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,
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all 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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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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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
such 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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(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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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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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first set forth above.
NETVOICE TECHNOLOGIES CORPORATION.
By: /s/ Jeff Rothell
-----------------------------------
Name: Jeff Rothell
Title:
BG MEDIA INTERMEDIATE FUND L.P..*
By: BG MEDIA INTERMEDIATE INVESTORS L.L.C.,
its general partner
By: /s/ J. William Grimes
------------------------------------
Name: J. William Grimes
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: /s/ Thomas J. Fowler
------------------------------------
Name: Thomas J. Fowler
Title: Manager
------------------------
* 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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Address for Notices:
1601 Elm Street
4000 Thanksgiving Tower
Dallas, Texas 75201
Telecopy: (214) 720-1662
Attention: President
PARIBAS NORTH AMERICA, INC.
By: /s/ Donna M. Kiernan
---------------------------------
Name: Donna M. Kiernan
Title: Chief Financial Officer
Address for Notices:
787 Seventh Avenue
New York, New York 10019
Telecopy: (212) 841-2369
Attention: Gardner Horan
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[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
