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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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PRT GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3914972
(STATE OF INCORPORATION OR (I.R.S. EMPLOYEE
ORGANIZATION) IDENTIFICATION NO.)
342 MADISON AVENUE, 11TH FLOOR
NEW YORK, NEW YORK 10173
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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If this form relates to the registration of a class of securities pursuant to
General Instruction A.(c), please check the following box. [ ]
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant General
Instruction A.(d), please check the following box. [x]
SECURITIES ACT REGISTRATION STATEMENT FILE NUMBER TO WHICH THIS FORM RELATES:
333-36169
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
A description of the Registrant's Common Stock, par value
$.001 per share, being registered hereby is contained in the Registrant's
Registration Statement on Form S-1, as amended (Registration No. 333-36169)
(the "Registration Statement"), initially filed with the Securities and
Exchange Commission (the "Commission") on September 23, 1997, under the
caption "Description of Capital Stock," which description is incorporated
herein by reference.
ITEM 2. EXHIBITS.
The securities to be registered are to be registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended,
on the NASDAQ National Market (the "NASDAQ"), on which no other securities of
the Registrant are registered. Accordingly, the following exhibits required in
accordance with the instructions as to exhibits to a Registration Statement on
Form 8-A have been duly filed with the NASDAQ:
1. Form of Amended and Restated Certificate of Incorporation of
Registrant.
2. Form of Amended and Restated By-Laws of Registrant.
3. Form of Registration Rights Agreement among the Registrant and The
Mellinger Group LLC.
4. Preferred Stock Purchase Agreement, dated as of November 21, 1996
(incorporated herein by reference to Exhibit 10.7 to the Registration
Statement).
5. Form of Warrant Exchange Agreement, dated as of September 16, 1997.
6. Stock Purchase Agreement among Robert Marchetti, Stephen Michaelson,
and PRT Group Inc., dated as of July 1, 1997 (incorporated herein by
reference to Exhibit 10.9 to the Registration Statement).
7. Specimen of Registrant's Common Stock Certificate (incorporated
herein by reference to Exhibit 4.1 to the Registration Statement).
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
PRT GROUP INC.
By: /s/ Douglas K. Mellinger
Name: Douglas K. Mellinger
Title: Chairman, President and
Chief Executive Officer
Dated: November 4, 1997
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FORM OF AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PRT GROUP INC.
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Pursuant to Sections 242 and 245 of the
Delaware General Corporation Law
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PRT Group Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"GCL"), does hereby certify as follows:
(1) The name of the Corporation is PRT Group Inc. The original
certificate of incorporation of the Corporation was filed with the office of
the Secretary of State of the State of Delaware on September 18, 1996.
(2) This Amended and Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board of Directors")
and by the stockholders of the Corporation in accordance with Sections 228, 242
and 245 of the GCL.
(3) This Amended and Restated Certificate of Incorporation restates
and integrates and further amends the certificate of incorporation of the
Corporation, as heretofore amended or supplemented.
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(4) The text of the Certificate of Incorporation is amended and
restated in its entirety as follows:
FIRST: The name of the Corporation is PRT Group Inc. (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware (the "GCL").
FOURTH: (a) Authorized Capital Stock. The total number of shares of
stock which the Corporation shall have authority to issue is 65,000,000 shares
of capital stock, consisting of (i) 50,000,000 shares of voting common stock,
par value $.001 per share (the "Voting Common Stock"), (ii) 1,000,000 shares of
non-voting common stock, par value $.001 per share (the "Non-Voting
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Common Stock" and, together with the Voting Common Stock, the "Common Stock"),
and (iii) 10,000,000 shares of preferred stock, par value $.001 per share (the
"Preferred Stock").
(b) Common Stock. The powers, preferences and rights, and the
qualifications, limitations and restrictions, of each class of the Common
Stock are as follows:
(1) Ranking. Except as otherwise expressly provided in this Amended
and Restated Certificate of Incorporation, the powers, preferences and rights
of the holders of Voting Common Stock and holders of Non-Voting Common Stock,
and the qualifications, limitations and restrictions thereof, shall be in all
respects identical.
