to register securities on Form S-3 (or any
successor form) under the Securities Act. At any time that the Company is so
qualified, the holders of at least ten percent (10%) of the Registrable
Securities shall have the right to request any number of registrations on Form
S-3 (or any successor form) for the Registrable Securities held by such
requesting holders, including registrations for the sale of such Registrable
Securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act. Such requests shall be in writing and shall state the number of
shares of Registrable Securities to be disposed of and the intended method of
disposition of such shares by such holder or holders.
(b) In the case of a registration for the sale of Registrable
Securities on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act (a "Shelf Registration Statement"), upon receipt of any notice (a
"Suspension Notice") from the Company of the happening of any event which makes
any statement made in the Shelf Registration Statement or related prospectus
untrue or which requires the making of any changes in such Shelf Registration
Statement or prospectus so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made not misleading, each holder of Registrable Securities
registered under such Shelf Registration Statement shall forthwith discontinue
disposition of such Registrable Securities pursuant to such Shelf Registration
Statement until such holder's receipt of the copies of the supplemented or
amended prospectus or until it is advised in writing (the "Advice") by the
Company that the use of the prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated by reference in
the prospectus; PROVIDED, HOWEVER, that the Company shall not give a Suspension
Notice until after the Shelf Registration Statement has been declared effective
and shall not give more than one Suspension Notice during any period of twelve
(12) consecutive
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months and in no event shall the period from the date on which any holder of
Registrable Securities receives a Suspension Notice to the date on which any
such holder receives either the Advice or copies of the supplemented or amended
prospectus (the "Suspension Period") exceed sixty (60) days. In the event that
the Company shall give any Suspension Notice, the Company shall use its best
efforts and take such actions as are reasonably necessary to render the Advice
and end the Suspension Period as promptly as practicable.
4. PIGGYBACK REGISTRATION. If the Company at any time after the
initial public offering of the Company's Common Stock pursuant to an effective
registration under the Securities Act, proposes to register any of its
securities under the Securities Act for sale to the public (except pursuant to a
demand under Section 2 hereof and except with respect to registration statements
on Forms ▇-▇, ▇-▇ or another form not available for registering the Registrable
Securities for sale to the public), each such time it will give written notice
at the applicable address of record to each holder of Registrable Securities of
its intention to do so. Upon the written request of any of such holders of the
Registrable Securities, given within twenty (20) days after receipt by such
Person of such notice, the Company will, subject to the limits contained in this
Section 4, use its best efforts to cause all such Registrable Securities of said
requesting holders to be registered under the Securities Act and qualified for
sale under any state blue sky law, all to the extent required to permit such
sale or other disposition of said Registrable Securities; PROVIDED, HOWEVER,
that if the Company is advised in writing in good faith by any managing
underwriter of the Company's securities being offered in a public offering
pursuant to such registration statement that the amount to be sold by persons
other than the Company (collectively, "Selling Stockholders") is greater than
the amount which can be offered without adversely affecting the offering, the
Company may reduce the amount offered for the accounts of Selling Stockholders
(including such holders of shares of Registrable Securities) to a number deemed
satisfactory by such managing underwriter; and PROVIDED FURTHER, that the shares
to be excluded shall be determined in the following order of priority: (i)
securities held by any Persons not having any such contractual, incidental
registration rights, (ii) securities held by any Persons having contractual,
incidental registration rights pursuant to an agreement which is not this
Agreement, and (iii) the Registrable Securities sought to be included by the
holders thereof as determined on a pro rata basis (based upon the aggregate
number of Registrable Securities held by such holders).
5. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of its securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) use its best efforts diligently to prepare and file with
the Commission a registration statement on the appropriate form under the
Securities Act with respect to such securities, which form shall comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith, and use its best efforts to cause such registration statement to
become and remain effective until completion of the proposed offering;
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(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 and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the seller or sellers of such securities shall desire to sell or
otherwise dispose of the same, but only to the extent provided in this
Agreement;
(c) furnish to each selling holder and the underwriters, if
any, such number of copies of such registration statement, any amendments
thereto, any documents incorporated by reference therein, the prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such selling holder may reasonably
request in order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(d) use every reasonable effort to register or qualify the
securities covered by such registration statement under such other securities or
state blue sky laws of such jurisdictions as each selling holder shall
reasonably request, and do any and all other acts and things which may be
necessary under such securities or blue sky laws to enable such selling holder
to consummate the public sale or other disposition in such jurisdictions of the
securities owned by such selling holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified;
(e) within a reasonable time before each filing of the
registration statement or prospectus or amendments or supplements thereto with
the Commission, furnish to counsel selected by the holders of Registrable
Securities copies of such documents proposed to be filed, which documents shall
be subject to the reasonable approval of such counsel;
(f) promptly notify each selling holder of Registrable
Securities, such selling holders' counsel and any underwriter and (if requested
by any such Person) confirm such notice in writing, of the happening of any
event which makes any statement made in the registration statement or related
prospectus untrue or which requires the making of any changes in such
registration statement or prospectus so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading; and, as promptly as
practicable thereafter, prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable to
the purchasers of such Registrable Securities, such prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(g) use its best efforts to prevent the issuance of any order
suspending the effectiveness of a registration statement, and if one is issued
use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of a registration statement at the earliest possible moment;
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(h) if requested by the managing underwriter or underwriters
(if any), any selling holder, or such selling holder's counsel, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as such Person requests to be included therein, including, without
limitation, with respect to the securities being sold by such selling holder to
such underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of an
underwritten offering of the securities to be sold in such offering, and
promptly make all required filings of such prospectus supplement or
post-effective amendment;
(i) make available to each selling holder, any underwriter
participating in any disposition pursuant to a registration statement, and any
attorney, accountant or other agent or representative retained by any such
selling holder or underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information requested by any
such Inspector in connection with such registration statement;
(j) enter into any reasonable underwriting agreement required
by the proposed underwriter(s) for the selling holders, if any, and use its best
efforts to facilitate the public offering of the securities;
(k) furnish to each prospective selling holder a signed
counterpart, addressed to the prospective selling holder, of (A) an opinion of
counsel for the Company, dated the effective date of the registration statement,
and (B) a "comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in the registration
statement, covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and (in the case of
the accountants' letter) with respect to events subsequent to the date of the
financial statements, as are customarily covered (at the time of such
registration) in opinions of the Company's counsel and in accountants' letters
delivered to the underwriters in underwritten public offerings of securities;
(l) use its best efforts to cause the securities covered by
such registration statement to be listed on the securities exchange or quoted on
the quotation system on which the Common Stock of the Company is then listed or
quoted (or if the Common Stock is not yet listed or quoted, then on such
exchange or quotation system as the selling holders of Registrable Securities
and the Company shall determine);
(m) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its security holders, in each case as soon as practicable, but not later than
45 days after the close of the period covered thereby, an earnings statement of
the Company which will satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any comparable successor provisions); and
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(n) otherwise cooperate with the underwriter(s), the
Commission and other regulatory agencies and take all actions and execute and
deliver or cause to be executed and delivered all documents necessary to effect
the registration of any securities under this Agreement.
6. EXPENSES. All reasonable expenses incurred in effecting the
registrations provided for in Sections 2, 3 and 4, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, underwriting expenses (other than
fees, commissions or discounts), expenses of any audits incident to or required
by any such registration and expenses of complying with the securities or blue
sky laws of any jurisdictions pursuant to Section 5(d) hereof (all of such
expenses referred to as "Registration Expenses"), shall be paid by the Company.
7. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless the selling
holder of Registrable Securities, each underwriter (as defined in the Securities
Act), and each other Person who participates in the offering of such securities
and each other Person, if any, who controls (within the meaning of the
Securities Act) such seller, underwriter or participating Person (individually
and collectively, the "Indemnified Person") against any losses, claims, damages
or liabilities (collectively, the "liability"), joint or several, to which such
Indemnified Person may become subject under the Securities Act or any other
statute or at common law, insofar as such liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading. Except as otherwise
provided in Section 7(d), the Company shall reimburse each such Indemnified
Person in connection with investigating or defending any such liability;
PROVIDED, HOWEVER, that the Company shall not be liable to any Indemnified
Person in any such case to the extent that any such liability arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary or final
prospectus, or amendment or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by such Person
specifically for use therein, or upon such statement or omission therein based
on the authority of an expert within the meaning of that term as defined in the
Securities Act (but only if the Company had no reasonable ground to believe, and
did not believe, that the statements made on the authority of an expert were
untrue or that there was an omission to state a material fact); and PROVIDED
FURTHER, that the Company shall not be required to indemnify any Person against
any liability arising from any untrue or misleading statement or omission
contained in any preliminary prospectus if such deficiency is corrected in the
final prospectus or for any liability which arises out of the failure of any
Person to deliver a prospectus as required by the Securities Act regardless of
any investigation made by or on behalf of such Indemnified Person and shall
survive transfer of such securities by such seller.
