SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT
THIS SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is entered into as of April 7, 1998, by and between ATC
Communications Group, Inc., a Delaware corporation (the "COMPANY"), and Xxxxxx
Equity Investors III, L.P., a Delaware limited partnership ("XXXXXX").
RECITALS
A. On the date hereof, Xxxxxx has delivered its commitment letter (the
"COMMITMENT LETTER") to the Company and Advanced Telemarketing Corporation, the
Company's wholly owned subsidiary ("ADVANCED"), pursuant to which Xxxxxx has
committed to either guaranty up to $2.0 million of Advanced's indebtedness or,
in lieu thereof and under certain circumstances, to make a loan to Advanced in
the amount of up to $2.0 million.
B. It is a condition to the issuance of Xxxxxx'x commitments under the
Commitment Letter that the Company execute and deliver this Agreement to Xxxxxx.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. Unless the context otherwise requires, the terms defined
in this Section 1 shall have the meanings herein specified for all purposes of
this Agreement, applicable to both the singular and plural forms of any of the
terms herein defined.
"AGREEMENT" means this Securities Purchase and Registration Rights
Agreement.
"BOARD" means the Board of Directors of the Company.
"COMMON STOCK" means the common stock, $.01 par value, of the Company.
"COMMISSION" means the Securities and Exchange Commission.
"EQUITY SECURITY" means any stock or similar security of the Company or any
security (whether stock or indebtedness for borrowed money) convertible or
exchangeable, with or without consideration, into or for any stock or similar
security, or any security (whether or not indebtedness for borrowed money)
carrying any warrant or right to subscribe to or purchase any stock or similar
security, or any such warrant or right.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" of any security means the record or beneficial owner of such
security. A Holder of the Warrant shall be treated as the Holder of the
Registrable Securities underlying such Warrant.
"HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES" means the Person or
Persons who are the Holders of greater than 50% of the shares of Registrable
Securities then outstanding.
"INITIATING HOLDERS" means with respect to a registration effected pursuant
to Section 4 hereof the Holders of at least 200,000 shares of the Registrable
Securities.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
community property interest, trust, option, lien or charge of any kind,
including, without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction and including any lien or charge arising by statute or other law.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger dated
April 7, 1998 by and among the Company, ATC Merger Sub, Inc. and IQI, Inc.
"PERSON" includes any natural person, corporation, trust, association,
company, partnership, limited liability company, joint venture and other entity
and any government, governmental agency, instrumentality or political
subdivision.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means (1) shares of the Common Stock issued or
issuable upon exercise or conversion of the Warrant issued pursuant to this
Agreement, so long as they are owned by Xxxxxx, any limited partner of Xxxxxx or
any affiliate (as defined under the Securities Act) of Xxxxxx or Xxxxxx'x
general partner, and (2) any securities issued or issuable with respect to the
Common Stock referred to in clause (1) above by way of a stock dividend or stock
split or in connection with a combination of shares, reclassification,
recapitalization, merger or consolidation or reorganization; provided, however,
that such shares of Common Stock shall only be treated as Registrable Securities
if and so long as they have not been (i) sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction, or
(ii) sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect to such Common Stock
are removed upon the consummation of such sale and the seller and purchaser of
such Common Stock receive an opinion of counsel for the Company, which shall be
in form and content reasonably satisfactory to the seller and buyer and their
respective counsel, to the effect that such Common Stock in the hands of the
purchaser is freely transferable without restriction or registration under the
Securities Act in any public or private transaction.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"XXXXXX" has the meaning assigned to it in the introductory paragraph of
this Agreement.
"WARRANT" means the warrant to purchase Common Stock which has been issued
to Xxxxxx by the Company pursuant to this Agreement, and any warrant issued upon
transfer or substitution thereof.
"WARRANT CERTIFICATE" means the certificate dated April 7, 1998, held by
Xxxxxx and evidencing the right to purchase up to 1,100,000 shares of Common
Stock.
