Exhibit 10.13
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (the "Agreement") is made and
entered into as of November 22, 1996 between Teltrust, Inc., a Utah corporation
(the "Company"), arid those entities whose names appear on the signature pages
hereof (the "Holders").
This Agreement is made in connection with the Securities Purchase
Agreement, dated the date hereof (the "Securities Purchase Agreement") between
the Company and the Holders, pursuant to which the Holders are acquiring Series
A Convertible Preferred Stock, $.01 par value per share, of the Company. The
execution of and delivery of this Agreement is a condition precedent to the
obligations of the Holders under the Securities Purchase Agreement.
The parties hereby agree as follows:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Business Day" means any day, other than a Saturday, Sunday or
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legal holiday, on which banks in the State of New York are open for business.
(b) "Commission" means the Securities and Exchange Commission.
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(c) "Common Stock" means the Common Stock, par value $.01 per
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share, of the Company, as constituted on the date hereof, any shares into which
such Common Stock shall have been changed, or any shares resulting from any
reclassification of such Common Stock.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as
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amended, or any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
(e) "Holders" means the Holders referred to in the Preamble and any
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other person holding Registrable Securities to whom these registration rights
have been assigned pursuant to Section 9(f) of this Agreement.
(f) "Person" shall mean an individual, partnership, corporation,
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association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision thereof.
(g) "Registrable Securities" means (i) the Common Stock held by any
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Holder issued dr issuable pursuant to the conversion of the Series A Preferred
Stock; (ii) any Common Stock or
other securities issued or issuable pursuant to the conversion of; or with
respect to, the Series A Preferred Stock held by any Holder upon any stock
split, stock dividend, recapitalization, or similar event; and (iii) securities
issued in replacement or exchange of any of the securities issued in clauses (i)
or (ii) above.
(h) "Registration Expenses" means all expenses incident to the
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Company's performance of or compliance with this Agreement, including, without
limitation, all registration, filing, listing and National Association of
Securities Dealers, Inc. ("NASD") fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, all messenger and delivery expenses, any transfer taxes, the fees and
expenses of the Company's legal counsel and independent public accountants,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, fees and disbursements of one
counsel for all of the Holders, and any fees and disbursements of underwriters
customarily paid by insurers or sellers of securities; provided, however, that
Registration Expenses shall not include underwriting discounts and commissions.
(i) "Securities Act" means the Securities Act of 1933, as amended,
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or any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
(j) "Series A Preferred Stock" means the Series A Convertible
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Preferred Stock, no par value per share, of the Company, as constituted on the
date hereof; any shares into which such Series A Preferred Stock shall have been
changed or any shares resulting from any reclassification of such Series A
Preferred Stock.
2. Registration.
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(a) Requested Registration. At any time after the earlier to occur
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of (A) the fourth anniversary of the date hereof and (B) the Company's initial
public offering of equity securities, upon written request by the Holders of at
least twenty-five percent of the Registrable Securities outstanding at the time
of the request to the Company, that the Company effect the registration under
the Securities Act of all or part of the Registrable Securities (a "Requested
Registration"), the Company will use its best efforts to effect the registration
under the Securities Act of the Registrable Securities which the Company has
been so requested to register by the Holders within sixty (60) days after
receipt of such request or within thirty (30) days after receipt of such request
if the Company is qualified to file a registration statement on Commission Form
S-3 (or any successor or similar short-form registration statement
(collectively, "Commission Form S-3")); provided, however, that the Company
shall not be obligated to effect a Requested Registration, pursuant to this
subdivision (a) (X) unless either (i) the requesting Holders pay the
Registration Expenses pursuant to Section 2(d) hereof or (ii) the anticipated
aggregate offering price of the Registrable Securities to be sold is at least
$750,000, in the case of registration on Commission Form S-3, or at least
$5,000,000 in the case of other registrations or (Y) during the 180 day period
immediately following the commencement of the Company's public offering of
equity securities. The Company must effect an unlimited number of registrations
pursuant to this subdivision (a) to the extent such registrations may be
effected on Commission Form S-3, but the
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Company shall not be obligated to effect more than three Requested Registrations
hereunder other than on Commission Form S-3. Subject to subdivision (f), the
Company may include in such Requested Registration other securities of the
Company for sale, for the Company's account or for the account of any other
person, if and to the extent that the managing underwriter determines that the
inclusion of such additional shares will not interfere with the orderly sale of
the underwritten securities at a price range acceptable to the Holders. Upon
receipt of a written request pursuant to this subdivision (a) the Company shall
promptly give written notice of such request to all Holders, and all Holders
shall be afforded the opportunity to participate in such request as follows: The
Company will be obligated to include in the Requested Registration such number
of Registrable Securities of any Holder joining in such request as are specified
in a written request by the Holder received by the Company within 20 days after
receipt of such written notice from the Company.