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(b) Each selling holder of any securities included in such
registration being effected shall indemnify and hold harmless each other selling
holder of any securities, the Company, its directors and officers, each
underwriter and each other Person, if any, who controls the Company or such
underwriter (individually and collectively also the "Indemnified Person"),
against any liability, joint or several, to which any such Indemnified Person
may become subject under the Securities Act or any other statute or at common
law, insofar as such liability (or actions in respect thereof) arises out of or
is based upon (i) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which securities were registered under the Securities Act at the
request of such selling holder, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or (ii) any omission
or alleged omission by such selling holder to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in the case of (i) and (ii) to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary or final
prospectus, amendment or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by such selling holder
specifically for use therein, and then only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission by the
selling holder was not based on the authority of an expert as to which the
selling holder had no reasonable ground to believe, and did not believe, that
the statement made on the authority of such expert was untrue or that there was
an omission to state a material fact. Such selling holder shall reimburse any
Indemnified Person for any legal fees incurred in investigating or defending any
such liability; PROVIDED, HOWEVER, that such selling holder's obligations
hereunder shall be limited to an amount equal to the proceeds to such selling
holder of the securities sold in any such registration; and PROVIDED FURTHER,
however, that no selling holder shall be required to indemnify any Person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus or for any liability which arises out of the failure of
any Person to deliver a prospectus as required by the Securities Act.
(c) Indemnification similar to that specified in Sections 7(a)
and (b) shall be given by the Company and each selling holder (with such
modifications as may be appropriate) with respect to any required registration
or other qualification of their securities under any federal or state law or
regulation of governmental authority other than the Securities Act.
(d) In the event the Company, any selling holder or other
Person receives a complaint, claim or other notice of any liability or action,
giving rise to a claim for indemnification under Sections 7(a), (b) or (c)
above, the Person claiming indemnification under such paragraphs shall promptly
notify the Person against whom indemnification is sought of such complaint,
notice, claim or action, and such indemnifying Person shall have the right to
investigate and defend any such loss, claim, damage, liability or action. The
Person claiming indemnification shall have the right to employ separate counsel
in any such action and to participate in the defense thereof but the fees and
expenses of such counsel shall not be at the expense of the Person against whom
indemnification is sought (unless the indemnifying party fails to promptly
defend, in which case the fees and expenses of such separate counsel shall be
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borne by the Person against whom indemnification is sought). In no event shall a
Person against whom indemnification is sought be obligated to indemnify any
Person for any settlement of any claim or action effected without the
indemnifying Person's prior written consent.
8. COMPLIANCE WITH RULE 144. In the event that the Company (i)
registers a class of securities under Section 12 of the Exchange Act or (ii)
shall commence to file reports under Section 13 or 15(d) of the Exchange Act,
the Company will use its best efforts thereafter to file with the Commission
such information as is required under the Exchange Act for so long as there are
holders of Registrable Securities; and in such event, the Company shall use its
best efforts to take all action as may be required as a condition to the
availability of Rule 144 under the Securities Act (or any comparable successor
rules). The Company shall furnish to any holder of Registrable Securities upon
request a written statement executed by the Company as to the steps it has taken
to comply with the current public information requirement of Rule 144 (or such
comparable successor rules). After the occurrence of the first underwritten
public offering of Common Stock of the Company pursuant to an offering
registered under the Securities Act on Form S-1 or Form SB-1 (or any comparable
successor forms), subject to the limitations on transfers imposed by this
Agreement, the Company shall use its best efforts to facilitate and expedite
transfers of Registrable Securities pursuant to Rule 144 under the Securities
Act, which efforts shall include timely notice to its transfer agent to expedite
such transfers of Registrable Securities.