(2) Voting. Except as otherwise expressly required by law or
provided in this Amended and Restated Certificate of Incorporation, and subject
to any voting rights provided to holders of Preferred Stock at any time
outstanding, the holders of any outstanding shares of Voting Common Stock shall
vote together as a single class on all matters with respect to which
stockholders are entitled to vote under applicable law, this Amended and
Restated Certificate of Incorporation or the By-Laws of the Corporation, or
upon which a vote of
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stockholders is otherwise duly called for by the Corporation. At each annual or
special meeting of stockholders, each holder of record of shares of Voting
Common Stock on the relevant record date shall be entitled to cast one vote in
person or by proxy for each share of the Voting Common Stock standing in such
holder's name on the stock transfer records of the Corporation, and each holder
of record of shares of Non-Voting Common Stock on the relevant record date
shall not be entitled to cast any votes in person or by proxy.
(3) No Cumulative Voting. The holders of shares of Voting Common Stock
shall not have cumulative voting rights.
(4) Conversion of Non-Voting Common Stock. Each share of Non-Voting
Common Stock shall be convertible, at the option of its record holder, into one
validly issued, fully paid and non-assessable share of Voting Common Stock at
any time. At the time of a voluntary conversion, the record holder of shares of
NonVoting Common Stock shall deliver to the principal office of the Corporation
or any transfer agent for shares of the Voting Common Stock (i) the certificate
or certificates representing the shares of Non-Voting Common Stock to be
converted, duly endorsed in blank or accompanied by
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proper instruments of transfer, and (ii) written notice to the Corporation
specifying the number of shares of Non-Voting Common Stock to be converted into
shares of Voting Common Stock and stating the name or names (with addresses)
and denominations in which the certificate or certificates representing the
shares of Voting Common Stock issuable upon such conversion are to be issued
and including instructions for the delivery thereof. Conversion shall be deemed
to have been effected at the time when delivery is made to the Corporation of
both such written notice and the certificate or certificates representing the
shares of Non-Voting Common Stock to be converted or such later time as may be
specified in such written notice, and as of such time each person named in such
written notice as the person to whom a certificate representing shares of
Non-Voting Common Stock is to be issued shall be deemed to be the holder of
record of the number of shares of Voting Common Stock to be evidenced by that
certificate. Delivery of such certificates and such written notice shall
obligate the Corporation to issue such shares of Voting Common Stock, and
thereupon the Corporation or its transfer agent shall promptly issue and
deliver at such stated address to such record holder of shares of Voting Common
Stock a certificate or
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certificates representing the number of shares of Voting Common Stock to which
such record holder is entitled by reason of such conversion, and shall cause
such shares of Voting Common Stock to be registered in the name of such record
holder.
(5) Unconverted Shares. In the event of the conversion of less than
all of the shares of Non-Voting Common Stock evidenced by a certificate
surrendered to the Corporation in accordance with the procedures of
subparagraphs (b)(4) of this Article FOURTH hereof, the Corporation shall
execute and deliver to or upon the written order of the holder of such
unconverted shares, without charge to such holder, a new certificate evidencing
the number of shares of Non-Voting Common Stock not converted.
(6) Reservation. The Corporation hereby reserves and shall at all
times reserve and keep available, out of its authorized and unissued shares of
Voting Common Stock, for the purposes of effecting conversions, such number of
duly authorized shares of Voting Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Non-Voting
Common Stock. The Corporation covenants that all of the shares of Voting Common
Stock so issuable shall, when so
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issued, be duly and validly issued, fully paid and non-assessable, and free
from liens and charges. The Corporation shall take all action as may be
necessary to ensure that all such shares of Voting Common Stock may be so
issued without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which the shares of
Voting Common Stock are or may be listed, or of any inter-dealer quotation
system of a registered national securities association upon which the shares of
Voting Common Stock are or may be listed.
