EXHIBIT 99.7
NETVOICE TECHNOLOGIES CORPORATION
AND
THE OTHER PARTIES LISTED ON
THE SIGNATURE PAGES HERETO
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
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This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is made and entered into on and as of July 28, 2000 by and
among NetVoice Technologies Corporation, a Nevada corporation (the
"COMPANY"), and the parties listed on the signature pages hereto (each such
party and the Company individually a "PARTY" and collectively, the "PARTIES.")
WHEREAS, on June 30, 2000, the Company and Parties entered
into a Registration Rights Agreement (the "ORIGINAL REGISTRATION RIGHTS
AGREEMENT");
WHEREAS, the Company and the Parties desire to amend and
restate the Original Registration Rights Agreement primarily for the
purpose of adding additional Parties;
WHEREAS, simultaneously with the execution of this Agreement,
the Company has entered into an Amended and Restated Securities Purchase
Agreement of even date herewith, as it may be amended from time to time
(the "SECURITIES PURCHASE AGREEMENT"), among the Company and the other
Parties pursuant to which the Company is issuing the Series A Shares (as
hereinafter defined); and
WHEREAS, it is a condition precedent to the obligation of the
Holders (as hereinafter defined) pursuant to the Securities Purchase
Agreement to purchase the Series A Shares that the Holders be granted the
registration rights provided for herein.
NOW THEREFORE, the Company and the other Parties hereto agree
as follows:
1. DEFINITIONS
In addition to the terms defined elsewhere herein, when used herein
the following terms shall have the meanings indicated:
"COMMISSION" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"COMMON SHARES" shall mean (i) the shares of Common Stock owned of record
by the Holders and (ii) any Common Stock from time to time acquired by the
Holders after the date hereof (in each case subject to adjustment for stock
splits, reverse stock splits, stock dividends, or other similar
transactions involving Common Stock).
"COMMON STOCK" shall mean the common stock, par value U.S. $0.001 per
share, of the Company, and any capital stock of the Company into which such
Common Stock thereafter may be changed.
"COMMON STOCK EQUIVALENTS" shall mean (without duplication with any other
Common Stock or Common Stock Equivalents) rights, warrants, options (other
than any options issued pursuant to the Company's stock option plans),
convertible securities (including the Series A Shares) or
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convertible indebtedness, exchangeable securities or exchangeable
indebtedness, or other rights, exercisable for or convertible or
exchangeable into, directly or indirectly, Common Stock, whether at the
time or upon the occurrence of some future event.
"HOLDERS" shall mean the Persons who purchase Series A Shares pursuant to
the Securities Purchase Agreement, and their respective transferees.
"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in Section 3(a).
"PERSON" shall mean a natural person, corporation, general partnership,
limited partnership, limited liability company, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust,
business trust or other organization, whether or not a legal entity, or a
government or agency or political subdivision thereof.
"REGISTRABLE SHARES" shall mean at any time (i) any Common Shares and (ii)
any shares of Common Stock issuable upon exercise or conversion by the
Holders of any Common Stock Equivalent; PROVIDED, HOWEVER, that Registrable
Shares shall not include any shares (x) the sale of which has been
registered pursuant to the Securities Act and which shares have been sold
pursuant to such registration or (y) which have been sold to the public
pursuant to Rule 144 (or any other similar provision then in force)
promulgated under the Securities Act ("Rule 144").
"SECURITIES ACT" shall mean the United States Securities Act of 1933, as
amended.
"SECURITIES EXCHANGE ACT" shall mean the United States Securities Exchange
Act of 1934, as amended.
"SERIES A SHARES" shall mean shares of Series A Convertible Preferred
Stock, par value $0.001 per share, of the Company.
2. DEMAND REGISTRATION
(a) REQUEST FOR REGISTRATION. At any time after six (6) months from June
30, 2000, a Holder may make a written request to the Company (a
"DEMAND REQUEST"), for the registration under the Securities Act of
all or part of its or their Registrable Shares (a "DEMAND
REGISTRATION") so as to permit a public offering and sale of such
Registrable Shares for up to nine (9) consecutive months; PROVIDED,
HOWEVER, that such six (6) month waiting period shall not be
applicable in the case of short-form registrations on Form S-3 or any
substitute form or forms adopted by the Commission ("SHORT-FORM
REGISTRATIONS"). Such request shall specify the number of
Registrable Shares proposed to be sold and the intended method of
disposition thereof. Upon receipt of such request, the Company shall
promptly (but in any event within ten (10) days after receipt) give
written notice of such registration request to all Holders. Such
Holders shall have the right, by giving written notice to the Company
within 10 days after the receipt of notice from the Company, to elect
to have included in such registration all or part of their
Registrable Shares as such Holders may request in such notice of
election. Each such
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request will also specify the number of Registrable Shares to be
registered and the intended method of disposition thereof. Provided
that (i) Registrable Shares representing at least 20% of the
Registrable Shares then outstanding in the case of a Demand
Registration other than a Short-Form Registration are requested to
be included in such Demand Registration, or (ii) Holders of
Registrable Shares and holders of any other securities of the Company
entitled to inclusion in a Short-Form Registration propose to sell
Registrable Securities and such other securities (if any) at an
aggregate price to the public (before deduction of any underwriters'
discounts or commissions) of at least $5,000,000, the Company shall
use its best efforts to file the Demand Registration within forty-five
(45) days after receiving a Demand Request (the "REQUIRED FILING
DATE") and shall use its best efforts to cause the same to be
declared effective by the Commission as promptly as practicable after
such filing. Notwithstanding the foregoing, in no event shall the
Company be required to effect more than two (2) Demand Registrations
pursuant to this Section 2(a) (which Demand Registrations shall be
at least nine (9) months apart) other than Short-Form Registrations.