9. AMENDMENTS. The provisions of this Agreement may be amended,
and the Company may take any action herein prohibited or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of at least a majority of the Registrable
Securities.
10. TRANSFERABILITY OF REGISTRATION RIGHTS. The registration
rights set forth in this Agreement are transferable to each transferee of
Registrable Securities, other than a transferee whose activities, products or
services are competitive with the activities, products or services of the
Company as of the date of such transfer; provided however, that the registration
rights set forth in this Agreement shall not be transferable to a transferee of
Registrable Securities if such securities are freely transferable. Each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement.
11. RIGHTS WHICH MAY BE GRANTED TO SUBSEQUENT INVESTORS. Other
than permitted transferees of Registrable Securities under Section 10 hereof,
the Company shall not, without the prior written consent of holders of at least
a majority of the Registrable Securities, (a) allow purchasers of the Company's
securities to become a party to this Agreement or (b) grant any other
registration rights to any third parties.
12. DAMAGES. The Company recognizes and agrees that each holder of
Registrable Securities will not have an adequate remedy if the Company fails to
comply with the terms and provisions of this Agreement and that damages will not
be readily ascertainable, and the Company expressly agrees that, in the event of
such failure, it shall not oppose an application by
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any holder of Registrable Securities or any other Person entitled to the
benefits of this Agreement requiring specific performance of any and all
provisions hereof or enjoining the Company from continuing to commit any such
breach of this Agreement.
13. CONTROL PERSON INDEMNIFICATION.
(a) The Company shall, to the full extent permitted by law,
and in addition to any such rights which any Indemnified Person (as defined
herein) may have pursuant to statute, the Company's charter, the Company's
by-laws, or otherwise, indemnify and hold harmless Brooktrout (including its
respective directors, officers, partners, employees and agents) and each person
(a "Controlling Person" and collectively with Brooktrout, the "Brooktrout
Indemnified Parties") who controls Brooktrout within the meaning of Section 15
of the Securities Act, or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, expenses and liabilities, joint or several,
including any investigation, legal and other expenses incurred in connection
with the investigation, defense, settlement or appeal of, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted ("Losses" or
"Loss"), to which they, or any of them, may become subject by reason of their
status as a director, agent, representative or controlling person of the Company
(including, without limitation, any and all Losses under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, relating directly or indirectly to any fiduciary or other
obligation owed to the Company, its stockholders or any purchasers of its
securities as a result of Brooktrout's ownership of any securities of the
Company or sale of any of the Company's securities or their status as a control
person); PROVIDED, HOWEVER, that the Company will not be liable to the extent
that such Loss (i) arises out of or as a result of the gross negligence or
willful misconduct of any Brooktrout Indemnified Party or (ii) arises from and
is based on an untrue statement or omission or alleged untrue statement or
omission in a registration statement or prospectus which is made in reliance on
and in conformity with written information furnished to the Company in an
instrument duly executed by or on behalf of such Brooktrout Indemnified Party
specifically stating that it is for use in the preparation thereof. The
indemnification and contribution provided for in this Section 13 will remain in
full force and effect regardless of any investigation made by or on behalf of
the Brooktrout Indemnified Parties or any officer, director, employee, agent or
Controlling Person of the Brooktrout Indemnified Parties.
(b) If the indemnification provided for in Section 13(a) above
for any reason is held by a court of competent jurisdiction to be unavailable to
a Brooktrout Indemnified Party in respect of any Losses referred to therein,
then the Company, in lieu of indemnifying the Brooktrout Indemnified Party
thereunder, shall contribute to the amount paid or payable by such Brooktrout
Indemnified Party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
Brooktrout, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and Brooktrout in connection with the action or inaction
which resulted in such Losses, as well as any other relevant equitable
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considerations. In connection with the registration of the Company's securities,
the relative benefits received by the Company and Brooktrout shall be deemed to
be in the same respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Company and Brooktrout, in each case
as set forth in the table on the cover page of the applicable prospectus, bear
to the aggregate public offering price of the securities so offered. The
relative fault of the Company and Brooktrout shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or Brooktrout and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and Brooktrout agree that it would not be just and
equitable if contribution pursuant to this Section 13(b) were determined by pro
rata or per capita allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. In connection with the registration of the Company's
securities, in no event shall Brooktrout be required to contribute any amount
under this Section 13(b) in excess of the lesser of (i) that proportion of the
total of such Losses indemnified against equal to the proportion of the total
securities sold under such registration statement which is being sold by
Brooktrout or (ii) the proceeds received by Brooktrout from its sale of
securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.