(7) Dividends; Stock Splits. Subject to the rights of the holders of
Preferred Stock, and subject to any other provisions of this Amended and
Restated Certificate of Incorporation, as it may be amended from time to time,
holders of shares of Voting Common Stock and shares of Non-Voting Common Stock
shall be entitled to receive such dividends and other distributions in cash,
stock or property of the Corporation when, as and if declared thereon by the
Board of Directors from time to time out of assets or funds of the Corporation
legally available therefor. If, at any time, a dividend or other distribution
in cash or other property (other than dividends or other distributions payable
in shares of Voting Common
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Stock or other voting securities of the Corporation, or rights, options or
warrants to purchase shares of Voting Common Stock or other voting securities
of the Corporation or securities convertible into or exchangeable for shares of
Voting Common Stock or other voting securities of the Corporation) is declared
or paid on the shares of Voting Common Stock or shares of Non-Voting Common
Stock, a like dividend or other distribution in cash or other property shall
also be declared or paid, as the case may be, on shares of Non-Voting Common
Stock or shares of Voting Common Stock, as the case may be, in an equal amount
per share. If, at any time, a dividend or other distribution payable in shares
of Common Stock or other securities of the Corporation, or rights, options or
warrants to purchase shares of Common Stock or other securities of the
Corporation, or securities convertible into or exchangeable for shares of
Common Stock or other securities of the Corporation is paid or declared on
shares of Voting Common Stock or Non-Voting Common Stock, a like dividend or
other distribution shall also be paid or declared, as the case may be, on
shares of Non-Voting Common Stock or Voting Common Stock, as the case may be,
in an equal amount per share; provided, that, for this purpose, if shares of
Voting Common Stock or other voting
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securities of the Corporation, or rights, options or warrants to purchase
shares of Voting Common Stock or other voting securities of the Corporation or
securities convertible into or exchangeable for shares of Voting Common Stock
or other voting securities of the Corporation, are paid on shares of Voting
Common Stock, and shares of Non-Voting Common Stock or non-voting securities
identical to the other securities paid on the shares of Voting Common Stock
(except that the securities paid on the Non-Voting Common Stock will have no
votes per share) or rights, options or warrants to purchase shares of
Non-Voting Common Stock or such other non-voting securities or securities
convertible into or exchangeable for shares of Non-Voting Common Stock or such
other non-voting securities, are paid on shares of Non-Voting Common Stock, in
an equal amount per share of Voting Common Stock and Non-Voting Common Stock,
such dividend or other distribution shall be deemed to be a like dividend or
other distribution. In the case of any split, subdivision, combination or
reclassification of shares of Voting Common Stock or Non-Voting Common Stock,
the shares of Non-Voting Common Stock or Voting Common Stock, as the case may
be, shall also be split, subdivided, combined or reclassified so that the
number of shares of Voting Common Stock and Non-
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Voting Common Stock outstanding immediately following such split, subdivision,
combination or reclassification shall bear the same relationship to each other
as did the number of shares of Voting Common Stock and Non-Voting Common Stock
outstanding immediately prior to such split, subdivision, combination or
reclassification.
(8) Liquidation, Dissolution, etc. In the event of any liquidation,
dissolution or winding up (either voluntary or involuntary) of the Corporation,
the holders of shares of Voting Common Stock and the holders of shares of
Non-Voting Common Stock shall be entitled to receive the assets and funds of
the Corporation available for distribution after payments to creditors and to
the holders of any Preferred Stock of the Corporation that may at the time be
outstanding, in proportion to the number of shares held by them, respectively,
without regard to class.
(9) Merger, etc. In the event of a merger or consolidation of the
Corporation with or into another entity (whether or not the Corporation is the
surviving entity), the holders of each share of Voting Common Stock and
Non-Voting Common Stock shall be entitled to receive the same per share
consideration on a per share basis; provided that, if such consideration shall
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consist in any part of voting securities (or of options or warrants to
purchase, or of securities convertible into or exchangeable for, voting
securities), the holders of shares of Non-Voting Common Stock may receive, on a
per share basis, non-voting securities, or securities convertible into or
exchangeable for, non-voting securities).
(10) No Preemptive or Subscription Rights. No holder of shares of
Voting Common Stock or Non-Voting Common Stock shall be entitled to preemptive
or subscription rights.