Subject to the foregoing provisions, the Holders may make an
unlimited number of Demand Requests for Short-Form Registrations so
long as such Short-Form Registrations are at least twelve (12) months
apart. Notwithstanding the foregoing, if all Registrable Shares
requested to be included in a Demand Registration are not included
in such Demand Registration due to the limitations contained in
Section 2(d) hereof, such registration shall not be counted as one
of the Demand Registrations permitted hereunder.
(b) EFFECTIVE REGISTRATION AND EXPENSES. A registration will not count
as a Demand Registration until it has become effective (unless all
Holders making or joining such request pursuant to Section 2(a) above
(the "REQUESTING HOLDERS") withdraw all their Registrable Shares, in
which case such demand will count as a Demand Registration unless the
Requesting Holders pay all expenses in connection with such withdrawn
registration), provided that if, after it has become effective, an
offering of Registrable Shares pursuant to a registration is
interfered with by any stop order, injunction, or other order or
requirement of the Commission or other governmental agency or court,
such registration will be deemed not to have been effected.
(c) SELECTION OF UNDERWRITERS. If the Holders of a majority of the
Registrable Shares to be registered in a Demand Registration so
elect, the offering of Registrable Shares pursuant to a Demand
Registration shall be in the form of an underwritten public offering.
The Requesting Holders who hold a majority of the Registrable Shares
to be registered in the Demand Registration shall be entitled to
select the investment banking firm or firms to manage the
underwritten offering, which selection shall be subject to the
Company's approval, not to be unreasonably withheld.
(d) PRIORITY ON DEMAND REGISTRATIONS. No securities to be sold for the
account of any Person (including the Company and including any other
holder of capital stock of the Company) other than Requesting Holders
shall be included in a Demand Registration unless (i) the managing
underwriter or underwriters shall advise the Company or the
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Requesting Holders in writing that the inclusion of such securities
will not materially and adversely affect the price or success of the
offering (a "MATERIAL ADVERSE EFFECT") and (ii) the Holders of not
less than a majority of the Registrable Shares held by the Holders
to be covered by such registration (by numbers of shares of Common
Stock of the Company represented by such Registrable Shares on an
as-if-converted basis) shall have consented in writing to the inclusion
of such other securities; PROVIDED, HOWEVER, that such consent
required by clause (ii) shall not be required with respect to the
inclusion of securities for the account of members of the Company's
management representing up to 33% of the total dollar value of
securities to be included in the Demand Registration (the "MANAGEMENT
HOLDERS"). Furthermore, and subject to the immediately preceding
sentence, in the event the managing underwriter or underwriters shall
advise the Company or the Requesting Holders that even after
exclusion of all securities of other Persons (other than the
Management Holders) pursuant to the immediately preceding sentence,
the amount of Registrable Shares proposed to be included in such
Demand Registration by Requesting Holders is sufficiently large to
cause a Material Adverse Effect, the Registrable Shares of Requesting
Holders and Management Holders to be included in such Demand
Registration shall be allocated pro rata among the Requesting Holders
and Management Holders on the basis of the number of Registrable
Shares requested to be included in such Demand Registration by each
such Requesting Holder and Management Holder.