(b) Incidental Registration. If the Company for itself or any of
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its security holders shall at any time or times after the date hereof determine
to register under the Securities Act any shares of its capital stock or other
securities (other than: (i) the registration of an offer, sale or other
disposition of securities solely to employees of; or other persons providing
services to, the Company, or any subsidiary pursuant to an employee or similar
benefit plan; or (ii) relating to a merger, acquisition or other transaction of
the type described in Rule 145 under the Securities Act or a comparable or
successor rule, registered on Form S-4 or similar or successor forms), on each
such occasion the Company will notify each Holder of such determination at
least thirty (30) days prior to the filing of such registration statement, and
upon the request of any Holder given in writing within twenty (20) days after
the receipt of such notice, the Company will use its best efforts as soon as
practicable thereafter to cause any of the Registrable Shares specified by any
such Holder to be included in such registration statement to the extent such
registration is permissible under the Securities Act and subject to the
conditions of the Securities Act (an "Incidental Registration").
(c) Registration Statement Form. The Company shall, if permitted
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by law, effect any registration requested under Section 2 by the filing of a
registration statement on Commission Form S-3 and shall use its best efforts to
take any action necessary to maintain its eligibility to utilize Commission Form
S-3 to permit resales as requested by the Holders with respect to Transactions
Involving Secondary Offerings as described in General Instruction I.B.3 of
Commission Form S-3.
(d) Expenses. The Company shall pay all Registration Expenses
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incurred in connection with any Incidental Registration, any Requested
Registrations that do not become effective and the first three Requested
Registrations that become effective pursuant to this Section 2. The requesting
Holders shall pay the Registration Expenses of any Requested Registrations after
the third Requested Registration.
(e) Effective Registration Statement. A Requested Registration or
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an Incidental Registration requested pursuant to Section 2(a) or Section 2(b),
respectively, shall not be deemed to have been effected unless it has become
effective with the Commission. Notwithstanding the
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foregoing, a registration statement will not be deemed to have been effected if:
(i) after it has become effective with the Commission, such registration is
interfered with by any stop order, injunction, or other order or requirement of
the Commission or other governmental agency or any court proceeding for any
reason other than a misrepresentation or omission by any Holder; or (ii) the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than solely by reason of some act or omission by any Holder.
(f) Priority in Incidental Registration. If an Incidental
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Registration is an underwritten registration initiated by the Company, and the
managing underwriters shall give written advice to the Company that, in their
opinion, market conditions dictate that no more than a specified maximum number
of securities (the "Underwriter's Maximum Number") could successfully be
included in such Incidental Registration, then: (i) the Company shall be
entitled to include in such registration that number of securities which the
Company proposes to offer and sell for its own account in such registration and
which does not exceed the Underwriter's Maximum Number; and (ii) the Company
will be obligated and required to include in such registration that number of
shares of Registrable Securities which shall have been requested by the Holders
thereof having registration rights hereunder or by holders having registration
rights pursuant to another registration rights agreement with the Company to be
included in such registration and which does not exceed the difference between
the Underwriter's Maximum Number and that number of securities which the Company
is entitled to include therein pursuant to clause (i) above and such number of
shares shall be allocated pro rata between the Holders and any other such
holders on the basis of the number of shares requested to be included therein by
the Holders, on the one hand, and such other holders, on the other hand.
If less than all of the Registrable Securities requested to be included
in any such registration by the Holders can be so included due to these priority
requirements, then each requesting Holder's request shall be granted on an pro
rata basis with the other requesting Holders.
(g) Notwithstanding anything in paragraphs (a) and (b) of this
Section 2, the Company shall have the right to delay any registration of
Registrable Securities requested pursuant to paragraph (a) or (b) of this
Section 2 for up to ninety (90) days if such registration would, in the sole
reasonable judgment of the Company's Board of Directors, substantially interfere
with any material transaction being considered at the time of receipt of the
request from the Holders.
