REGISTRATION RIGHTS AGREEMENT
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This Agreement dated as of February 29, 1996 is entered into by and among Radio
Telephone Systems, Inc. d/b/a Boston Communications Group, a Massachusetts
corporation (the "Company"), and Michael J. Buchel, Zuyus Investment Company,
John M. Freese, Joseph Giegerich, Terence G. Hare III, J. Michael Looney and
John M. Freese, Sr.(the "Initial Stockholders").
WHEREAS, the Company and the Initial Stockholders have entered into a Merger
Agreement of even date herewith (the "Merger Agreement"); and
WHEREAS, the Company and the Initial Stockholders desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933; subject to certain pre-existing
registration rights granted by the Buyer to its current preferred stockholders;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall
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have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
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Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.0l par value per share, of the
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Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
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any similar Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be
in effect.
"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 4.
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"Registrable Shares" means (i) the shares of Common Stock issued or
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issuable to the Stockholders pursuant to the Merger Agreement and any other
shares of Common Stock issued in respect of such shares (because of stock
splits, stock dividends, reclassifications, recapitalizations, or similar
events); provided, however, that shares of Common Stock which are
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Registrable Shares shall cease to be Registrable Shares (i) upon any sale
pursuant to a Registration Statement or Rule 144 under the Securities Act
or (ii) upon any sale in any manner to a person or entity which, by virtue
of Section 12 of this Agreement, is not entitled to the rights provided by
this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Stockholders" means the Initial Stockholders and any persons or entities
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to whom the rights granted under this Agreement are transferred by any
Initial Stockholders, their successors or assigns pursuant to Section 12
hereof.
2. Registration Rights.
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(a) Whenever the Company proposes to file a Registration Statement at any
time and from time to time, it will, prior to such filing, give written
notice to all Stockholders of its intention to do so and, upon the written
request of a Stockholder or Stockholders given within 20 days after the
Company provides such notice, the Company shall use its best efforts to
cause all Registrable Shares which the Company has been requested by such
Stockholder or Stockholders to register to be registered under the
Securities Act; provided that the Company shall have the right to postpone
or withdraw any registration effected pursuant to this Section 2 without
obligation to any Stockholder, and that the right of the Stockholders to
participate in such a registration shall be subject to and in accordance
with the registration rights granted by the Buyer to its current preferred
stockholders prior to the date of this Agreement.
(b) In connection with any registration under this Section 2 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such registration unless the holders thereof accept the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it (provided that such terms must be consistent with this
Agreement). If in the opinion of the managing underwriter it is
appropriate because of marketing factors to limit the number of Registrable
Shares to be included in the offering, then the Company shall be required
to include in the registration only that number of Registrable Shares, if
any, which the managing underwriter believes should be included therein;
provided that no reduction in the number of Registrable Shares to be
included in the offering shall be made unless such reduction represents a
proportionate reduction which is no greater than the proportionate
reduction of shares of Common Stock requested to be included in the
registration by other holders of securities entitled to registration who
are officers of the Buyer.
3. Registration Procedures. If and whenever the Company is required by the
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provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the commission any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any
other offering, until the earlier of the sale of all Registrable Shares
covered thereby or 120 days after the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder such
reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and
such other documents as the selling Stockholder may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under
the securities or Blue Sky laws of such states as the selling Stockholders
shall reasonably request, and do any and all other acts and things that may
be necessary or desirable to enable the selling Stockholders to consummate
the public sale or other disposition in such states of the Registrable
Shares owned by the selling Stockholder; provided, however, that the
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Company shall not be required in connection with this paragraph (d) to
qualify as a foreign corporation or execute a general consent to service of
process in any Jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall
promptly notify the selling Stockholders and, if requested, the selling
Stockholders shall immediately cease making offers of Registrable Shares
and return all prospectuses to the Company. The Company shall promptly
provide the selling Stockholders with revised prospectuses and, following
receipt of the revised prospectuses, the selling Stockholders shall be free
to resume making offers of the Registrable Shares.
4. Allocation of Expenses. The Company will pay all Registration Expenses of
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all registrations under this Agreement. For purposes of this Section 4, the
term "Registration Expenses" shall mean all expenses incurred by the Company in
Complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company, and the expense of any special audits incident to or
required by any such registration, but excluding underwriting discounts, selling
commissions and the fees and expenses of selling Stockholders' counsel.
5. Indemnification and Contribution.
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(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities
Act or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such seller, underwriter or controlling person
may become subject under the Securities Act, the Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect i thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement,
or arise out of or are based upon the omission or alleged omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such
seller, underwriter and each such controlling person for any legal or any
other expenses reasonably incurred by such seller, underwriter or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
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Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in
such Registration Statement, preliminary prospectus or final prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of such
seller, underwriter or controlling person specifically for use in the
preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers, underwriter or
controlling person may become subject under the Securities Act, Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under
which such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information relating to such seller
furnished in writing to the Company by or on behalf of such seller
specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment or supplement;
provided, however, that the obligations of such Stockholders hereunder
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shall be limited to an amount equal to the proceeds to each Stockholder of
Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided, that
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counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld); and, provided, further, that
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the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Section 5. The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall pay
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such expense if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other
party represented by such counsel In such proceeding. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with
the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect of such claim or litigation, and
no Indemnified Party shall consent to entry of any judgment or settle such
claim or litigation without the prior written consent of the Indemnifying
Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any
holder of Registrable Shares exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required
on the part of any such selling Stockholder or any such controlling person
in circumstances for which indemnification is provided under this Section
5; then, in each such case, the Company and such Stockholder will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportions so
that such holder is responsible for the portion represented by the
percentage that the public offering price of its Registrable Shares offered
by the Registration Statement bears to the public offering price of all
securities offered by such Registration Statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
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case, (A) no such holder will be required to contribute any amount in
excess of the proceeds to it of all Registrable Shares sold by it Pursuant
to such Registration Statement, and (B) no person or entity guilty of
fraudulent misrepresentation, within the meaning of Section 11(f) of the
Securities Act, shall be entitled to contribution from any person or entity
who is not guilty of such fraudulent misrepresentation.
