EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of the 31st day of December 1997 (the "Effective Date"), by and between
VOICE IT WORLDWIDE, INC., a Colorado corporation (the "Company") and APPLIED
VOICE RECOGNITION, INC., a Utah corporation (the "Shareholder").
R E C I T A L S:
WHEREAS, the Shareholder is acquiring 471,698 shares (the "Shares") of the
common stock, par value $.10 per share (the "Common Stock") of the Company;
and
WHEREAS, the Company desires to grant to the Shareholder certain
registration rights relating to the Shares, and the Shareholder desires to
obtain such registration rights, subject to the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual premises, representations,
warranties and conditions set forth in this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions and References. For purposes of this Agreement, in addition to
the definitions set forth above and elsewhere herein, the following terms shall
have the following meanings:
(a) The term "Commission" shall mean the Securities and Exchange Commission and
any successor agency.
(b) The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act (as herein defined) and
the declaration or ordering of effectiveness of such registration statement
or document.
(c) For purposes of this Agreement, the term "Registrable Stock" shall mean (i)
the Shares, (ii) any Common Stock issued to Holders on account of the
Shares by way of a stock split, reorganization, merger or consolidation,
and (iii) any Common Stock issued as a dividend on the Shares. For
purposes of this Agreement, any Registrable Stock shall cease to be
Registrable Stock when a registration statement covering such Registrable
Stock has been declared effective.
(d) The term "Holder" shall mean the Shareholder or any transferee or assignee
thereof to whom the rights under this Agreement are assigned in
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accordance with Section 9 hereof, provided that the Shareholder or such
transferee or assignee shall then own the Registrable Stock.
(e) The term "1933 Act" shall mean the Securities Act of 1933, as amended.
(f) An "affiliate of such Holder" shall mean a person who controls, is
controlled by or is under common control with a Holder, or the spouse or
children (or a trust exclusively for the benefit of the spouse and/or
children) of a Holder, or, in the case of a Holder that is a partnership,
its partners.
(g) The term "Person" shall mean an individual, corporation, partnership,
trust, limited liability company, unincorporated organization or
association or other entity, including any governmental entity.
(h) The term "Requesting Holder" shall mean a Holder or Holders of in the
aggregate at least a majority of the Registrable Stock.
References in this Agreement to any rules, regulations or forms promulgated
by the Commission shall include rules, regulations and forms succeeding to the
function thereof, whether or not bearing the same designation.
2. Incidental Registration. Commencing immediately after the Effective Date
and ending on the day that is one year after the Effective Date, if the Company
determines that it shall file a registration statement under the 1933 Act (other
than a registration statement on a Form S-4 or S-8 or filed in connection with
an exchange offer or an offering of securities solely in connection with an
acquisition or to the Company's existing stockholders) or any form that would
also permit the registration of the Registrable Stock and such filing is to be
on its behalf and/or on behalf of selling holders of its securities for the
general registration of its common stock to be sold for cash, at each such time
the Company shall promptly give each Holder written notice of such determination
setting forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than twenty (20) days from the date of
such notice, and advising each Holder of its right to have Registrable Stock
included in such registration. Upon the written request of any Holder received
by the Company no later than twenty (20) days after the date of the Company's
notice, the Company shall use its commercially reasonable efforts to cause to be
registered under the 1933 Act all of the Registrable Stock that each such Holder
has so requested to be registered. If, in the written opinion of the managing
underwriter or underwriters (or, in the case of a non-underwritten offering, in
the written opinion of the placement agent, or if there is none, the Company),
the total amount of such securities to be so registered, including such
Registrable Stock, will exceed the maximum amount of the Company's securities
which can be marketed (i) at a price reasonably related to the then current
market value of such securities, or (ii) without otherwise materially and
adversely affecting the entire offering, then the amount of Registrable Stock to
be offered for the accounts of Holders shall be
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reduced pro rata to the extent necessary to reduce the total amount of
securities to be included in such offering to the recommended amount; provided,
that if securities are being offered for the account of other Persons as well as
the Company, such reduction shall not represent a greater fraction of the number
of securities intended to be offered by Holders than the fraction of similar
reductions imposed on such other Persons other than the Company over the amount
of securities they intended to offer.