"WARRANT SHARES" means the Common Stock issued or issuable upon exercise of
the Warrant.
2. PURCHASE AND SALE OF WARRANT.
(a) AUTHORIZATION OF SECURITIES. The Company has authorized the
issuance and sale of the Warrant to purchase ONE MILLION ONE HUNDRED THOUSAND
(1,100,000) shares of Common Stock of the Company, having the terms set forth
herein and in the Warrant Certificate attached hereto as Exhibit A.
(b) SALE AND PURCHASE OF WARRANT. Concurrently herewith, the Company
hereby sells to Xxxxxx and Xxxxxx hereby purchases from the Company the Warrant
to purchase up to ONE MILLION ONE HUNDRED THOUSAND (1,100,000) shares of Common
Stock of the Company for a purchase price of ONE HUNDRED TEN THOUSAND DOLLARS
($110,000). Xxxxxx hereby acknowledges receipt of the Warrant, and the Company
hereby acknowledges receipt of the purchase price therefor.
3. COMPANY REPRESENTATIONS AND WARRANTIES. In connection with the
purchase of the Warrant hereunder, the Company represents and warrants to Xxxxxx
the following:
(a) ORGANIZATION, STANDING, ETC. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware, and has
all requisite power and authority to carry on its business, to own and hold its
properties and assets, to enter into this Agreement, to issue the Warrants and
the Warrant Shares and to carry out the provisions hereof.
(b) WARRANT. The Warrant is duly authorized and, when issued and
paid for in accordance with the terms hereof, will be duly authorized, validly
issued, fully paid and nonassessable, free and clear of all Liens and
restrictions, other than Liens that might have been created by Xxxxxx and
restrictions imposed by the Securities Act.
(c) WARRANT SHARES. The Warrant Shares have been duly authorized and
reserved for issuance upon exercise of the Warrant, and, when issued and paid
for in accordance with the terms hereof and the Warrant Agreement, will be duly
authorized, validly issued, fully paid and nonassessable Common Stock, free and
clear of all Liens
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and restrictions, other than Liens that might have been created by Xxxxxx and
restrictions imposed by the Securities Act.
(d) CORPORATE ACTS AND PROCEEDINGS. All corporate acts and
proceedings required of the Company for the authorization, execution, delivery
and performance of this Agreement and each other agreement or instrument
contemplated hereby, and the issuance and delivery of the Warrant and the
Warrant Shares, have been lawfully and validly taken.
(e) BINDING OBLIGATIONS. This Agreement and the Warrant constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforcement is
limited by bankruptcy, insolvency, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws affecting the enforcement of creditors' rights
generally, and by general equitable principles.
(f) SECURITIES LAWS. The offer, issue and sale of the Warrant and
the Warrant Shares are and will be exempt from the registration and prospectus
delivery requirements of the Securities Act, and have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws.
(g) DISCLOSURE. There is no fact which the Company has not disclosed
to Xxxxxx in writing which materially and adversely affects nor, insofar as the
Company can now foresee, will materially and adversely affect, the properties,
business, prospects, results of operation or condition (financial or other) of
the Company or the ability of the Company to perform this Agreement.
4. REQUIRED REGISTRATION.
(a) Commencing on the date and at the time the Certificate of Merger,
duly executed by ATC Merger Sub, Inc. and IQI, Inc., is filed with the
Secretary of State of New York pursuant to the Merger Agreement, if and whenever
the Company shall receive a written request therefor from Initiating Holders,
the Company agrees to prepare and file promptly a registration statement under
the Securities Act covering the shares of Registrable Securities which are the
subject of such request and agrees to use its best efforts to cause such
registration statement to become effective as expeditiously as possible. Upon
the receipt of such request, the Company agrees to give promptly written notice
to all Holders of Registrable Securities that such registration is to be
effected. The Company agrees to include in such registration statement such
shares of Registrable Securities for which it has received written requests to
register such shares by the Holders thereof within thirty (30) days after the
receipt of written notice from the Company.