(e) DEFERRAL OF FILING. The Company may defer the filing (but not the
preparation) of a registration statement required by this Section 2
until a date not later than ninety (90) days after the Required
Filing Date if at the time the Company receives the Demand Request:
(i) the Company or any of its Subsidiaries are engaged in
confidential negotiations or other confidential business
activities, disclosure of which would be required in such
Demand Registration (but would not be required if such Demand
Registration were not filed), and the Board of Directors of
the Company determines in good faith that such disclosure
would be materially detrimental to the Company and its
shareholders. A deferral of the filing of a registration
statement pursuant to this Section 2(e) shall be lifted, and
the requested registration statement shall be filed forthwith
if the negotiations or other activities are disclosed or
terminated. In order to defer the filing of a registration
statement pursuant to this Section 2(e)(i), the Company shall
promptly, upon determining to seek such deferral, deliver to
each Requesting Holder a certificate signed by the Chairman
of the Board of the Company stating that the Company is
deferring such filing pursuant to this Section 2(e) and the
basis therefor in such detail as the Company reasonably
believes, after consultation with legal counsel, may be
provided without obligating the Company to make such
disclosure to the public generally. Within twenty (20) days
after receiving such certificate, the holders of a majority
of the Registrable Shares held by the Requesting Holders and
for which registration was previously requested may withdraw
such request by giving
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notice to the Company. If so withdrawn, the Demand Request
shall be deemed not to have been made for all purposes of
this Agreement; or
(ii) the Company is engaged, or has fixed plans to engage within
60 days, in an underwritten primary registration at the time
that a Demand Request is made. Within twenty (20) days after
receiving notification from the Company of such underwritten
primary registration, the holders of a majority of the
Registrable Shares held by the Requesting Holders and for
which registration was previously requested may withdraw such
request by giving notice to the Company. If so withdrawn,
the Demand Request shall be deemed not to have been made for
all purposes of this Agreement. A deferral of the filing of
a registration statement pursuant to this clause of Section
2(e) shall be lifted, and the requested registration
statement shall be filed forthwith upon the effectiveness of
the Company's underwritten primary registration.
The Company may defer the filing of a particular registration
statement pursuant to this Section 2(e) only once and the aggregate number
of days in any 12 month period that the Company may defer all registration
statements pursuant to this Section 2(e) shall not exceed 90.
3. PIGGYBACK REGISTRATION
(a) RIGHT TO PIGGYBACK. If the Company proposes to file a registration
statement under the Securities Act with respect to an equity security
of the Company for its own account or for the account of any of its
security holders (other than pursuant to Section 2 and other than a
registration statement on Form S-4 or S-8 (or any substitute forms
adopted by the Commission)), including in connection with the initial
public offering of Common Stock, then the Company shall give prompt
written notice to the Holders of its intention to effect such a
registration (which notice shall be given not less than thirty (30)
days prior to the anticipated filing date of such registration
statement) and such notice shall offer the Holders who are holders
of Registrable Shares the opportunity to have any or all of their
Registrable Shares included in such registration statement, subject
to the limitations contained in Section 3(b) hereof. The Holders
shall advise the Company in writing within twenty (20) days after the
date of receipt of such notice from the Company of such Holder's
desire to have their Registrable Shares registered under this Section
3. Subject to Section 3(b) below, the Company shall include in such
registration statement all such Registrable Shares so requested to
be included therein pursuant to the piggyback rights granted under
this Section 3(a); PROVIDED, HOWEVER, that the Company may at any
time withdraw or cease proceeding with any such registration if it
shall at the same time withdraw or cease proceeding with the
registration of all other Common Shares originally proposed to be
registered. The Company shall be entitled to select the investment
banking firm or firms to manage any underwritten offering
contemplated by this Section 3(a).
(b) PRIORITY ON REGISTRATIONS. If any managing underwriter advises the
Company in writing that including all the shares of Common Stock
requested to be included in the registration
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by all Persons (including the Company) would have a Material Adverse
Effect, subject to the immediately following sentence, the Company
will be obligated to include in such registration only Common Shares
in the following priority: (i) FIRST, if the registration statement
has been proposed to be filed by the Company for its own account, any
and all Common Stock for sale by the Company, and (ii) SECOND, pro
rata among any security holders of the Company, including members of
management of the Company, holders other than Holders of Registrable
Shares ("OTHER HOLDERS") and the Holders of the Registrable Shares
requesting to be included in the registration based on the number of
shares of Common Stock underlying, on an as-if-converted basis, the
securities and Registrable Shares requested to be included in such
registration by each such Other Holders and Holders, and (iii) THIRD,
in the event that all Common Stock for sale by the Company and all
Registrable Shares requested to be included in such registration
statement by the Holders of Registrable Shares have been included in
such registration, any other Common Stock requested to be included
pursuant to any other registration rights that may hereafter be and
to the extent granted by the Company (pro rata on the basis of the
total number of shares of Common Stock that each holder of such
shares has requested to be registered).
4. MISCELLANEOUS REGISTRATION RIGHTS PROVISIONS
(a) HOLDBACK AGREEMENT. (i) To the extent reasonably requested by the
managing underwriter, each of the Holders agrees not to effect any
public sale or distribution (including pursuant to Rule 144
promulgated under the Securities Act) of any Common Shares or Common
Share Equivalents during the seven days prior to and the 180-day
period beginning on the effective date of any underwritten
registration (except as part of such underwritten registration),
unless (A) the underwriters managing the registered public offering
otherwise agree, (B) the registration is pursuant to a registration
on Form S-4 or Form S-8, (C) the managing underwriter determines not
to proceed with the offering or (D) the Company withdraws the related
registration statement.