3. Registration Procedures.
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(a) If and whenever the Company is required to use its best efforts
to effect the registration of any Registrable Securities under the Securities
Act as provided in Section 2, the Company, as expeditiously as possible and
subject to the terms and conditions of Section 2, will:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and use its best efforts to
cause such registration to become and remain effective;
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(ii) permit any Holder which, in the reasonable judgment of the
Holder, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration statement and to
require the insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such Holder and its counsel should be
included;
(iii) prepare and file with the Commission 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 and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the expiration of 180 days
after such registration statement becomes effective;
(iv) furnish to the Holders such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the purchaser or any Holder of Registrable
Securities to be sold under such registration statement may reasonably request;
(v) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other United States
state securities or blue sky laws of such jurisdictions as any Holder of
Registrable Securities to be sold under registration statement shall reasonably
request, to keep such registration or qualification in effect for so long as
such registration remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Holder of Registrable Securities
to be sold under such registration statement to consummate the disposition in
such jurisdictions of the securities owned by such Holder, except that the
Company shall not for any such purpose be required to (a) qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subdivision (v) be obligated to be so
qualified, or (b) subject itself to taxation in any such jurisdiction.
(vi) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other United States state governmental agencies or authorities as may be
necessary to enable the Holder of Registrable Securities to be sold under such
registration statement to consummate the intended disposition of such
Registrable Securities;
(vii) in the event of the issuance of any stop order suspending
the effectiveness of the registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such
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registration statement for sale in any jurisdiction, the Company shall use its
best efforts promptly to obtain the withdrawal of such order;
(viii) use it best efforts to furnish to the Holders of
Registrable Securities to be sold under such registration statement (1) an
opinion, dated the effective date of the registration statement, of the
independent counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, and to the Holders making
such request, stating that such registration statement has become effective
under the Securities Act and that (i) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act; (ii) the registration statement, the related
prospectus, and each amendment or supplement thereto, comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except that such counsel
need express no opinion as to financial statements contained therein); (iii)
such counsel has no reason to believe that either the registration statement or
the prospectus, or any amendment or supplement thereto, contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (iv) the descriptions in the registration statement or the
prospectus, or any amendment or supplement thereto, of all legal and
governmental matters and contracts and other legal documents or instruments are
accurate and fairly present the information required to be shown; and (v) such
counsel does not know of any legal or governmental proceedings, pending or
contemplated, required to be described in the registration statement or
prospectus, or any amendment or supplement thereto, which are not described as
required nor of any contracts or documents or instruments of a character
required to be described in the registration statement or prospectus, or any
amendment or supplement thereto or to be filed as exhibits to the registration
statement which are not described and filed as required; and (2) a letter, dated
the effective date of the registration statement, from the independent certified
public accountants of the Company, addressed to the underwriters, if any, and to
the Holders making such request, stating that they are independent certified
public accountants within the meaning of the Securities Act and 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 as to form in all material respects with
the applicable accounting requirements of the Securities Act.
Such opinion of counsel shall additionally cover such legal
matters with respect to the registration in respect of which such opinion is
being given as the Holders may reasonably request. Such letter from the
independent certified public accountants shall additionally cover such other
financial matters (including information as to the period ending not more than
five business days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as the Holders may
reasonably request.
(ix) immediately notify the Holders of Registrable Securities
included in such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of material
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fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of the Holders
promptly prepare and furnish to the Holders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder, and not file any amendment
or supplement to such registration statement or prospectus to which any Holder
shall have reasonably objected in writing on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least two business days prior to the filing thereof;
(xi) provide a transfer agent for all Registrable Securities
covered by such registration statement not later than the effective date of such
registration statement; and
(xii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed.
(b) The Company may require each Holder of Registrable Securities
to be sold under such registration statement, at the Company's expense, to
furnish the Company with such information and undertakings as it may reasonably
request regarding such Holder and the distribution of such securities as the
Company may from time to time reasonably request in writing.