(b) The Company shall be obligated to prepare, file and cause to
become effective only one registration statement pursuant to this Section 4 on a
form other than S-3, plus three additional registration statements on Form S-3.
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(c) A registration under this Section 4 shall be on a form selected
by the Company and reasonably acceptable to the Holders of a majority of the
shares of Registrable Securities to be included in such registration.
(d) If the Holders initiating a request for the registration of
Registrable Securities pursuant to this Section 4 intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they agree to provide the Company with the name of the managing underwriter or
underwriters (the "managing underwriter") that a majority interest of the
Initiating Holders requesting such registration propose to employ, as a part of
their request made pursuant to this Section 4, which managing underwriter shall
be reasonably acceptable to the Company. Furthermore, the Company agrees to
include such information regarding the managing underwriter in its written
notice referred to in Section 4(a). In such event the right of any Holder to
registration pursuant to this Section 4 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested (unless
otherwise mutually agreed by the Holders of a Majority of the Registrable
Securities initiating such request for registration and such Holder) to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting agree to enter into (together with the Company) an
underwriting agreement with the underwriter or underwriters selected for such
underwriting, in the manner set forth above, provided that such underwriting
agreement is in customary form and is reasonably acceptable to the Company and
the Holders of a majority of the shares of Registrable Securities to be included
in such registration.
(e) Notwithstanding any other provision of this Section 4, if the
managing underwriter of an underwritten distribution advises the Company and the
Holders of Registrable Securities participating in such registration in writing
that in its good faith judgment the number of shares of Registrable Securities
requested to be included in such registration exceeds the number of shares of
Registrable Securities which can be sold in such offering, then (i) the number
of shares of Registrable Securities so requested to be included in such
registration shall be reduced to that number of shares which in the good faith
judgment of the managing underwriter can be sold in such offering and (ii) this
reduced number of shares shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective number of shares of
Registrable Securities held by such Holders at the time of filing the
registration statement.
(f) To the extent all shares of Registrable Securities of the
Initiating Holders are not included in the registration statement due to the
underwriter cutbacks described above, such registration shall not count as the
demand registration to which the Initiating Holders are entitled pursuant to
subparagraph (b) of this Section 4.
(g) If the managing underwriter has not limited the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account in such registration if the managing underwriter so agrees
and if the number of Registrable Securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
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(h) Notwithstanding any of the foregoing, the Company may delay
filing a registration statement and may withhold efforts to cause the
registration statement to become effective, if the Company reasonably determines
in good faith that such registration might (i) interfere with or affect the
negotiation or completion of any transaction that is being contemplated by the
Company (whether or not a final decision has been made to undertake such
transaction) at the time the right to delay is exercised, or (ii) involve
initial or continuing disclosure obligations that might not be in the best
interest of the Company's stockholders. If, after a registration statement
becomes effective, the Company advises the holders of the registered shares that
the Company considers it appropriate for the registration statement to be
amended, the holders of such shares shall suspend any further sales of their
registered shares until the Company advises them that the registration statement
has been amended.
5. INCIDENTAL REGISTRATION.
(a) Each time the Company shall determine to file a registration
statement under the Securities Act (other than (i) pursuant to Section 4 hereof,
(ii) on Form S-8 or a registration statement on Form S-1 covering solely an
employee benefit plan and (iii) on Form S-4) in connection with the proposed
offer and sale for money of any of its securities either for its own account or
on behalf of any other security holder, the Company agrees to give promptly
written notice of its determination to all Holders of Registrable Securities.
Upon the written request of a Holder of any shares of Registrable Securities
given within thirty (30) days after the receipt of such written notice from the
Company, the Company agrees to cause all such Registrable Securities, the
Holders of which have so requested registration thereof, to be included in such
registration statement and registered under the Securities Act, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Registrable Securities to be so registered.