(ii) The Company agrees (A) not to effect any public sale or distribution
of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven
days prior to and during the 180-day period beginning on the
effective date of any underwritten registration (except as part of
such underwritten registration or pursuant to a registration on Form
S-4 or Form S-8), unless the underwriters managing the registered
public offering otherwise agree, and (B) to use its best efforts to
cause each officer and director of the Company or any of its
subsidiaries, each holder of Registrable Shares and each other holder
of 5% or more of its equity securities (or any securities convertible
into or exchangeable for such securities), on a fully diluted basis
purchased from the Company at any time (other than in a registered
public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such
securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.
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(iii) Notwithstanding anything herein to the contrary, the Company shall
not be required to file a registration statement fewer than 180 days
after filing any other registration statement other than a
registration statement on Form S-4 or Form S-8.
(b) REGISTRATION PROCEDURES. Whenever the Holders have requested that
any Registrable Shares be registered pursuant to this Agreement, the
Company will use its best efforts to effect the registration and the
sale of such Registrable Shares in accordance with the intended
method of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
(i) prepare and, subject to Section 2(e), file with the
Commission a registration statement on any appropriate form
under the Securities Act, with respect to such Registrable
Shares and use its best efforts to cause such registration
statement to become effective at the earliest possible time
(provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the
Company will furnish to the counsel selected by the holders
of a majority of the Registrable Shares covered by such
registration statement copies of all such documents proposed
to be filed);
(ii) prepare and file with the Commission and notify each seller
of such Registrable Shares immediately after the filing of
such amendments, post-effective 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 a period of not less
than 90 days, in the case of a piggyback registration, or 270
days in the case of a Demand Registration (or such lesser
periods as is necessary for the underwriters in an
underwritten offering to sell unsold allotments) and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such registration statement;
(iii) furnish to each seller of Registrable Shares and the
underwriters of the securities being registered such number
of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits), the
prospectus included in such registration statement (including
each preliminary and summary prospectus) and any other
prospectus filed under Rule 424 or Rule 430-A under the
Securities Act, and such other documents as such seller or
underwriters may reasonably request in order to facilitate
the disposition of the Registrable Shares owned by such
seller or the sale of such securities by such underwriters;
(iv) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such
jurisdictions as the managing underwriter and each seller
reasonably requests, to keep such registration or
qualification in effect for so long as such registration
statement remains in effect, and do any and all
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other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition
of the Registrable Shares owned by such seller in such
jurisdictions (PROVIDED, HOWEVER, that the Company will not
be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (B) consent to general
service of process in any such jurisdiction or (C) subject
itself to any taxation (other than stamp taxes) in any such
jurisdiction);
(v) notify each seller of Registrable Shares promptly after it
shall receive notice thereof, of the time when such
registration statement has become effective;
(vi) notify each seller of Registrable Shares promptly of any
request by the Commission for the amending or supplementing
of such registration statement or prospectus or for
additional information;
(vii) provide a transfer agent and registrar for all Registrable
Shares sold under the registration not later than the
effective date of the registration statement;
(viii) furnish to each Holder participating in the registration a
signed counterpart, addressed to such Holder (a) of an
opinion of counsel as to such matters that are customarily
covered in an opinion of counsel delivered to an underwriter,
including that the registration is valid and effective and
such other matters as such Holder may reasonably request and
(b) of a "cold comfort" letter signed by the independent
public accountants who have issued a report on the Company's
financial statements included in the registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein)
and, in the case of such accountant's letter, with respect to
events subsequent to the date of such financial statements,
as are customarily delivered to underwriters in underwritten
public offerings of securities and such other financial
matters as such Holder may reasonably request;
(ix) advise each seller of such Registrable Shares, promptly after
it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission suspending the
effectiveness of such registration statement or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any common stock included in
such registration statement for sale in any jurisdiction or
the initiation or threatening of any proceeding for such
purpose and promptly use reasonable best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued;
(x) notify each seller of Registrable Shares covered by such
registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act,
upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact
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required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances under which they were made, and at the request
of any such seller promptly prepare, file with the Commission
and to furnish such seller a reasonable number of copies of
