Exhibit 10.14
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
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entered into this 1st day of October, 1997 between TELTRUST, INC., a Utah
corporation (the "Company"), and those persons whose names appear on the
signature pages hereof (the "Holders").
This Agreement is made in connection with the Merger Agreement dated
October 1, 1997 by and between the Company, Teltrust Acquisition, Inc., Quest
International, Inc. ("Quest") and the shareholders of Quest. The execution of
and delivery of this Agreement is a condition precedent to the closing of the
merger contemplated by the Merger 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 Utah are open for business.
(b) "Commission" means the Securities and Exchange Commission.
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(c) "Common Stock" means the Common Stock, $0.01 par value, of the
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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.
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(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 shares Common Stock issued
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to the Holders pursuant to the merger contemplated by the Merger Agreement; (ii)
any shares of Common Stock issued with respect to the securities referenced in
clause (i) pursuant to a stock split, stock dividend, recapitalization or
similar event and (iii) securities issued in replacement or exchange of any of
the securities described in clauses (i) and (ii). As to any particular
Registrable Securities, such securities shall cease to be Registerable
Securities, and thereafter may not be included in a Requested or Incidental
Registration, on the date on which (a) such securities are transferred by a
Holder to another Person, or (1)) such securities may be sold without
registration pursuant to the provisions of Rule 144, or any successor rule.
(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, and any fees and
disbursements of underwriters customarily
paid by issuers or sellers of securities; provided, however that Registration
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Expenses shall not include underwriting discounts and commissions, and special
counsel for selling Shareholders.
(i) "Securities Act" means the Securities Act of 1933, as amended, or
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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.
2. Registration.
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(a) Requested Registration. Subject to Section 8(g), at any time after
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180 days following the Company's registered initial public offering of equity
securities, upon written request by the Holders of more than fifty 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; provided,
however, that the Company shall not be obligated to effect a Requested
Registration pursuant to this Section 2(a) (A) if such registration may not be
effected on Commission Form S-3 (or any successor or similar short-form
registration statement), or (B) during the 180 day period immediately following
the commencement of a public offering of the Company's equity securities. The
Company will not be required to effect more than one Requested Registration
under this Section 2(a) in any 12-month period. The Company may include in a
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
the managing underwriter, if any, 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 its
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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
Securities 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) S-3 Eligibility. During any period in which the Holders may request
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a Requested Registration pursuant to the provisions of Section 2(a), the Company
shall use its best efforts to take any action necessary to maintain its
eligibility to utilize 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 incurred
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in connection with any Requested or Incidental Registrations, including any that
do not become effective.
(e) Effective Registration Statement. A Requested Registration or an
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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 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 Registration
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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, by holders having registration rights
pursuant to another registration rights agreement with the Company or by ▇▇▇▇
▇▇▇▇ 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
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Holders, any other such holders, and ▇▇▇▇ ▇▇▇▇ on the basis of the number of
shares requested to be included therein by the Holders, on the one hand, and
such other holders, and ▇▇▇▇ ▇▇▇▇ 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 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;
(ii) with respect to a Requested Registration, permit any
Holder which, in the reasonable judgment of the Company, 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 or its counsel should be included; provided, however,
the Company shall not be required to insert any material which in the reasonable
judgment of the Company's outside counsel includes an untrue statement of
material 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;
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(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 one year
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 unclear 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 such 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 registration
statement for sale in any jurisdiction, the Company shall use its best efforts
promptly to obtain the withdrawal of such order;
(viii) if the offering is underwritten and at the request of
any seller of Registrable Securities, use its best efforts to furnish on the
date that the Registrable Securities are delivered to the underwriters for sale
pursuant to such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters and such selling Holder stating that such registration statement
has become effective under the Securities Act and that (A) 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, (B) the registration statement, the
related prospectus and each amendment or supplement thereof comply as to form in
all material respects with the requirements of the Securities Act (except that
such counsel need not express any opinion as to financial statements contained
therein), and (C) to such other effects as reasonably may be requested by
counsel for the underwriters or the selling Holder; and (ii) a letter dated such
date from the independent public accountants retained by the Company, addressed
to the underwriters and to such selling Holder, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or supplement
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thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may 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 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 furnish 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
(xi) 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 furnish by such Holder to the Company for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in 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
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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 differing. 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
the Company, 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, its Registrable Securities, its intended method of
distribution and any other representation required by law.
(b) Selection of Underwriters. If a Requested Registration pursuant to
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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) Underwriter's Agreement. In the event of an underwritten offering
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pursuant to which the Holders request registration under Section 2, the sellers
of Registrable Securities to be distributed by such underwriters shall, as a
condition to inclusion of their Registrable Securities in such registration, be
parties to such underwriting agreement and shall be required to make such
representations or warranties as the underwriters may reasonably request,
including representations and warranties regarding such holder, such holder's
Registrable Securities and such holder's intended method of distribution and any
other representation required by law.
(d) Holdback Agreements. Each Holder agrees, if so reasonably required
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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 public 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 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
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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 of the Company. In the event of any registration
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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 be liable to any
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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 or
supplement in reliance upon and in conformity with written information
furnish 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;
provided further, however, that the liability of such Holder shall not be
limited in the event that any loss or claim arises from the fraudulent
misrepresentations of the Holder.
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(c) Notices of Claims. Promptly after receipt by an Indemnified Party
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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, however that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
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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
judgement 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 then 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 specified in
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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 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 the
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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 Section 6
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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.
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7. Covenants Relating to Rule 144.
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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 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. Miscellaneous.
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(a) Specific Performance. The parties hereto acknowledge that there may
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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
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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 specify by notice to the other party hereto:
(i) if to the Company, addressed to:
Teltrust, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
with a copy to:
D. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Parr, Waddoups, ▇▇▇▇▇ & Gee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
9
(ii) if to the Holders, to their addresses set forth on
Schedule 1 attached hereto. 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
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accordance with the internal laws of the State of Utah, 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 and all other agreements, warrants or
other documents granting registration rights with respect to the Registrable
Securities. 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 8(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 may
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not be assigned, without the consent of the Company, by any Holder, which
consent shall not be unreasonably withheld with respect to the transfer of all
of the Registrable Securities held by a Holder to a single person or entity.
(g) Termination. The obligations of the Company to effect a Requested
-----------
Registration for a Holder pursuant to Section 2(a) shall terminate two years
after the date of a firmly underwritten registered initial public offering of
the Company.
(h) 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.
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TELTRUST, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: PRESIDENT/CEO
HOLDERS
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SIRROM INVESTMENTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Its: VP
11
AMENDMENT TO
EXHIBIT 10.14
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
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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 October 1, 1997 (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
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entered into as of this 1st day of October, 1997 and is amended as of April
9, 1998, between Teltrust, Inc., a Delaware corporation ("Company"), and
those persons 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]
2
EXECUTED as of the date first set forth above.
TELTRUST, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief
Executive Officer
TTST HOLDINGS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief
Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SIRROM INVESTMENTS, INC.
PARTNERS III LIMITED
By:_________________________________
Name:
Title:
Schedule A
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Shareholders
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▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Sirrom Investments, Inc.