(b) If the registration of which the Company gives written notice
pursuant to Section 5(a) is for a public offering involving an underwriting, the
Company agrees to so advise the Holders as a part of its written notice. In
such event the right of any Holder to registration pursuant to this Section 5
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting agree to enter into (together with the
Company and the other holders distributing their securities through such
underwriting) an underwriting agreement with the underwriter or underwriters
selected for such underwriting by the Company, provided that such underwriting
agreement is in customary form and is reasonably acceptable to the Holders of a
majority of the shares of Registrable Securities requested to be included in
such registration.
(c) Notwithstanding any other provision of this Section 5, if the
managing underwriter of an underwritten distribution advises the Company and the
Holders of the Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of Registrable
Securities exceeds the number of shares of Registrable Securities which can be
sold in such offering, then (i) the number of shares of Registrable Securities
so requested to be included in the offering
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shall be reduced to that number of shares which in the good faith judgment of
the managing underwriter can be sold in such offering (except for shares to
be issued by the Company in an offering initiated by the Company, which shall
have priority over the shares of Registrable Securities), and (ii) such
reduced number of shares shall be allocated among all participating Holders
of Registrable Securities in proportion, as nearly as practicable, to the
respective number of shares of Registrable Securities by such Holders at the
time of filing the registration statement.
6. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 4 or 5 hereof to effect the registration of
Registrable Securities under the Securities Act, the Company, at its expense and
as expeditiously as possible, agrees to:
(a) In accordance with the Securities Act and all applicable rules
and regulations, prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective until the securities
covered by such registration statement have been sold, and prepare and file with
the Commission such amendments and supplements to such registration statement
and the prospectus contained therein as may be necessary to keep such
registration statement effective and such registration statement and prospectus
accurate and complete until the securities covered by such registration
statement have been sold;
(b) If the offering is to be underwritten in whole or in part, enter
into a written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter of the public offering, the Holders of
a majority of the Registrable Securities participating in such offering, and the
Company;
(c) Furnish to the Holders of securities participating in such
registration and to the underwriters of the securities being registered such
number of copies of the registration statement and each amendment and supplement
thereto, preliminary prospectus, final prospectus and such other documents as
such underwriters and Holders may reasonably request in order to facilitate the
public offering of such securities;
(d) Use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating Holders and underwriters may
reasonably request within ten (10) days prior to the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified;
(e) Notify the Holders participating in such registration, promptly
after it shall receive notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;
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(f) Notify such Holders promptly of any request by the Commission for
the amending or supplementing of such registration statement or prospectus or
for additional information;
(g) Prepare and file with the Commission, promptly upon the request
of any such Holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such Holders, is
required under the Securities Act or the rules and regulations thereunder in
connection with the distribution of the Registrable Securities by such Holders;
(h) Prepare and file promptly with the Commission, and promptly
notify such Holders of the filing of, such amendments or supplements to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(i) In case any of such Holders or any underwriter for any such
Holders is required to deliver a prospectus at a time when the prospectus then
in circulation is not in compliance with the Securities Act or the rules and
regulations of the Commission, prepare promptly upon request such amendments or
supplements to such registration statement and such prospectus as may be
necessary in order for such prospectus to comply with the requirements of the
Securities Act and such rules and regulations;
(j) Advise such Holders, 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 the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
(k) Not file any registration statement or prospectus or any
amendment or supplement to such registration statement or prospectus to which
the Holders of a majority of the Registrable Securities included or to be
included in a registration have reasonably objected on the grounds that such
registration statement or prospectus or amendment or supplement thereto does not
comply in all material respects with the requirements of the Securities Act or
the rules and regulations thereunder, after having been furnished with a copy