a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an
untrue statement of a material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they
were made;
(xi) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of
the Securities Act, and Rule 158 promulgated thereunder and
will furnish to each such seller at least two business days
prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and
shall not file any thereof to which any such seller shall
have reasonably objected on the grounds that such amendment
or supplement does not comply in all material respects with
the requirements of the Securities Act or of the rules or
regulations thereunder;
(xii) use its reasonable best efforts (A) to list all Registrable
Shares covered by such registration statement on any
securities exchange on which similar securities of the
Company are then listed and, if not so listed, to be listed
on the Nasdaq National Market ("NASDAQ MARKET") and, if
listed on the Nasdaq Market, use its reasonable best efforts
to secure designation of all such Registrable Shares covered
by such registration statement as a Nasdaq "National Market
System security" within the meaning of Rule 11Aa2-1 of the
SEC or, failing that, to secure Nasdaq Market authorization
for such Registrable Shares and, without limiting the
generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register
as such with respect to such Registrable Shares with the
National Association of Securities Dealers;
(xiii) enter into such customary agreements (including underwriting
agreements in customary form) and take such other customary
actions as the holders of Registrable Shares or the
underwriters, if any, shall reasonably request in order to
expedite or facilitate the disposition of such Registrable
Shares, (including, without limitation, effecting a stock
split or a combination of shares);
(xiv) make available for inspection by any seller of Registrable
Shares, any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or
underwriter, all
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financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to
supply all information reasonably requested by any such
sellers, underwriter, attorney, accountant or agent in
connection with such registration statement;
(xv) deliver promptly to each Holder participating in an offering
who so requests the file correspondence and memoranda
described below, copies of all correspondence between the
Commission and the Company, its counsel or auditors with
respect to the registration statement and permit each Holder
to do such investigation, upon reasonable advance notice,
with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to
comply with applicable securities laws or the rules and
regulations of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include
reasonable access to books, records and properties and
opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such
Holder shall reasonably request;
(xvi) permit any holder of Registrable Shares which holder, in its
sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company, to
participate in the preparation of such registration or
comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be
included; and
(xvii) use its best efforts to cause such Registrable Shares covered
by such registration statement to be registered with or
approved by such other governmental agencies or authorities
as may be necessary to enable the sellers thereof to
consummate the disposition of such Registrable Shares.
If any such registration or comparable statement refers to any holder
by name or otherwise as the holder of any securities of the Company
and if, in its sole and exclusive judgment, such holder is or might
be deemed to be a controlling person of the Company, such holder
shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such holder and
presented to the Company in writing, to the effect that the holding
by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the
Company's securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference
to such holder by name or otherwise is not required by the Securities
Act or any similar Federal statute then in force, the deletion of the
reference to such holder; provided that with respect to this clause
(ii) such holder shall furnish to the Company an opinion of
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counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Company.
The Company may require each Holder of Registrable Shares to be
included in such registration statement to promptly furnish in
writing to the Company such information regarding the distribution
of the Registrable Shares as the Company may from time to time
reasonably request and any such other information as may be legally
required in connection with such registration.
(c) SUSPENSION OF DISPOSITIONS. Each Holder agrees by acquisition of any
Registrable Shares that, upon receipt of any notice (a "SUSPENSION
NOTICE") from the Company of the happening of any event of the kind
which, in the opinion of the Company, requires the amendment or
supplement of any prospectus, such Holder will forthwith discontinue
disposition of Registrable Shares until such Holder's receipt of the
copies of the supplemented or amended prospectus (which the Company
shall prepare and file as promptly as practicable), or until it is
advised in writing (the "ADVICE") by the Company that the use of the
prospectus may be resumed, and such Holder has received copies of any
additional or supplemental filings which are incorporated by
reference in the prospectus, and, if so directed by the Company, such
Holder will deliver to the Company all copies, other than permanent
file copies then in such Holder's possession, of the prospectus
covering such Registrable Shares current at the time of receipt of
such notice. In the event the Company shall give any such notice, the
time period regarding the effectiveness of registration statements
set forth in Section 4(b)(ii) hereof shall be extended by the number
of days during the period from and including the date of the giving
of the Suspension Notice to and including the date when each seller
of Registrable Shares covered by such registration statement shall
have received the copies of the supplemented or amended prospectus
or the Advice.