3. Required Registration. The Company hereby covenants and agrees that
the Company will use its commercially reasonable efforts to see that all of the
Registrable Stock is registered in a selling shareholder registration statement
under the 1933 Act or any form that would also permit the registration of the
Registrable Stock within ninety (90) days after the Effective Date. The Company
further covenants and agrees to keep such registration effective for a period of
not less than one year following the initial effective date of such
registration.
4. Holdback Agreement - Restrictions on Public Sale by Holder. To the extent
not inconsistent with applicable law, each Holder whose Registrable Stock is
included in a registration statement agrees not to effect any public sale or
distribution of the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the 1933 Act, during the
fourteen (14) days prior to, and during the ninety (90) day period beginning on,
the effective date of such registration statement (except as part of the
registration), if and to the extent requested by the Company in the case of a
nonunderwritten public offering or if and to the extent requested by the
managing underwriter or underwriters in the case of an underwritten public
offering.
5. Expenses of Registration. The Company shall bear all expenses incurred in
connection with each registration pursuant to Section 2 and Section 3 of this
Agreement, excluding underwriters' discounts and commissions, but including,
without limitation, all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting fees (including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance), exchange listing fees or National Association of
Securities Dealers fees, messenger and delivery expenses, all fees and expenses
of complying with securities or blue sky laws, fees and disbursements of counsel
for the Company. The selling Holders shall bear and pay the underwriting
commissions and discounts applicable to the Registrable Stock offered for their
account in connection with any registrations, filings and qualifications made
pursuant to this Agreement and the selling Holders shall pay the legal fees of
their counsel connection with such registrations.
6. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify, to the
full extent permitted by law, each Holder, its officers, directors
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and agents and each Person who controls such Holder (within the meaning of
the ▇▇▇▇ ▇▇▇) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained
in any registration statement, prospectus or preliminary prospectus or any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein (in case of a
prospectus or preliminary prospectus, in the light of the circumstances
under which they were made) not misleading. The Company will also indemnify
any underwriters of the Registrable Stock, their officers and directors and
each Person who controls such underwriters (within the meaning of the ▇▇▇▇
▇▇▇) to the same extent as provided above with respect to the
indemnification of the selling Holders.
(b) Indemnification by Holders. In connection with any registration statement
in which a Holder is participating, each such Holder will furnish to the
Company in writing such information with respect to such Holder as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and agrees to indemnify, to the extent
permitted by law, the Company, its directors and officers and each Person
who controls the Company (within the meaning of the ▇▇▇▇ ▇▇▇) against any
losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact or any omission or alleged
omission of a material fact required to be stated in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein (in the case
of a prospectus or preliminary prospectus, in the light of the
circumstances under which they were made) not misleading, to the extent,
but only to the extent, that such untrue statement or omission is contained
in any information with respect to such Holder so furnished in writing by
such Holder. Notwithstanding the foregoing, the liability of each such
Holder under this Section 6(b) shall be limited to an amount equal to the
initial public offering price of the Registrable Stock sold by such Holder,
unless such liability arises out of or is based on willful misconduct of
such Holder.
(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice
of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such Person will claim
indemnification or contribution pursuant to this Agreement and, unless in
the reasonable judgment of such indemnified party, a conflict of interest
may exist between such indemnified party and the indemnifying party with
respect to such claim, permit the indemnifying party to assume the defense
of such claims with counsel reasonably satisfactory to such indemnified
party. Whether or not such defense is assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld). Failure by such Person to provide said notice
to the
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indemnifying party shall itself not create liability except to the
extent of any injury caused thereby. No indemnifying party will consent to
entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect of such
claim or litigation. If the indemnifying party is not entitled to, or
elects not to, assume the defense of a claim, it will not be obligated to
pay the fees and expenses of more than one (1) counsel with respect to such
claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) Contribution. If for any reason the indemnity provided for in this Section
6 is unavailable to, or is insufficient to hold harmless, an indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate
to reflect the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties; and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 6(c), any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
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If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Sections 6(a) and 6(b) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided for in
this Section 6.