thereof at least five (5) business days prior to the filing thereof; provided,
however, that the failure of such Holders or their counsel to review or object
to any registration statement or prospectus or any amendment or supplement to
such registration statement or prospectus shall not affect the rights of such
Holders or their respective officers, directors, partners, legal counsel,
accountants or controlling Persons or any underwriter or any controlling Person
of such underwriter under Section 8 hereof;
(l) Make available for inspection upon request by any Holder of
Registrable Securities covered by such registration statement, by any managing
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underwriter of any distribution to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
Holder or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney, accountant or agent in
connection with such registration statement; and
(m) At the request of any Holder of Registrable Securities covered by
such registration statement, furnish to such Holder on the effective date of the
registration statement or, if such registration includes an underwritten public
offering, at the closing provided for in the underwriting agreement, (i) an
opinion dated such date of the counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any, and to the Holder
or Holders making such request, covering such matters with respect to the
registration statement, the prospectus and each amendment or supplement thereto,
proceedings under state and federal securities laws, other matters relating to
the Company, the securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of issuer's counsel
provided to underwriters in underwritten public offerings, and such opinion of
counsel shall additionally cover such legal matters with respect to the
registration as such requesting Holder or Holders may reasonably request, and
(ii) letters dated each of such effective date and such closing date, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the Holder or Holders making such request, stating
that they are independent certified public accountants within the meaning of the
Securities Act and dealing with such matters as the underwriters may request, or
if the offering is not underwritten that in the opinion of such accountants the
financial statements and other financial data of the Company included in the
registration statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of
the Securities Act, and additionally covering such other accounting and
financial matters, including information as to the period ending not more than
five (5) business days prior to the date of such letter with respect to the
registration statement and prospectus, as such requesting Holder or Holders may
reasonably request.
7. EXPENSES.
(a) With respect to each inclusion of shares of Registrable
Securities in a registration statement pursuant to Section 4 or 5 hereof, the
Company agrees to bear all fees, costs and expenses of and incidental to such
registration and the public offering in connection therewith; provided, however,
that security holders participating in any such registration agree to bear their
pro rata share of the underwriting discount and commissions and the fees and
expenses of their own counsel.
(b) The fees, costs and expenses of registration to be borne as
provided in paragraph (a) above, shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling security holders are otherwise required to bear such fees and
disbursements), all legal fees and disbursements and other expenses of
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complying with state securities or blue sky laws of any jurisdictions in
which the securities to be offered are to be registered or qualified, and the
premiums and other costs of policies of insurance against liability arising
out of such public offering.
8. INDEMNIFICATION.
(a) The Company hereby agrees to indemnify and hold harmless each
Holder of Registrable Securities which are included in a registration statement
pursuant to the provisions of this Agreement and each of such Holder's officers,
directors, partners, members, legal counsel and accountants, and each Person who
controls such Holder within the meaning of the Securities Act and any
underwriter (as defined in the Securities Act) for such Holder, and any Person
who controls such underwriter within the meaning of the Securities Act, from and
against, and agrees to reimburse such Holder, its officers, directors, partners,
members, legal counsel, accountants and controlling Persons and each such
underwriter and controlling Person of such underwriter with respect to, any and
all claims, actions (actual or threatened), demands, losses, damages,
liabilities, costs and expenses to which such Holder, its officers, directors,
partners, legal counsel, accountants or controlling Persons, or any such
underwriter or controlling Person of such underwriter may become subject under
the Securities Act or otherwise, insofar as such claims, actions, demands,
losses, damages, liabilities, costs or expenses arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the extent that
any such claim, action, demand, loss, damage, liability, cost or expense is
caused by an untrue statement or alleged untrue statement or omission or alleged
omission so made in strict conformity with written information furnished by such
Holder, such underwriter or such controlling Person specifically for use in the
preparation thereof.
