REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into this 18th day of November, 1999, by and among FIDATA Equity
Partners, L.P., Southwest Business Corporation, Xxx Xxx and Xxxxxxx Xxxxxxx
(collectively, the "Shareholders"), and Billing Concepts Corp., a Delaware
corporation ("BCC" or the "Company").
This Agreement is entered into in connection with that certain Plan of
Reorganization, Merger and Acquisition Agreement (the "Merger Agreement")
among the parties hereto of even date herewith (the "Closing Date"), pursuant
to which, among other things, the Company issued to the Shareholders an
aggregate of 1,100,000 shares (the "Shares") of the common stock, par value
$0.01 per share ("Common Stock"), of the Company. The Merger Agreement
provides that the Company and the Shareholders will enter into this
Agreement. Capitalized terms used herein but not defined herein shall have
the meaning ascribed to them in the Merger Agreement, unless the context
requires otherwise.
IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. REGISTRATION. BCC shall be obligated to the Shareholders as
follows:
1.1 REGISTRATION RIGHTS. As soon after the Closing Date as is
reasonably practicable, but in no event more than 15 days from the Closing
Date, BCC will, if it is a registrant entitled to use Form S-3 to register
the Shares held by the Shareholders, file a registration statement on Form
S-3 (or any successor to Form S-3), or, if BCC is ineligible to file such
registration statement on Form S-3, then Form S-1 (or any successor to Form
S-1), with the Securities and Exchange Commission (the "SEC") and such
applications or other filings as required under applicable state securities
or blue sky laws sufficient to permit the public offering of the Shares held
by the Shareholders (including the Holdback Shares) to be made on a
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"), and shall use its best efforts to cause such
registration statement to be declared effective within 45 days from the
Closing Date, so that the Shares held by the Shareholders will be registered
for the offering on such Form; provided, however, that BCC shall be obligated
to file only one such registration statement on Form S-3 under this SECTION 1.1.
Notwithstanding the foregoing, BCC shall not be obligated to effect a
registration pursuant to this SECTION 1.1: (i) in any particular jurisdiction
in which BCC would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance unless
BCC is already subject to service in such jurisdiction and except as may be
required by the Securities Act; and (ii) if BCC shall furnish to each
Shareholder a certificate signed by the President of BCC stating that in the
good faith judgment of the Board of Directors the filing of a registration
statement would require the disclosure of material information that BCC has a
bona fide business purpose for preserving as confidential and that is not
then otherwise required to be disclosed, in which case BCC's obligation to
use its best efforts to file a registration statement shall be deferred for a
period not to exceed 60 days from the receipt of such certificate by the
Shareholders.
1.2 REGISTRATION PROCEDURES AND EXPENSES. If and whenever BCC is
required to include the Shares held by the Shareholders in a registration
statement under the Securities Act, as provided in SECTION 1.1 hereof, BCC
shall, as expeditiously as is reasonably practicable, do each of the
following:
(a) prepare and file with the SEC a registration statement with
respect to the Shares held by the Shareholders and, subject to the
limitations under SECTION 1.1 hereof, use its best efforts to cause such
registration statement to become effective and remain effective as provided
herein;
(b) cooperate with the Shareholders and any underwriter who shall
sell the Shares held by the Shareholders in connection with their review of
BCC made in connection with such registration;
(c) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective until the
earlier to occur of the sale of all of the Shares by the Shareholders and
the date 30 days following the first anniversary of the effectiveness of the
registration statement, and to comply with the provisions of the Securities
Act and the Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to the disposition of all the Shares covered by such registration
statement for such period;
(d) furnish to the Shareholders such number of copies of the
prospectus forming a part of such registration statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as the Shareholders may reasonably
request in order to facilitate the disposition of the Shares; and
(e) notify the Shareholders at any time when a prospectus relating to
the Shares is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus forming a part of
such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing, and at the request of the Shareholders,
prepare and furnish to the Shareholders a reasonable number of copies of any
supplement to or any amendment of such prospectus that may be necessary so
that, as thereafter delivered to the purchasers of the Shares, such
prospectus shall not include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing.