(11) Power to Sell and Purchase Shares. Subject to the requirements of
applicable law, the Corporation shall have the power to issue and sell all or
any part of any shares of any class of stock herein or hereafter authorized to
such persons, and for such consideration, as the Board of Directors shall from
time to time, in its discretion, determine, whether or not greater
consideration could be received upon the issue or sale of the same number of
shares of another class, and as otherwise permitted by law. Subject to the
requirements of applicable law, the Corporation shall have the power to
purchase any shares of any class of stock herein or hereafter authorized from
such persons, and for such
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consideration, as the Board of Directors shall from time to time, in its
discretion, determine, whether or not less consideration could be paid upon the
purchase of the same number of shares of another class, and as otherwise
permitted by law.
(c) Preferred Stock. The Board of Directors is hereby expressly
authorized to provide for the issuance of all or any shares of the Preferred
Stock in one or more classes or series, and to fix for each such class or
series such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated and expressed in the resolution or resolutions adopted by the
Board of Directors providing for the issuance of such class or series,
including, without limitation, the authority to provide that any such class or
series may be (i) subject to redemption at such time or times and at such price
or prices; (ii) entitled to receive dividends (which may be cumulative or
non-cumulative) at such rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes or any other series; (iii) enti-
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tled to such rights upon the dissolution of, or upon any distribution of the
assets of, the Corporation; or (iv) convertible into, or exchangeable for,
shares of any other class or classes of stock, or of any other series of the
same or any other class or classes of stock, of the Corporation at such price
or prices or at such rates of exchange and with such adjustments; all as may be
stated in such resolution or resolutions.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.
(b) The number of directors of the Corporation shall be as from time
to time fixed by, or in the manner provided in, the By-Laws of the Corporation.
Election of directors need not be by written ballot unless the By-Laws so
provide.
(c) The directors shall be divided into three classes, designated
Class I, Class II and Class III.
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Each class shall consist, as nearly as may be possible, of one-third of the
total number of directors constituting the entire Board of Directors. The
initial division of the Board of Directors into classes shall be made by the
decision of the affirmative vote of a majority of the entire Board of
Directors. The term of the initial Class I directors shall terminate on the
date of the 1998 annual meeting; the term of the initial Class II directors
shall terminate on the date of the 1999 annual meeting; and the term of the
initial Class III directors shall terminate on the date of the 2000 annual
meeting. At each succeeding annual meeting of stockholders beginning in 1998,
successors to the class of directors whose term expires at that annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible, and
any additional director of any class elected to fill a vacancy resulting from
an increase in such class shall hold office for a term that shall coincide with
the remaining term of that class, but in no case will a decrease in the number
of directors shorten the term of any incumbent director.
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(d) A director shall hold office until the annual meeting for the year
in which his or her term expires and until his or her successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
(e) Subject to the terms of any one or more classes or series of
Preferred Stock, any vacancy on the Board of Directors that results from an
increase in the number of directors may be filled by a majority of the Board of
Directors then in office, provided that a quorum is present, and any other
vacancy occurring on the Board of Directors may be filled by a majority of the
Board of Directors then in office, even if less than a quorum, or by a sole
remaining director. Any director of any class elected to fill a vacancy
resulting from an increase in the number of directors of such class shall hold
office for a term that shall coincide with the remaining term of that class.
Any director elected to fill a vacancy not resulting from an increase in the
number of directors shall have the same remaining term as that of his
predecessor. Subject to the rights, if any, of the holders of shares of
Preferred Stock then outstanding, any or all of the directors of the
Corporation may be removed from
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office at any time, but only for cause and only by the affirmative vote of the
holders of at least [a majority] of the voting power of the Corporation's then
outstanding capital stock entitled to vote generally in the election of
directors. Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preferred Stock issued by the Corporation shall have
the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of this Amended and Restated Certificate of Incorporation
applicable thereto, and such directors so elected shall not be divided into
classes pursuant to this Article FIFTH unless expressly provided by such terms.