(b) Each Holder of shares of Registrable Securities which are
included in a registration statement pursuant to the provisions of this
Agreement hereby agrees to indemnify and hold harmless the Company, its
officers, directors, legal counsel and accountants and each Person who controls
the Company within the meaning of the Securities Act, from and against, and
agrees to reimburse the Company, its officers, directors, legal counsel,
accountants and controlling Persons with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs or expenses to which the
Company, its officers, directors, legal counsel, accountants or such controlling
Persons may become subject under the Securities Act or otherwise, insofar as
such claims, actions, demands, losses, damages, liabilities, costs or expenses
are caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or are caused by the omission or the
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, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was so made in reliance upon and in strict conformity with
written information furnished
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by such Holder specifically for use in the preparation thereof.
Notwithstanding the foregoing, no Holder of Registrable Securities shall be
obligated hereunder to pay more than the net proceeds realized by it upon its
sale of Registrable Securities included in such registration statement.
(c) Promptly after receipt by a party indemnified pursuant to the
provisions of subsection (a) or (b) of this Section 8 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim therefor is to be
made against the indemnifying party pursuant to the provisions of subsection (a)
or (b), notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8 and shall not relieve the indemnifying party from liability under this
Section 8 unless such indemnifying party is prejudiced by such omission. In
case any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties). Upon the permitted assumption by the indemnifying party of the
defense of such action, and approval by the indemnified party of counsel, the
indemnifying party shall not be liable to such indemnified party under
subsection (a) or (b) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time,
(iii) the indemnifying party and its counsel do not actively and vigorously
pursue the defense of such action, or (iv) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will 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 subsection (a) or (b) of
this Section 8 is held by a court of competent jurisdiction to be unavailable to
a party to be indemnified with respect to any claims, actions, demands, losses,
damages, liabilities, costs or expenses referred to therein, then each
indemnifying party under any such
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subsection, in lieu of indemnifying such indemnified party thereunder, hereby
agrees to contribute to the amount paid or payable by such indemnified party
as a result of such claims, actions, demands, losses, damages, liabilities,
costs or expenses 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 claims, actions, demands, losses, damages,
liabilities, costs or expenses, 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 other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by 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. Notwithstanding the
foregoing, the amount any Holder of Registrable Securities shall be obligated
to contribute pursuant to this subsection (d) shall be limited to an amount
equal to the per share public offering price (less any underwriting discount
and commissions) multiplied by the number of shares of Registrable Securities
sold by such Holder pursuant to the registration statement which gives rise
to such obligation to contribute (less the aggregate amount of any damages
which such Holder has otherwise been required to pay in respect of such
claim, action, demand, loss, damage, liability, cost or expense or any
substantially similar claim, action, demand, loss, damage, liability, cost or
expense arising from the sale of such Registrable Securities).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution hereunder
from any person who was not guilty of such fraudulent misrepresentation.
9. REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT. The Company shall
timely file such information, documents and reports as the Commission may
require or prescribe under Section 13 of the Exchange Act. The Company
acknowledges and agrees that the purposes of the requirements contained in this
Section 9 are (a) to enable the Holders of Registrable Securities to comply with
the current public information requirement contained in paragraph (c) of Rule
144 should any such Holder ever wish to dispose of any of the Restricted Stock
without registration under the Securities Act in reliance upon Rule 144 (or any
other similar exemptive provision) and (b) to qualify the Company for the use of
registration statements on Form S-3.
10. STOCKHOLDER INFORMATION. The Company may request each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement to furnish the Company with such information with respect to
such Holder and the distribution of such Registrable Securities as the Company
may from time to time reasonably request in writing and as shall be required by
law or by the Commission in connection therewith, and each Holder of Registrable
Securities as to which any registration is to be effected pursuant to this
Agreement agrees to furnish the Company with such information.
11. FORMS. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to include,
references
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to all successor forms which are intended to replace, or to apply to similar
transactions as, the forms herein referenced.
12. GENERAL PROVISIONS.
(a) INTEGRATION. This Agreement, together with the Warrant
Certificate, constitute the entire agreement of the parties with respect to the
subject matter hereof.