(c) Each Holder, by execution of this Agreement, agrees (A) that
upon receipt of any notice of the Company of the happening of any event of the
kind described in subdivision (a)(ix) of this Section 3, such Holder will
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the receipt
by such Holder of the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3 and, if so directed by the
Company, will deliver to the Company all copies other than permanent file
copies, then in possession of the Holders of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice and (B)
that it will immediately notify the Company, at any time when a prospectus
relating to the registration of such Registrable Securities is required to be
delivered under the Securities Act, of the happening of any event as a result of
which information previously furnished by such Holder to the Company for
inclusion in such prospectus contains an untrue statement of a material fact
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or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
under which they were made. In the event the Company or any such Holder shall
give any such notice, the period referred to in subdivision (a)(iii) of this
Section 3 shall be extended by a number of days equal to the number of days
during the period from and including the giving of notice pursuant to
subdivision (a)(ix) of this Section 3 to and including the date when such Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3.
4. Underwritten Offerings.
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(a) Underwritten Offering. In connection with any underwritten
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offering pursuant to a registration requested under Section 2(a), the Company
will enter into an underwriting agreement with the underwriters for such
offering, such agreement to be in form and substance reasonably satisfactory to
all Holders requesting such registration and such Holders' underwriters in their
reasonable judgment and to contain such representations and warranties by the
Company and such other terms as are customarily contained in agreements of that
type, including, without limitation, indemnities to the effect and to the extent
provided in Section 6. Each such Holder shall be a party to such underwriting
agreement and may, at its or their option, require that any or all of the
representations and warranties by, and the other agreements on the part of; the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of each such Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of each such Holder. No
Holder requesting such registration shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder and its intended method of distribution and any other representation
required by law.
(b) Selection of Underwriters. If a Requested Registration pursuant
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to Section 2(a) involves an underwritten offering, then the Company shall select
the underwriter from underwriting firms of national reputation, subject to the
approval of the Holders of a majority of the Registrable Securities to be
included in such registration.
(c) Holdback Agreements. Each Holder agrees, if so reasonably
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required by the managing underwriter in a registration pursuant to Section 2,
not to effect any public sale or distribution of Registrable Securities or sales
of such Registrable Securities pursuant to Rule 144 or Rule 144A under the
Securities Act, during the seven (7) days prior to and the 180 days after any
firm commitment underwritten registration pursuant to Section 2 has become
effective (except as part of such underwritten registration) or, if the managing
underwriter advises the Company that, in its opinion, no such public sale or
distribution should be effected for a period of not more than 180 days after
such underwritten registration in order to complete the sale and distribution of
securities included in such registration and the Company gives notice to such
effect to such Holders of such advice, each Holder shall not effect any public
sale or distribution of Registrable Securities or sales of such Registrable
Securities pursuant to Rule 144 or Rule 144A under the Securities Act during
such period after such underwritten registration, except as
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part of such underwritten registration, whether or not such Holder participates
in such registration.
5. Preparation, Reasonable Investigation.
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In connection with the preparation and filing of each registration
statement under the Securities Act, the Company will give the Holders of
Registrable Securities to be sold under such registration statement, the
underwriters, if any, and their respective counsel and accountants, drafts and
final copies of such registration statement, each prospectus included therein or
filed with the Commission and each amendment thereof or supplement thereto, at
least 5 business days prior to the filing thereof with the Commission, and will
give each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such Holders and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
6. Indemnification and Contribution.
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(a) Indemnification by the Company. In the event of any
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registration under the Securities Act pursuant to Section 2 of any Registrable
Securities covered by such registration, the Company will, and hereby does,
indemnify and hold harmless each Holder of Registrable Securities to be sold
under such registration statement, each such Holder's legal counsel, each other
person who participates as an underwriter in the offering or sale of such
securities (if so required by such underwriter as a condition to including the
Registrable Securities of the Holders in such registration) and each other
person, if any, who controls any such Holder or any such underwriter within the
meaning of the Securities Act (collectively, the "Indemnified Parties"), against
any losses, claims, damages or liabilities, joint or several, to which the
Holders or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect 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 securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained therein
or any document incorporated therein by reference, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of any violation by the Company of any rule
or regulation promulgated under the Securities Act or state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and the Company will reimburse
the Indemnified Parties for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
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be liable to any Indemnified Party in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
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or supplement in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Party.