(f) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the GCL, this
Amended and Restated Certificate of Incorporation, and any By-Laws adopted by
the stockholders; provided, however, that no By-Laws
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hereafter adopted by the stockholders shall invalidate any prior act of the
directors which would have been valid if such By-Laws had not been adopted.
SIXTH: No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the GCL as the same exists or may hereafter be
amended. If the GCL is amended hereafter to authorize the further elimination
or limitation of the liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
authorized by the GCL, as so amended. Any repeal or modification of this
Article SIXTH by the stockholders of the Corporation shall not adversely affect
any right or protection of a director of the Corporation existing at the time
of such repeal or modification with respect to acts or omissions occurring
prior to such repeal or modification.
SEVENTH: The Corporation shall indemnify its directors and officers
to the fullest extent authorized or permitted by law, as now or hereafter in
effect, and such
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right to indemnification shall continue as to a person who has ceased to be a
director or officer of the Corporation and shall inure to the benefit of his or
her heirs, executors and personal and legal representatives; provided, however,
that, except for proceedings to enforce rights to indemnification, the
Corporation shall not be obligated to indemnify any director or officer (or his
or her heirs, executors or personal or legal representatives) in connection
with a proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized or consented to by the Board of
Directors. The right to indemnification conferred by this Article SEVENTH shall
include the right to be paid by the Corporation the expenses incurred in
defending or otherwise participating in any proceeding in advance of its final
disposition.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, provide rights to indemnification and to the advancement of
expenses to employees and agents of the Corporation similar to those conferred
in this Article SEVENTH to directors and officers of the Corporation.
The rights to indemnification and to the advance of expenses
conferred in this Article SEVENTH shall
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not be exclusive of any other right which any person may have or hereafter
acquire under this Amended and Restated Certificate of Incorporation, the
By-Laws of the Corporation, any statute, agreement, vote of stockholders or
disinterested directors or otherwise.
Any repeal or modification of this Article SEVENTH by the stockholders
of the Corporation shall not adversely affect any rights to indemnification and
to the advancement of expenses of a director or officer of the Corporation
existing at the time of such repeal or modification with respect to any acts or
omissions occurring prior to such repeal or modification.
EIGHTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation, and the ability of the
stockholders to consent in writing to the taking of any action is hereby
specifically denied.
NINTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the GCL) outside the State
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of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.
TENTH: In furtherance and not in limitation of the powers conferred
upon it by the laws of the State of Delaware, the Board of Directors shall have
the power to adopt, amend, alter or repeal the Corporation's By-Laws. The
affirmative vote of at least a majority of the entire Board of Directors shall
be required to adopt, amend, alter or repeal the Corporation's By-Laws. The
Corporation's By-Laws also may be adopted, amended, altered or repealed by the
affirmative vote of the holders of at least eighty percent (80%) of the voting
power of the shares entitled to vote at an election of directors.
ELEVENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed in this Amended and
Restated Certificate of Incorporation, the Corporation's By-Laws or the GCL,
and all rights herein conferred upon stockholders are granted subject to such
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reservation; provided, however, that, notwithstanding any other provision of
this Amended and Restated Certificate of Incorporation (and in addition to any
other vote that may be required by law), the affirmative vote of the holders of
at least eighty percent (80%) of the voting power of the shares entitled to
vote at an election of directors shall be required to amend, alter, change or
repeal, or to adopt any provision as part of this Amended and Restated
Certificate of Incorporation inconsistent with the purpose and intent of
Articles FIFTH, EIGHTH and TENTH of this Amended and Restated Certificate of
Incorporation or this Article ELEVENTH.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed and attested to on its
behalf this __th day of _________, 1997.
PRT GROUP INC.
By:
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Name:
Title:
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FORM OF
AMENDED AND RESTATED
BY-LAWS
of
PRT GROUP INC.