6. Information by Holder. Each Stockholder including Registrable Shares in
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any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
7. "Stand-Off" Agreement. Each Stockholder, if requested by the Company and
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the managing underwriter of an offering by the company of Common Stock or other
securities of the Company pursuant to a Registration Statement, shall agree not
to sell publicly or otherwise transfer-or dispose of any Registrable Shares or
other securities of the Company held by such Stockholder for a specified period
of time (not to exceed 180 days) following the effective date of such
Registration Statement; -provided, that:
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(a) such agreement sh all only apply to the first Registration Statement
covering Common Stock to be sold on its behalf to the public in an
underwritten offering; and
(b) all Stockholders holding not less than the number of shares of
Common Stock held by such Stockholder (including shares of Common Stock
issuable upon the conversion of Shares, or other convertible securities, or
upon the exercise of options, warrants or rights) and all officers and
directors of the Company enter into similar agreements.
8. Rule 144 Requirements. After the earliest of (i) the closing of the sale
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of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities Act
with respect to current public information about the Company;
(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 Exchange Act (at any time after it has become
subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a written
statement by the Company as to its compliance with the requirements of said
Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of
the Company, and (iii) such other reports and documents of the Company as
such holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities
without registration.
9. Termination. All of the Company's obligations to register Registrable
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Shares under this Agreement shall terminate on the tenth anniversary of this
Agreement.
10. Transfers of Rights. This Agreement, and the rights and obligations of
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each Initial Stockholder hereunder, may be assigned by such Initial Stockholder
to any person or entity to which Shares are transferred by such Initial
Stockholder, and such transferee shall be deemed an "Initial Stockholder" for
purposes of this Agreement; provided that the transferee provides written notice
of such assignment to the Company.
11. General.
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(a) Notices. All notices, requests, consents, and other communications
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under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at Boston Communications Group, One McKinley Square, 3rd
Floor, Boston, MA 02109, Attention: Alan J. Bouffard, Esq., or at such
other address or addresses as may have been furnished in writing by the
Company to the Stockholders, with a copy to Thomas L. Barrette, Jr., Esq.,
Hale and Dorr, 60 State Street, Boston, MA 02109; or
If to a Stockholder, at his or its address set forth below his signature,
or at such other address or addresses as may have been furnished to the
Company in writing by such Stockholder, with a copy to John M. Freese, Sr.,
Esq., Freese & March, P.A., 4310 East 31st Street, Tulsa, OK 74135.
Notices provided in accordance with this Section 11(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the
mail.
(b) Entire Agreement. This Agreement embodies the entire agreement and
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understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to
such subject matter.
(c) Amendments and Waivers. Any term of this Agreement may be amended and
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the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of
at least 60% of the Registrable Shares; provided, that this Agreement may
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be amended with the consent of the holders of less than all Registrable
Shares only in a manner which affects all Registrable Shares in the same
fashion. No waivers of or exceptions to any term, condition or provision
of this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
(d) Counter-parts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of
which shall he one and the same document.
(e) Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the Commonwealth of Massachusetts.
Executed as of the date first written above.
COMPANY:
RADIO TELEPHONE SYSTEMS, INC.
By: /s/ George K. Hertz
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Title: President and Chief Executive Officer
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INITIAL STOCKHOLDERS:
/s/ Michael J. Buchel
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Michael J. Buchel
Voice Systems Technology Inc.
1874 East Route 20 Suite 8
Cherry Hill, NJ 08003
Zuyus Investment Company
By: /s/ Peter T. Zuyus, Sr.
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Peter T. Zuyus, Sr.
Voice Systems Technology, Inc.
621 East Fourth
Tulsa, OK 74120-3017
/s/ John M.Freese
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John M.Freese
Freese & March, P.A.
4310 East 31st Street
Tulsa, Oklahoma 74135
/s/ Peter T. Zuyus, Jr.
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Peter T. Zuyus, Jr.
Voice Systems Technology Inc.
621 East Fourth
Tulsa, OK 74120-3017
/s/ Joseph Giegerich
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Joseph Giegerich
Voice Systems Technology Inc.
1874 East Route 20, Suite 8
Cherry Hill, NJ 08003
/s/ Terrence G. Hare III
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Terrence G. Hare III
Voice Systems Technology Inc.
621 East Fourth
Tulsa, OK 74120-3017
/s/ J. Michael Looney
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J. Michael Looney
Voice Systems Technology Inc.
621 East Fourth
Tulsa, OK 74120-3017