1.3 AGREEMENT BY THE SHAREHOLDERS. In the event that a Shareholder
participates, pursuant to this ARTICLE 1, in the offering of the Shares, such
Shareholder shall:
(a) furnish BCC all material information reasonably requested by BCC
concerning the Shareholder and the proposed method of sale or other
disposition of the Shares and such other information and undertakings as
shall be reasonably required in connection with the preparation and filing of
the registration statement covering the Shares in order to ensure full
compliance with the Securities Act and the rules and regulations of the SEC
thereunder;
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(b) cooperate in good faith with BCC and its underwriters, if any, in
connection with such registration, including placing the Shares in escrow or
custody to facilitate the sale and distribution thereof, provided that such
escrow or custody arrangement shall be no more restrictive upon the
Shareholder than upon any other holder of BCC Stock for the benefit of whom
such registration is undertaken; and
(c) make no further sales or other dispositions, or offers therefor,
of the Shares under such registration statement if, during the effectiveness
of such registration statement, an intervening event should occur which, in
the opinion of counsel to BCC, makes the prospectus included in such
registration statement no longer comply with the Securities Act, so long as
written notice containing the facts and legal conclusions relied upon by BCC
in this regard has been received by the Shareholder from BCC, until such time
as the Shareholder has received from BCC copies of a new, amended or
supplemented prospectus complying with the Securities Act, which prospectus
shall be delivered to the Shareholder by BCC within 20 days after such
notice.
1.4 ALLOCATION OF EXPENSES. If and whenever BCC is required by the
provisions of this ARTICLE 1 to use its best efforts to effect the
registration of the Shares under the Securities Act, BCC shall pay the costs
and expenses in connection therewith, other than the attorneys' fees of the
Shareholders; provided, however, that the Shareholders shall pay all
underwriting discounts, selling commissions and stock transfer taxes
attributable to the Shares under such registration statement.
1.5 INDEMNIFICATION. (a) In the event of any registration of any of
the Shares under the Securities Act pursuant to this ARTICLE 1, each
Shareholder shall severally and not jointly indemnify and hold harmless BCC,
each director of BCC, each officer of BCC who shall sign such registration
statement, each underwriter and any person who controls BCC or such
underwriter within the meaning of the Securities Act, and BCC's accountants
and legal counsel, against all expenses, claims, losses, damages and
liabilities (or actions or proceedings in respect thereof) including any of
the foregoing incurred in settlement of any litigation, commenced or
threatened, with respect to any untrue statement of any material fact in, or
omission of any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading from such registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, if such statement or omission was made in reliance upon
and in conformity with written information furnished to BCC or its
underwriter through an instrument duly executed by or on behalf of the
Shareholder specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus or amendment or
supplement. In no event shall the liability of any Shareholder hereunder be
greater than the gross proceeds received by such Shareholder upon the sale of
his or its Shares.
(b) BCC will indemnify each Shareholder, his or its legal counsel and
accountants and each person controlling the Shareholder within the meaning of
Section 15 of the Securities Act, and each officer and director of each
Shareholder with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any,
and each person who controls any underwriter within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions or proceedings in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or
threatened,
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arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any registration statement, prospectus,
offering circular or other document, or any amendment or supplement thereof,
incident to any such registration, qualification or compliance, or arising
out of or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading, provided that BCC will not be liable to indemnify the
Shareholder or underwriter in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to BCC by
an instrument duly executed by or on behalf of the Shareholder or underwriter
and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this SECTION 1.5
(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 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 unreasonably be withheld). Without limiting the generality of the
foregoing, the Indemnified Party may withhold its consent to any such counsel
who also acts as counsel to the Indemnifying Party (with respect to such
claim or otherwise) if the Indemnified Party reasonably believes that there
exists a conflict of interest between the Indemnified Party and the
Indemnifying Party, with respect to such claim or litigation. In such event,
the Indemnifying Party shall bear the expense of another counsel who shall
represent the Indemnified Party and any other persons or entities who have
indemnification rights from the Indemnifying Party hereunder, with respect to
such claim or litigation, and shall be selected as provided in the first
sentence of this SECTION 1.5(c). The Indemnified Party may participate in
such defense at such party's expense (except to the extent that the
Indemnifying Party is required to pay the expense of such counsel pursuant to
this SECTION 1.5(c)), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless such
failure is prejudicial to the Indemnifying Party in defending such claim or
litigation. 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 with respect to such
claim or litigation.
(d) If the indemnification provided for in this SECTION 1.5 is held
by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred
to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, liability, claim, damage
or expense in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
of the Indemnified Party shall be determined by reference to, among
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other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by or on behalf of the Indemnifying Party or by the Indemnified Party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement, if signed by the Shareholders, shall control.
1.6 COMPLIANCE WITH RULE 144. At the request of any Shareholder who
proposes to sell securities in compliance with Rule 144, BCC shall, to the
extent necessary to enable such Shareholder to comply with such Rule 144, (y)
forthwith furnish to such Shareholder a written statement of compliance with
the filing requirements of the SEC as set forth in Rule 144 and (z) use
reasonable efforts to make available to the public and such Shareholder such
information as will enable the Shareholders to make sales pursuant to Rule
144.
