Ex-4.8 Preffered Shares Rights Agreement



 






Exhibit 4.8




AMENDMENT

to the

AMENDED AND RESTATED

PREFERRED SHARES RIGHTS AGREEMENT

between

SCANSOFT, INC.

and

U.S. STOCK TRANSFER CORPORATION




     This Amendment (the “Amendment”) to the Amended and Restated Preferred Shares Rights Agreement
is made and entered into as of May 5, 2005 between SCANSOFT, INC., a Delaware corporation (the
“Company”), and US STOCK TRANSFER CORPORATION, as Rights Agent (the “Rights Agent”).



B A C K G R O U N D




     WHEREAS, the Company and the Rights Agent entered into a Preferred Shares Rights Agreement
dated as of October 23, 1996, which was amended and restated on March 15, 2004 (the “Rights
Agreement”);



     WHEREAS, Section 27 of the Rights Agreement provides that, in certain circumstances, the
Company may supplement or amend the Rights Agreement without the approval of any holders of Rights;



     WHEREAS, the Company has agreed to issue and sell shares of the Company’s Common Stock and
warrants to acquire shares of the Company’s Common Stock to Warburg Pincus Private Equity VIII,
L.P. and certain of its affiliated entities (collectively, “Warburg Pincus”) in a series of
transactions (the “Warburg Financing”), such that Warburg Pincus will Beneficially Own up to
41,032,317 shares of the Company’s Common Stock following the completion of the Warburg Financing;



     WHEREAS, on May 3, 2005, the Board of Directors of the Company resolved to amend the Rights
Agreement to permit the transactions contemplated by the Warburg Financing; and



     WHEREAS, the Company desires to modify the terms of the Rights Agreement in certain respects
as set forth herein, and in connection therewith, is entering into this Amendment and directing the
Rights Agent to enter into this Amendment;



     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:



     1. Effect of Amendment. Except as expressly provided herein, the Rights Agreement
shall be and remain in full force and effect.



 









 





     2. Capitalized Terms. All capitalized, undefined terms used in this Amendment shall
have the meanings assigned thereto in the Rights Agreement.



     3. Supplement to Definitions. The definitions contained in Section 1 of the Rights
Agreement shall be supplemented by adding the following:



          “Maximum Permitted Amount” shall mean, at any time, an amount equal to the sum of (i) the
Permitted Amount (as defined in the Stockholders Agreement) and (ii) 42,000,000 (as adjusted for
stock splits, stock dividends, reverse stock splits and the like) Common Shares.




          “Stockholders Agreement” shall mean the Amended and Restated Stockholders Agreement, dated as
of May 5, 2005, to which the Company is a party, as amended from time to time.




          “Warburg Pincus” shall mean the Purchasers (as defined in the Securities Purchase Agreement).




     4. Amendment to Section 1(a). Section 1(a) of the Rights Agreement is hereby amended
by adding the following immediately after the first sentence of Section 1(a) and immediately
preceding the second sentence of Section 1(a):



          “Notwithstanding anything in this Agreement to the contrary, neither Warburg Pincus nor any of
their Affiliates or Associates shall be deemed an Acquiring Person by virtue of (i) the execution,
delivery or performance of that Securities Purchase Agreement dated May 5, 2005 (as may be amended
from time to time, the “Securities Purchase Agreement”) to which the Company is a party or
(ii) becoming the Beneficial Owner of any shares of Common Stock thereunder, in each case, if,
immediately following such event, Warburg Pincus and/or any of their Affiliates or Associates
Beneficially Own 24,500,000 Common Shares (as adjusted for stock splits, stock dividends, reverse
stock splits and the like) plus the Permitted Amount or less. Notwithstanding anything in this
Agreement to the contrary, neither Warburg Pincus nor any of their Affiliates or Associates shall
be deemed an Acquiring Person by virtue of (i) the execution, delivery or performance of that Stock
Purchase Agreement dated May 5, 2005 (as may be amended from time to time, the “Stock Purchase
Agreement”) to which the Company is a party or (ii) becoming the Beneficial Owner of any Common
Shares thereunder, in each case, if, immediately following such event, the number of Common Shares
beneficially owned by Warburg Pincus and/or any of their Affiliates or Associates is less than or
equal to the Maximum Permitted Amount. In addition, neither Warburg Pincus nor any of their
Affiliates or Associates shall be deemed an Acquiring Person by virtue of becoming the Beneficial
Owner of any securities that are included in the Permitted Amount ( the “Permitted
Securities”).”




     5. Effective Date. This Amendment is effective as of May 5, 2005, immediately prior
to the execution of the Securities Purchase Agreement.



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     6. Governing Law. This Amendment shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware without reference to the conflicts or choice of
law principles thereof.



     7. Counterparts. This Amendment may be executed in separate counterparts, each of
which when executed and delivered is an original but all of which taken together constitute one and
the same instrument.



     8. Fax Transmission. A facsimile, telecopy or other reproduction of this Amendment
may be executed by one or more parties hereto, and an executed copy of this Amendment may be
delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original of the Amendment
as well as any facsimile, telecopy or other reproduction thereof.



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     IN WITNESS WHEREOF, the Company and the Rights Agent have caused this Amendment to be duly
executed as of the day first above written.



	 	 	 	 	 
	 	 	SCANSOFT, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ James R. Arnold
	

	 	 	 	 
	 	 	Name: James R. Arnold, Jr.
	 	 	Title: Senior Vice President and Chief Financial
	

	 	 	Officer
	 
	 	 	 	 
	 	 	US STOCK TRANSFER CORPORATION
	 	 	as Rights Agent
	 
	 	 	 	 
	

	 	By:	 	/s/ Mark Cano
	

	 	 	 	 
	 
	 	 	 	 
	

	 	Name:	 	Mark Cano
	

	 	 	 	 
	 
	 	 	 	 
	

	 	Title:	 	Senior Vice President
	

	 	 	 	 







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