(d) REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement including, without
limitation, all registration and filing fees, reasonable fees and
expenses of one legal counsel for all Holders of Registrable Shares
to be included in the registration statement, all fees and expenses
associated with filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD") (including, if
applicable, the fees and expenses of any "qualified independent
underwriter" as such term is defined in Schedule E of the By-Laws of
the NASD, and of its counsel), as may be required by the rules and
regulations of the NASD, fees and expenses of compliance with
securities or "blue sky" laws (including reasonable fees and
disbursements of counsel in connection with "blue sky" qualifications
of the Registrable Shares), all word processing, duplicating and
printing expenses (including expenses of printing certificates for
the Registrable Shares and of printing prospectuses if the printing
of prospectuses is requested by a holder of Registrable Shares),
messenger and delivery expenses, fees and expenses of counsel for the
Company and its independent certified public accountants (including
the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), securities acts liability
insurance (if the
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Company elects to obtain such insurance), the fees and expenses of
any special experts retained by the Company in connection with such
registration, the fees and expenses of underwriters customarily paid
by issuers or sellers of securities (including fees paid to a
qualified independent underwriter but excluding underwriting
discounts and commissions), and the fees and expenses of other
persons retained by the Company (all such expenses being herein
called "REGISTRATION EXPENSES") will be borne by the Company whether
or not any registration statement becomes effective; PROVIDED that
in no event shall Registration Expenses include any underwriting
discounts, commissions, or any out of pocket expenses of the Holders
(or agents who manage their accounts) other than as expressly
provided above.
(e) REQUIREMENTS TO PARTICIPATE No Person may participate in any
registration hereunder unless such Person (x) agrees to sell such
Person's Registrable Shares on the basis provided in any underwriting
arrangements approved by the Company and (y) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents required under the terms of such
underwriting arrangements; PROVIDED, HOWEVER, that no such Person
shall be required to make any representations or warranties in
connection with any such registration other than representations and
warranties as to (i) such Person's ownership of his or its
Registrable Shares to be sold or transferred free and clear of all
liens, claims, and encumbrances, (ii) such Person's power and
authority to effect such transfer, and (iii) such matters pertaining
to compliance with securities laws as may be reasonably requested;
PROVIDED FURTHER, HOWEVER, that the obligation of such Person to
indemnify pursuant to any such underwriting arrangements shall be
several, not joint and several, among such Persons selling
Registrable Shares, and the liability of each such Person will be in
proportion to, and provided further that such liability will be
limited to, the net amount received by such Person from the sale of
his or its Registrable Shares pursuant to such registration.
5. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by law, each seller of Registrable Shares, and each
of its employees, advisors, agents, representatives, partners,
officers, directors and affiliates and each Person who controls such
seller (within the meaning of the Securities Act or the Securities
Exchange Act) (collectively, the "SELLER AFFILIATES") and each other
Person who participated as an underwriter in the offering or sale of
such securities and each of its employees, advisors, agents,
representatives, partners, stockholders, officers, directors and
affiliates and each Person who controls such underwriters (within the
meaning of the Securities Act or the Exchange Act) (i) against any
and all losses, claims, damages, liabilities, and expenses, joint or
several (including, without limitation, reasonable attorneys' fees
except as limited by Section 5(c) below) arising out of or caused by
any untrue or alleged untrue statement of a material fact contained
in any registration statement, preliminary prospectus, final
prospectus, summary prospectus, or any amendment thereof or
supplement thereto if the Company shall have furnished any amendments
or supplements, or any omission or
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<PAGE>
alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) against
any and all loss, liability, claim, damage, and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement
of any litigation or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission or alleged untrue
statement or omission, and (iii) against any and all costs and
expenses (including reasonable fees and disbursements of counsel) as
may be reasonably incurred in investigating, preparing, or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or
alleged untrue statement or omission, to the extent that any such
expense or cost is not paid under subparagraph (i) or (ii) above;
except insofar as the same are made in reliance upon and in strict
conformity with information furnished in writing to the Company by
such seller or any Seller Affiliate for use therein. The
reimbursements required by this Section 5(a) will be made by periodic
payments during the course of the investigation or defense, as and
when bills are received or expenses incurred.
(b) In connection with any registration statement in which a seller of
Registrable Shares is participating, each such seller will furnish
to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the fullest extent
permitted by law, each such seller will indemnify the Company, its
directors, agents, officers and each Person who controls the Company
(within the meaning of Section 15 of the Securities Act or Section
20 of the Securities Exchange Act) to the same extent as the
foregoing indemnity from the Company to the selling Holders, but only
to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission is contained in any information or
affidavit so furnished in writing by such seller or any of its Seller
Affiliates for specific inclusion in such registration statement;
provided that the obligation to indemnify will be several, not joint
and several, among such sellers of Registrable Shares, and the
liability of each such seller of Registrable Shares will be in
proportion to, and provided further that such liability will be
limited to, the net amount received by such seller from the sale of
Registrable Shares pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give
such notice shall not limit the rights of such Person) and (ii)
unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified party; PROVIDED, HOWEVER, that any person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person
unless (X) the indemnifying party has agreed to pay such fees or
expenses, (Y) the indemnifying party shall have failed to assume the
defense
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<PAGE>
of such claim and employ counsel reasonably satisfactory to such
person or (Z) in the reasonable judgment of any indemnified party,
a conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim. An
indemnifying party will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim. If such defense is
assumed by the indemnified party as permitted hereunder, the
indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its written consent
(which consent shall not be unreasonably withheld). If such defense
is assumed by the indemnifying party pursuant to the provisions
hereof, such indemnifying party shall not settle or otherwise
compromise the applicable claim unless (1) such settlement or
compromise contains a full and unconditional release of the
indemnified party from all liabilities arising out of such proceeding
or (2) the indemnified party otherwise consents in writing.