1.7 ASSIGNABILITY OF REGISTRATION RIGHTS. The rights set forth in
this Agreement shall accrue to each subsequent holder of at least 5,000
Shares who shall have executed a written consent agreeing to be bound by the
terms and conditions of this Agreement as a party to this Agreement.
2. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. All
indemnifications, representations and warranties made by any Shareholder
hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing regardless of any investigation
at any time made by or on behalf of BCC. The covenants and agreements made
by the Shareholders hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall continue until all obligations with
respect thereto shall have been performed or satisfied or shall have been
terminated in accordance with their terms.
3. GENERAL PROVISIONS.
3.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS. This Agreement
shall be governed by and construed and enforced in accordance with the laws
of the State of Texas without regard to conflict-of-laws rules as applied in
Texas. The section headings contained herein are for purposes of convenience
only and shall not be deemed to constitute a part of this Agreement or to
affect the meaning or interpretation of this Agreement in any way.
3.2 SEVERABILITY. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or
the State of Texas, or under any other applicable laws of any other
jurisdiction, then the parties hereto agree that such provision shall be
deemed modified for purposes of performance of this Agreement in such
jurisdiction to the extent necessary to render it lawful and enforceable, or
if such a modification is not possible without materially altering the
intention of the parties hereto, then such provision shall be severed
herefrom for purposes of performance of this Agreement in such jurisdiction.
The validity of the remaining
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provisions of this Agreement shall not be affected by any such modification
or severance, except that if any severance materially alters the intentions
of the parties hereto as expressed herein (a modification being permitted
only if there is no material alteration), then the parties hereto shall use
commercially reasonable efforts to agree to appropriate equitable amendments
to this Agreement in light of such severance.
3.3 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, arrangements and understandings
related thereto.
3.4 BINDING EFFECT. All the terms, provisions, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective heirs,
executors, administrators, representatives, successors and assigns.
3.5 AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, provisions, representations,
warranties, covenants or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver, by
the party waiving compliance. The failure of any party at any time or times
to require performance of any provision hereof shall in no manner affect the
right to enforce the same. No waiver by any party of any condition contained
in this Agreement, or of the breach of any term, provision, representation,
warranty or covenant contained in this Agreement, in any one or more
instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach, or as a waiver of any other condition
or of the breach of any other term, provision, representation, warranty or
covenant.
3.6 GENDER; NUMBERS. All references in this Agreement to the
masculine, feminine or neuter genders shall, where appropriate, be deemed to
include all other genders. All plurals used in this Agreement shall, where
appropriate, be deemed to be singular, and VICE VERSA.
3.7 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This
Agreement shall be binding when one or more counterparts hereof, individually
or taken together, shall bear the signatures of the parties reflected hereon
as signatories.
3.8 TELECOPY EXECUTION AND DELIVERY. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement 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 this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
3.9 CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this
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Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The word "including" shall mean
including without limitation.
3.10 REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by
such party.
3.11 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be personally
delivered or sent by reliable overnight express delivery (such as Federal
Express). Any such notice, request, consent or other communication shall be
deemed delivered at such time as it is personally delivered on a business
day, or on the date of actual, prepaid delivery on a business day by a
reliable overnight express delivery service, as the case may be. The address
for all notices, requests, consents and other communications hereunder to be
delivered or sent to any Shareholder shall be to such Shareholder's address
as set forth on the records of the Company. The address for all notices,
requests, consents and other communications hereunder to be delivered or sent
to any Shareholder shall be to such Shareholder's address as set forth in the
Company's records. The address for all notices, requests, consents and other
communications hereunder to the Company shall be delivered or sent to the
following:
Billing Concepts Corp.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000-0000
Telephone (000) 000-0000
Facsimile (000) 000-0000
Attention: W. Xxxxx Xxxx, Esq.
Senior Vice President, General
Counsel and Corporate Secretary
With copy to (which shall not constitute notice):
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement in multiple original counterparts as of the day and year
first above written.
SHAREHOLDERS:
FIDATA EQUITY PARTNERS, L.P.
By: First Advisors, Inc.,
General Partner
By:
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Name:
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Title:
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and
By: Xxxx Assets Advisors,
General Partner
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SOUTHWEST BUSINESS CORPORATION
By:
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Name:
-----------------------------------
Title:
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Xxx Xxx, Individually
----------------------------------------
Xxxxxxx Xxxxxxx, Individually
BILLING CONCEPTS CORP.
By:
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Xxxxxx X. Xxxxxx, Xx.
Chairman of the Board and
Chief Executive Officer
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