A Delaware Corporation
Effective as of ____, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I - OFFICES........................................................ 1
Section 1. Registered Office......................................... 1
Section 2. Other Offices............................................. 1
ARTICLE II - MEETINGS OF STOCKHOLDERS...................................... 1
Section 1. Place of Meetings......................................... 1
Section 2. Annual Meetings........................................... 2
Section 3. Special Meetings.......................................... 2
Section 4. Quorum.................................................... 3
Section 5. Proxies................................................... 4
Section 6. Voting.................................................... 6
Section 7. Nature of Business at Meetings of Stockholders............ 6
Section 8. List of Stockholders Entitled to Vote..................... 9
Section 9. Stock Ledger.............................................. 10
Section 10. Record Date. ............................................ 10
Section 11. Inspectors of Election.................................... 12
ARTICLE III - DIRECTORS.................................................... 13
Section 1. Number and Election of Directors.......................... 13
Section 2. Nomination of Directors................................... 13
Section 3. Vacancies................................................. 17
Section 4. Duties and Powers......................................... 17
Section 5. Organization.............................................. 18
Section 6. Resignations and Removals of Directors.................... 18
Section 7. Meetings.................................................. 19
Section 8. Quorum.................................................... 20
Section 9. Actions of Board.......................................... 20
Section 10. Meetings by Means of Conference Telephone................. 21
Section 11. Committees................................................ 21
Section 12. Compensation.............................................. 22
Section 13. Interested Directors...................................... 23
ARTICLE IV - OFFICERS...................................................... 24
Section 1. General................................................... 24
Section 2. Election.................................................. 25
Section 3. Voting Securities Owned by the Corporation................ 25
Section 4. Chairman of the Board of Directors........................ 26
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Section 5. President................................................. 27
Section 6. Vice Presidents........................................... 28
Section 7. Secretary................................................. 28
Section 8. Treasurer................................................. 30
Section 9. Assistant Secretaries..................................... 31
Section 10. Assistant Treasurers...................................... 31
Section 11. Other Officers............................................ 32
ARTICLE V - STOCK.......................................................... 32
Section 1. Form of Certificates...................................... 32
Section 2. Signatures................................................ 33
Section 3. Lost, Destroyed, Stolen or
Mutilated Certificates.................................... 33
Section 4. Transfers................................................. 34
Section 5. Transfer and Registry Agents.............................. 35
Section 6. Beneficial Owners......................................... 35
ARTICLE VI - NOTICES....................................................... 35
Section 1. Notices................................................... 35
Section 2. Waivers of Notice......................................... 36
ARTICLE VII - GENERAL PROVISIONS........................................... 37
Section 1. Dividends................................................. 37
Section 2. Disbursements............................................. 38
Section 3. Fiscal Year............................................... 38
Section 4. Corporate Seal............................................ 38
ARTICLE VIII - INDEMNIFICATION............................................. 38
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other
than Those by or in the Right of the Corporation.......... 38
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or
in the Right of the Corporation........................... 40
Section 3. Authorization of Indemnification.......................... 41
Section 4. Good Faith Defined........................................ 42
Section 5. Indemnification by a Court................................ 43
Section 6. Expenses Payable in Advance............................... 44
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses.................................................. 44
Section 8. Insurance................................................. 45
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Section 9. Certain Definitions....................................... 46
Section 10. Survival of Indemnification and Advancement of Expenses... 47
Section 11. Limitation on Indemnification............................. 47
Section 12. Indemnification of Employees and Agents................... 48
ARTICLE IX - AMENDMENTS.................................................... 48
Section 1. Amendments................................................ 48
Section 2. Entire Board of Directors................................. 49
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FORM OF
AMENDED AND RESTATED
BY-LAWS
OF
PRT GROUP INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the Board
of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place,
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either within or without the State of Delaware, as shall be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of stockholders shall
be held on such date and at such time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect directors, and transact such other
business as may properly be brought before the meeting. Written notice of the
annual meeting stating the place, date and hour of the meeting shall be given
to each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the certificate of incorporation of the Corporation, as amended and restated
from time to time (the "Certificate of Incorporation"), special meetings of
stockholders, for any purpose or purposes, may be called by either (i) the
Chairman of the Board of Directors, (ii) the President, or (iii) the Board of
Direc-
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tors. Such request shall state the purpose or purposes of the proposed meeting.