7. Participation in Underwritten Registrations. No Holder may participate
in any underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's securities on the basis provided in any underwriting arrangements
approved by the Holders entitled hereunder to approve such arrangements, and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
8. Rule 144. The Company covenants that it will file the reports required to
be filed by it under the 1933 Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations adopted by the Commission thereunder; and
it will take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable such Holder to sell Registrable
Stock without registration under the 1933 Act within the limitation of the
exemptions provided by (a) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
9. Transfer of Registration Rights. The registration rights of any Holder
under this Agreement with respect to any Registrable Stock may be transferred
only to by the Holder; provided that any such transfer must be effected in
accordance with applicable securities laws; provided further, that the
transferring Holder shall give the Company written notice at or prior to the
time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement
are being transferred; provided further, that such transferee shall agree in
writing, in form and substance satisfactory to the Company, to be bound as a
Holder by the provisions of this Agreement; and provided further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by such transferee is restricted under
the 1933 Act.
10. Mergers, Etc. The Company shall not, directly or indirectly, enter into
any merger, consolidation or reorganization in which the Company shall not be
the surviving corporation unless the proposed surviving corporation shall, prior
to such merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Stock" shall be deemed to be references to the
securities which the Holders would be entitled to receive in exchange for
Registrable Stock under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Section 10
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shall not apply in the event of any merger, consolidation or reorganization in
which the Company is not the surviving corporation if each Holder is entitled to
receive in exchange for its Registrable Stock consideration consisting solely of
(i) cash, (ii) securities of the acquiring corporation which may be immediately
sold to the public without registration under the 1933 Act, or (iii) securities
of the acquiring corporation which the acquiring corporation has agreed to
register within ninety (90) days of completion of the transaction for resale to
the public pursuant to the 1933 Act.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Agreement.
(b) Remedies. Each Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive (to the extent permitted by law) the
defense in any action for specific performance that a remedy of law would
be adequate.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained
the written consent of the Holders of at least a majority of the
Registrable Stock then outstanding affected by such amendment,
modification, supplement, waiver or departure.
(d) Successors and Assigns. Except as otherwise expressly provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon
any Person other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas applicable to
contracts made and to be performed wholly within that state, without regard
to the conflict of law rules thereof.
(f) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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(g) Headings. The headings in this Agreement are used for convenience of
reference only and are not to be considered in construing or interpreting
this Agreement.
(h) Notices. Any notice required or permitted under this Agreement shall be
given in writing and shall be delivered in person or by telecopy or by
overnight courier guaranteeing no later than second business day delivery,
directed to (i) the Company at the address set forth below its signature
hereof or (ii) a Holder at the address set forth below its signature
hereof. Any party may change its address for notice by giving ten (10)
days advance written notice to the other parties. Every notice or other
communication hereunder shall be deemed to have been duly given or served
on the date on which personally delivered, or on the date actually
received, if sent by telecopy (followed up by overnight courier) or
overnight courier service, with receipt acknowledged.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in
any way impaired thereby, it being intended that all of the rights and
privileges of the Holders shall be enforceable to the fullest extent
permitted by law.
(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings other than those set forth or referred
to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(k) Recitals. The recitals are hereby incorporated in the Agreement as if
fully set forth herein.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
COMPANY:
VOICE IT WORLDWIDE, INC.,
a Colorado corporation
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
(Signature)
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
(Printed Name)
Title: Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SHAREHOLDER:
APPLIED VOICE RECOGNITION, INC.,
a Utah corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and
Chief Executive Officer
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Registration Rights Agreement
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