(c) Any Brooktrout Indemnified Party that proposes to assert
the right to be indemnified under this Section 13 will, promptly after receipt
of notice of commencement of any claim or action against such party in respect
of which a claim is to be made against the Company under this Section 13, notify
the Company of the commencement of such action, enclosing a copy of all papers
served, but the omission so to notify the Company will not relieve the Company
from any liability that the Company may have to any Brooktrout Indemnified Party
under the foregoing provisions of this Section 13 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the Company. Subject to the rights of or duties to any insurer or other third
person having liability therefor, the Company shall have the right promptly
after receipt of such notice to assume the control of such defense, compromise
or settlement of any such action, including, at its own expense, employment of
counsel reasonably satisfactory to the Brooktrout Indemnified Party.
Notwithstanding the preceding sentence, in any such matter described in the
preceding sentence, the Brooktrout Indemnified Party shall have the right to
retain its own separate counsel, but the fees and expenses of such counsel shall
be at the Brooktrout Indemnified Party's expense unless (a) the Brooktrout
Indemnified Party and the Company have agreed to the contrary, (b) the Company
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Brooktrout Indemnified Party or (c) representation of both the Brooktrout
Indemnified Party and the Company by the same counsel could be inappropriate due
to actual or potential differing interests between them. In any matter described
above where the
11
Brooktrout Indemnified Party has obtained counsel to represent it in addition to
the counsel obtained by the Company, counsel selected by the Company shall be
required to cooperate fully with counsel selected by the Brooktrout Indemnified
Party in such matter. The Company shall not settle any action or claim for which
indemnification is sought under this Section 13 without the prior written
consent of the Brooktrout Indemnified Party.
14. LOCK-UP AGREEMENT. All of Brooktrout's rights under
Sections 2,3 and 4 of this Agreement are subject to the lock-up agreement
entered into by between Brooktrout and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Read LLC and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Gull, as representatives of the
several underwriters in connection with Interspeed's initial public offering.
15. MISCELLANEOUS.
(a) All notices, requests, demands and other communications
provided for hereunder shall be in writing and mailed (by first class registered
or certified mail, postage prepaid), telegraphed, sent by express overnight
courier service or electronic facsimile transmission (with a copy by mail), or
delivered to the applicable party at the addresses indicated below:
IF TO THE COMPANY:
Interspeed, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Ide
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO BROOKTROUT:
Brooktrout Technology, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
12
WITH A COPY TO:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO ANY OTHER HOLDER OF REGISTRABLE SECURITIES:
At such Person's address for notice as set forth in the books
and records of the Company
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to other parties complying as to delivery with
the terms of this subsection (a). All such notices, requests, demands and other
communications shall, when mailed, telegraphed or sent, respectively, be
effective (i) two days after being deposited in the mails or (ii) one day after
being delivered to the telegraph company, deposited with the express overnight
courier service or sent by electronic facsimile transmission, respectively,
addressed as aforesaid.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
conflict of laws principles thereof. Except with respect to matters as to which
injunctive relief is being sought, any dispute arising out of or relating to
this Agreement that has not been settled within thirty (30) days by good faith
negotiation between the parties to this Agreement shall be submitted to the
JAMS/Endispute, Inc. for final and binding arbitration pursuant to the
JAMS/Endispute, Inc.'s Arbitration Rules. Any such arbitration shall be
conducted in Boston, Massachusetts.
(c) 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.
(d) 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.
[SIGNATURE PAGE FOLLOWS]
13
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first set forth above.
INTERSPEED, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Ide
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Ide
Title: President
BROOKTROUT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]