(b) Indemnification by the Holders. The Company may require, as a
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condition to including any Registrable Securities of any person or entity in any
registration statement filed pursuant to Section 2, that the Company shall have
received an undertaking reasonably satisfactory to it from such person or entity
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 6) the Company, each director of the
Company, each officer of the Company and each other person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if; and
only if; such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with information furnished in writing to
the Company directly by such person or entity specifically for use therein;
provided, however, that the obligation of any Holder hereunder shall be limited
to an amount equal to the proceeds received by such Holder upon the sale of
Registrable Securities sold in the offering covered by such registration.
(c) Notices of Claims, etc. Promptly after receipt by an
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Indemnified Party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 6,
such Indemnified Party will, if a claim in respect thereof is to be made against
a party required to provide indemnification (an "Indemnifying Party"), give
written notice to the latter of the commencement of such action, provided,
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however, that the failure of any Indemnified Party to give notice as provided
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herein shall not relieve the Indemnifying Party of its obligation under the
preceding subdivisions of this Section 6, except to the extent that the
Indemnifying Party is actually prejudiced by such failure to give notice. In
case any such action is brought against an Indemnified Party, unless in such
Indemnified Party's reasonable judgment a conflict of interest between such
Indemnified and indemnifying parties may exist in respect of such claim, the
Indemnifying Party shall be entitled to participate in and to assume the defense
thereof; jointly with any other Indemnifying Party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof; the
Indemnifying Party shall not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No Indemnifying
Party shall consent to entry of any judgment or enter into any settlement
without the consent of the Indemnified Party 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 to such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that
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specified in the preceding subdivisions of this Section 6 (with appropriate
modifications) shall be given by the Company and each Holder of Registrable
Securities included in any registration statement with respect to
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any required registration or other qualification of securities under any Federal
or state law or regulation of any governmental authority, other than the
Securities Act.
(e) Indemnification Payment. The indemnification required by this
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Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) Survival of Obligations. The obligations of the Company and of
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the Holders under this Section 6 shall survive the completion of any offering of
Registrable Securities under this Agreement.
(g) Contribution. If the indemnification provided for in this
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Section 6 is unavailable or insufficient to hold harmless an Indemnified Party,
then each Indemnifying Party shall contribute to the amount paid or payable to
such Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault 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 parties on the one hand or the
Indemnified Party on the other and the parties' relative, intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(g) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim which is the subject of this Section 6. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
7. Covenants Relating to Rule 144.
------------------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
securities of the Company to the public without registration after such time as
a public market exists for the Common Stock of the Company, the Company agrees:
(a) to make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to the general
public;
(b) to use its best efforts to then file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the
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Exchange Act, as amended (at any time after it has become subject to such
reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements) a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
8. Other Registration Rights.
-------------------------
The Company shall not grant to any Person any registration rights more
favorable than or inconsistent with any of those contained herein, so long as
any of the registration rights under this Agreement remain in effect.
9. Miscellaneous.
-------------
(a) Specific Performance. The parties hereto acknowledge that there
--------------------
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement.
(b) Notices. All demands, requests, notices and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by United States first class mail, postage prepaid, and to the parties
hereto at the following address or at such other address as any party hereto
shall hereafter specified by notice to the other party hereto:
(i) if to the Company, addressed to:
Teltrust, Inc.
000 Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: Xx. Xxxx X. Xxxx
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
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Xxxxxxx Xxxx Xxxxxxxx Xxxxx & Xxx
Suite 1300
000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
(ii) if to the Holders, to their addresses set
forth on Schedule I attached hereto
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx,XX 00000
Except as otherwise provided herein, all such demands, requests, notices and
other communications shall be deemed to have been received on the date of
personal delivery thereof or on the third business day after the mailing
thereof.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of The Commonwealth of
Massachusetts, without regard to conflicts of law principles thereof.
(d) Headings. The descriptive headings of the several sections and
--------
paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) Entire Agreement: Amendments. This Agreement and the other
----------------------------
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and
those Holders holding a majority of Registrable Securities. Each Holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
an amendment or waiver authorized by this Section 9(e), whether or not any such
Registrable Securities shall have been marked to indicate such consent.
(f) Assignability. This Agreement and all of the provisions hereof
-------------
will be assigned, without the consent of the Company, by any Holder to, and
shall inure to the benefit of; any purchaser, transferee or assignee of any
Registrable Security, unless the Holder specifies otherwise in connection with
particular transfers of Registrable Securities. However, the Company shall not
be required to recognize any such purchaser, transferee or assignee as a Holder
under this Agreement unless and until either (i) such person becomes the holder
of record
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of Registrable Securities or (ii) the Company receives written notice of such
purchase, transfer or assignment.