(b) NOTICES. All notices and other communications which are required
or permitted to be given pursuant to the terms of this Agreement shall be in
writing and shall either be personally delivered or mailed first class, postage
prepaid, registered or certified mail (return receipt requested), to the person
for whom they are intended at the address shown on the signature pages of this
Agreement for such party. Each notice or other communication shall for all
purposes of this Agreement be treated as being effective or having been given
when delivered, if delivered personally, or, if sent by mail, at the earlier of
actual receipt or five (5) days after the same has been deposited in the United
States mail, addressed and postage paid as aforesaid. The addresses for the
purposes of this Section 12(b) may be changed by giving written notice to all
parties of such change in the manner provided herein for giving notice. Unless
and until such written notice is received, the addresses as provided herein
shall be deemed to continue in effect for all purposes hereunder.
(c) CHOICE OF LAW. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts of law) of
the State of Delaware.
(d) SEVERABILITY. The parties hereto agree that the terms and
provisions in this Agreement are reasonable and shall be binding and enforceable
in accordance with the terms hereof and, in any event, that the terms and
provisions of this Agreement shall be enforced to the fullest extent permissible
under law. In the event that any term or provision of this Agreement shall for
any reason by adjudged to be unenforceable or invalid, then such unenforceable
or invalid term or provision shall not affect the enforceability or validity of
the remaining terms and provisions of this Agreement, and the parties hereto
hereby agree to replace such unenforceable or invalid term or provision with an
enforceable and valid arrangement which, in its economic effect, shall be as
close as possible to the unenforceable or invalid term or provision.
(e) EXPENSES. The Company agrees to pay and hold Xxxxxx and Holders
of the Registrable Securities harmless from liability for the payment of (i) the
fees and expenses incurred in connection with any requested waiver of the right
of Xxxxxx or the consent of Xxxxxx to contemplated acts of the Company not
otherwise permissible by the terms of this Agreement, (ii) the reasonable fees
and expenses incurred with respect to any amendment to this Agreement proposed
by the Company (whether or not the same becomes effective), (iii) the reasonable
fees and expenses incurred in respect of the enforcement by Xxxxxx of its rights
granted under this Agreement, and (iv) all costs of the Company's performance of
and compliance with this Agreement.
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(f) PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective permitted successors and assigns of the parties hereto,
whether so expressed or not and, in particular, shall inure to the benefit of
and be enforceable by the Holder or Holders at the time of any of the
Registrable Securities. Subject to the immediately preceding sentence, this
Agreement shall not run to the benefit of or be enforceable by any Person other
than a party to this Agreement and its successors and assigns.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
(h) MODIFICATION, AMENDMENT AND WAIVER. This Agreement may be
amended only in writing with the written consent of all the Holders of the
Registrable Securities and the Company. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally or by
course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this Section 12. Specifically, but
without limiting the generality of the foregoing, the failure of Xxxxxx at any
time or times to require performance of any provision hereof by the Company
shall in no manner affect its right at a later time to enforce the same. No
waiver by any party of the breach of any term or provision 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 breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.
(i) FURTHER ASSURANCES. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement, and the Company specifically agrees to
cooperate affirmatively with Xxxxxx, if any, to the extent reasonably requested
by Xxxxxx, to enforce the rights of Xxxxxx and its assignees hereunder.
(j) HEADINGS. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
(k) GENDER AND NUMBER. As used in this Agreement, the masculine,
feminine or neuter gender, and the singular or plural, shall be deemed to
include the others whenever and wherever the context so requires. Additionally,
unless the context requires otherwise, "or" is not exclusive.
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[SIGNATURE PAGE OF SECURITIES PURCHASE
AND REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as of
the day and year first above written.
COMPANY:
--------
ATC COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
Address: ATC Communications Group, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
XXXXXX:
-------
XXXXXX EQUITY INVESTORS III, L.P.,
a Delaware limited partnership
By: TC Equity Partners L.L.C.,
Its General Partner
By:
------------------------------------
Name:
Title:
Address: Xxxxxx Capital Partners
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
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