(d) Each Party hereto agrees that, if for any reason the indemnification
provisions contemplated by Section 5(a) or Section 5(b) are
unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities, or expenses
(or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
liabilities, or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect 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 party shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by such
indemnifying party or indemnified party, and the parties' relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Parties hereto agree that
it would not be just and equitable if contribution pursuant to this
Section 5(d) were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in this Section 5(d). The amount paid or
payable by an indemnified party as result of the losses, claims,
damages, liabilities, or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such indemnified party in
connection with investigating or, except as provided in Section 5(c),
defending any such action or claim. Notwithstanding the provisions
of this Section 5(d), no Holder shall be required to contribute an
amount greater than the dollar amount of the net proceeds received
by uch Holder with respect to the sale of any Registrable Shares. No
person 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 guilty of such fraudulent
misrepresentation. The Holders' obligations in this Section 5(d) to
contribute shall be several in proportion to the amount of
Registrable Shares registered by them and not joint.
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<PAGE>
(e) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and will survive the
transfer of securities.
6. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Holders that:
(a) The Company is a corporation duly organized and validly existing and
in good standing under the laws of the State of Nevada, and has
corporate power and corporate authority to own, operate, and lease
its properties and conduct its business as now conducted. The
Company is duly qualified to do business and is in good standing in
all jurisdictions in which the failure to so qualify would have a
material adverse effect on the operations, business, financial
conditions, assets, or liabilities of the Company and its
Subsidiaries, taken as a whole.
(b) The Company has the corporate power and is duly authorized and
empowered to enter into and perform its obligations under this
Agreement. This Agreement has been duly and validly executed, issued,
and delivered and constitutes the legal, valid, and binding
obligation of the Company.
(c) The execution, delivery, and performance of this Agreement by the
Company shall not, by the lapse of time, the giving of notice or
otherwise, constitute a violation of any applicable statute, law,
rule or regulation of any governmental authority, any applicable
provision contained in the articles of incorporation or bylaws of the
Company or contained in any agreement, instrument, or document to
which the Company is a party or by which it is bound, or any order,
ruling, judgment or decree of any court, arbitral body or
governmental authority.
7. COMPLIANCE WITH RULE 144
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
Registrable Shares to the public without registration, at all times, the
Company agrees to:
(a) Make and keep available adequate current public information, as those
terms are understood and defined in Rule 144 under the Securities
Act, at all times after it has become subject to the reporting
requirements of the Securities Exchange Act;
(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 Securities Exchange Act; and
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(c) Furnish to each Holder of Registrable Shares forthwith upon request
a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 ninety (90) days after any
registration statement covering a public offering of securities of
the Company under the Securities Act shall have become effective, and
of the Securities Act and the Securities 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 availing itself of any rule or regulation of the
Commission allowing such Holder to sell any Registrable Shares
without registration.
8. SUBSEQUENT INVESTORS
The Company shall not grant registration rights or enter into any
registration rights agreement or similar agreement with any Person which
are equal to, superior to or conflict, impair or interfere in any way with
the rights granted hereunder, without the consent of Holders, at the time
of determination, of a majority of the Registrable Shares (based on the
number of shares of Common Stock underlying the Registrable Shares on an
as-if converted basis).
9. TERMINATION
The provisions of this Agreement shall terminate upon the date on
which there are no longer any Registrable Shares.
10. NOTICES
All notices and communications to be given or otherwise to be made
to any Party to this Agreement shall be deemed to have been duly given or
delivered by any Party, (i) when received by such Party if delivered by
hand, (ii) upon confirmation when delivered by telecopy, or (iii) within
one day after being sent by recognized overnight delivery service, and in
each case addressed as follows:
If to the Company:
NetVoice Technologies Corporation
13747 Montfort Drive, Suite 250
Dallas, Texas 75240
Telecopy: (927) 788-2995
Attention: President
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<PAGE>
with a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue
Dallas, Texas 75201
Telecopy: (214) 740-8800
Attention: Jack E. Jacobsen, Esq.
If to any Holder, as indicated in the Securities Purchase Agreement.
Any Party by written notice to the other Parties pursuant to this
Section may change the address or the Persons to whom notices or copies
thereof shall be directed.
11. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the Parties and their respective
successors and assigns. No Party may assign any of its rights or
obligations under this Agreement, except in connection with sales and
transfers of Common Shares or Common Share Equivalents made in accordance
with law or to a successor by merger or similar succession to the business
or assets of such Person, in which case the term "Holder" shall be deemed
to include such transferees or successors to the extent provided herein.