(g) Counterparts. This Agreement may be executed 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TELTRUST, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Xxxx X. Xxxx, Chairman and
Chief Executive Officer
MEDIA/COMMUNICATIONS PARTNERS III
LIMITED PARTNERSHIP
By: M/C III L.L.C., its General Partner
By: /s/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx, Manager
M/C INVESTORS L.L.C.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx, Manager
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Schedule 1
c/o Media/Communications Partners
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
-15-
AMENDMENT TO EXHIBIT 10.13
AMENDMENT
TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT (the "Amendment") dated as of April 9, 1998 by and among
Teltrust, Inc., a Utah corporation (the "Company"), TTST Holdings, Inc., a
Delaware corporation ("Newco"), and the shareholders identified on Schedule A
----------
hereto (the "Shareholders").
WHEREAS the Company and Newco desire to enter into a reorganization
transaction pursuant to which the Company shall become a wholly-owned subsidiary
of Newco, all stockholders of the Company shall become stockholders of Newco and
Newco shall change its name to "Teltrust, Inc." (the "Reorganization
Transaction");
WHEREAS the Company and the Shareholders are parties to a Registration
Rights Agreement dated as of November 22, 1996 (the "Registration Rights
Agreement"); and
WHEREAS the Company, Newco and the Shareholders desire, subject to
consummation of the Reorganization Transaction, to amend the Registration Rights
Agreement to provide that all of the rights and obligations of the Company under
the Registration Rights Agreement shall become the rights and obligations of
Newco upon the terms and subject to the conditions set forth herein immediately
following consummation of the Reorganization Transaction (the "Effective Time").
NOW, THEREFORE, for good and valuable consideration, the undersigned hereby
agree as follows:
1. Capitalized terms not otherwise defined herein shall have the meaning
ascribed to such terms in the Registration Rights Agreement.
2. Each of the Company, Newco and the Shareholders hereby consents to
this Amendment as set forth herein.
3. Subject to consummation of the Reorganization Transaction, the
introductory paragraph of the Registration Rights Agreement is hereby amended,
as of the Effective Time, by deleting such paragraph in its entirety and
substituting therefor the following paragraph:
"This Registration Rights Agreement (the "Agreement") is made and
---------
entered into as of November 22, 1996 and is amended as of April 9, 1998,
by and among Teltrust, Inc., a Delaware corporation ("Company"), and those
entities whose names appear on the signature pages hereof (the "Holders")."
4. Subject to consummation of the Reorganization Transaction, Newco
hereby covenants and agrees to assume and perform from and after the Effective
Time all of the Company's duties and obligations in accordance with and pursuant
to the terms of the Registration Rights Agreement.
5. From and after the Effective Time, all references in the Registration
Rights Agreement to the "Company" shall be deemed to be references to Newco, and
the Company shall have no further rights or obligations under the Registration
Rights Agreement.
6. As amended by this Amendment, the Registration Rights Agreement is in
all respects ratified and confirmed, and as so amended by this Amendment the
Registration Rights Agreement shall be read, taken and construed as one and the
same instrument.
7. This Amendment may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which so executed shall be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
8. This Amendment shall be governed in accordance with the laws of the
State of Delaware without regard to principles of conflicts of law.
[END OF TEXT]
EXECUTED as of the date first set forth above.
TELTRUST, INC.
By:/s/ Xxxx X. Xxxxx
_________________________________
Name: Xxxx X. Xxxxx
Title: President and Chief
Executive Officer
TTST HOLDINGS, INC.
By:/s/ Xxxx X. Xxxxx
_________________________________
Name: Xxxx X. Xxxxx
Title: President and Chief
Executive Officer
MEDIA/COMMUNICATIONS PARTNERS III LIMITED
PARTNERSHIP
By: M/C III L.L.C., its general partner
By:/s/ Xxxx X. Xxxxx
_________________________________
Name: Xxxx X. Xxxxx
Title: Manager
M/C INVESTORS L.L.C.
By:/s/ Xxxx X. Xxxxx
_________________________________
Name: Xxxx X. Xxxxx
Title: Manager
Schedule A
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Shareholders
Media/Communications Partners III Limited Partnership
M/C Investors L.L.C.