12. MODIFICATION
Except as otherwise provided herein, neither this Agreement nor any
provision hereof can be amended, modified, changed, discharged, waived or
terminated (each, an "Amendment") except by an instrument in writing
executed in good faith by the Company and Holders, at the time of
determination, of a majority of Registrable Shares (based on the number of
shares of Common Stock underlying the Registrable Shares on an as-if
converted basis), in which event such Amendment shall be binding upon all
of the Parties in accordance with its terms, PROVIDED, that no such
Amendment shall (i) reduce the number of Demand Registrations provided to
any Holder in Section 2(a), (ii) amend the 20% threshold provided in
Section 2(a), (iii) impose any threshold of Registrable Shares required to
effect a Demand Registration pursuant to Section 2(a)(ii), or (iv) amend
the provisions of Section 8, 9 or this Section 12, unless such Amendment
has been unanimously approved by all Holders.
13. WAIVER
Any waiver by any Party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a Party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that Party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Subject to the
provisions of Section 12 hereof, any waiver must be evidenced by a writing
signed by the Party against whom the waiver is sought to be enforced.
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14. AVAILABILITY OF EQUITABLE REMEDIES
Each Party acknowledges that a breach of the provisions of this
Agreement could not adequately be compensated by money damages.
Accordingly, it is the intention of the Parties that any Party shall be
entitled, in addition to any other right or remedy available to it, to an
injunction restraining such breach or a threatened breach and/or to
specific performance of any such provision of this Agreement, and in either
case no bond or other security shall be required in connection therewith,
and the Parties hereby consent to such injunction and to the ordering of
specific performance.
15. ENTIRE AGREEMENT
This Agreement, together with the Securities Purchase Agreement with
respect to those Parties hereto that are parties thereto as well, sets
forth the entire understanding, and supersedes all prior agreements and
understandings, both written and oral, among the Parties with respect to
the subject matter hereof.
16. SEVERABILITY
If any provision of this Agreement shall be determined to be illegal
or unenforceable by any court of law of competent jurisdiction, the Parties
intend that such provision shall be deemed not to form part of this
Agreement and, the remaining provisions shall be severable and enforceable
in accordance with their terms.
17. GOVERNING LAW
The corporate laws of the State of Nevada will govern all questions
concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity and interpretation of
this Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to principles of conflicts of
laws. The Parties agree that any suit, action or proceeding instituted
against one or more of them with respect to this Agreement (including any
exhibits hereto) shall be brought in any federal or state court located in
the State of New York. The Parties, by the execution and delivery of this
Agreement, irrevocably waive any objection or defense to the institution of
any action in New York based on improper venue, the convenience of the
forum or the jurisdiction of such courts, or from the execution of
judgments resulting therefrom, and the Parties hereto irrevocably accept
and submit to the jurisdiction of the aforesaid courts in any suit, action
or proceeding and consent to the service of process by certified mail at
the address set forth in Section 10 hereof.
18. CAPTIONS
The captions herein are inserted for convenience only and shall not
define, limit, extend or describe the scope of this Agreement or affect the
construction hereof.
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19. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which taken together
shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first set forth above.
NETVOICE TECHNOLOGIES CORPORATION.
By:
-------------------------------------
Name:
Title:
BG MEDIA INTERMEDIATE FUND L.P..*
By: BG MEDIA INTERMEDIATE INVESTORS L.L.C.,
its general partner
By:
-------------------------------------
Name:
Title:
Address for Notices:
399 Park Avenue, 19th Floor
New York, New York 10022
Telecopy: (212) 207-4605
Attention: J. William Grimes
NV INVESTMENTS, L.P.
By: NV GP, L.L.C., its general partner
By:
-------------------------------------
Name:
Title:
_______________
* On behalf of itself and as the Representative of John Backe, J.
William Grimes, Mike Walchonski, Karen Collins, Michael Weiskopf,
Spencer Grimes, Roberta Zipper, Adam Zipper, Al Siegel, William
Lilley, Russ Barry, Foster Devereux, Kevin McGrath, Bruce J. Lieber,
R. Coran Capshaw, Ryan Magrab, Mike Crothers, Paul Yeoham, Dan
Patterson and Roger Mulvihill
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<PAGE>
Address for Notices:
1601 Elm Street
4000 Thanksgiving Tower
Dallas, Texas 75201
Telecopy: (214) 720-1662
Attention: President
PARIBAS NORTH AMERICA, INC.
By:
-------------------------------------
Name:
Title:
Address for Notices:
787 Seventh Avenue
New York, New York 10019
Telecopy: (212) 841-2369
Attention: Gardner Horan
22
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[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