At a special meeting of the stockholders, only such business shall be conducted
as shall be specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors. Written notice of a
special meeting stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called shall be given not less than ten
nor more than sixty days before the date of the meeting to each stockholder
entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. A quorum, once established, shall
not be broken by the withdrawal of enough votes to leave less than a quorum.
If, however, such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat, present
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in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder entitled to vote at the meeting not
less than ten nor more than sixty days before the date of the meeting.
Section 5. Proxies. Any stockholder entitled to vote may do so in
person or by his or her proxy appointed by an instrument in writing subscribed
by such stockholder or by his or her attorney thereunto authorized, delivered
to the Secretary of the meeting; provided, however, that no proxy shall be
voted or acted upon after three years from its date, unless said proxy provides
for a longer period. Without limiting the manner in which a stockholder may
authorize another person or
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persons to act for him or her as proxy, either of the following shall
constitute a valid means by which a stockholder may grant such authority:
(i) A stockholder may execute a writing authorizing another person or
persons to act for him or her as proxy. Execution may be accomplished by
the stockholder or his or her authorized officer, director, employee or
agent signing such writing or causing his or her signature to be affixed to
such writing by any reasonable means, including, but not limited to, by
facsimile signature.
(ii) A stockholder may authorize another person or persons to act for
him or her as proxy by transmitting or authorizing the transmission of a
telegram or other means of electronic transmission to the person who will
be the holder of the proxy or to a proxy solicitation firm, proxy support
service organization or like agent duly authorized by the person who will
be the holder of the proxy to receive such transmission, provided that any
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such telegram or other means of electronic transmission must either
set forth or be submitted with information from which it can be determined
that the telegram or other electronic transmission was authorized by the
stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission authorizing another person or persons to act as proxy
for a stockholder may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used; provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
Section 6. Voting. At all meetings of the stockholders at which a
quorum is present, except as otherwise required by law, the Certificate of
Incorporation or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the affirmative vote of the holders of a
majority of the total number of votes of the capital stock present in person or
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represented by proxy and entitled to vote on such question, voting as a single
class. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his or her discretion,
may require that any votes cast at such meeting shall be cast by written
ballot.
Section 7. Nature of Business at Meetings of Stockholders. No business
may be transacted at an annual meeting of stockholders, other than business
that is either (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors (or any duly
authorized committee thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (c) otherwise properly brought before the
annual meeting by any stockholder of the Company (i) who is a stockholder of
record on the date of the giving of the notice provided for in this Section 7
and on the record date for the determination of stockholders entitled to vote
at such annual meeting and (ii) who complies with the notice procedures set
forth in this Section 7.
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In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary
of the Company.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Company not less than sixty (60) days nor more than ninety (90) days prior to
the anniversary date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure of the date of the annual meeting was made, whichever
first occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth as to each matter such stockholder proposes to bring before the
annual
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meeting (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of such stockholder, (iii) the class
or series and number of shares of capital stock of the Company which are owned
beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stockholder in
such business and (v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting.
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 7, provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 7 shall be deemed to preclude discussion by
any stockholder of any such business. If the Chairman of
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an annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
Section 8. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of
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the meeting during the whole time thereof, and may be inspected by any
stockholder of the Corporation who is present.
Section 9. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 8 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 10. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors and
which record date: (1) in the case of determination of stockholders entitled to
vote at any meeting of stock-
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holders or adjournment thereof, shall not be more than sixty nor less than ten
days before the date of such meeting; and (2) in the case of any other action,
shall not be more than sixty days prior to such other action. If no record date
is fixed: (1) the record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held; and (2) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 11. Inspectors of Election. In advance of any meeting of
stockholders, the Board by resolution or the Chairman or President shall
appoint one or
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more inspectors of election to act at the meeting and make a written report
thereof. One or more other persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate is
present, ready and willing to act at a meeting of stockholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Unless
otherwise required by law, inspectors may be officers, employees or agents of
the Corporation. Each inspector, before entering upon the discharge of his or
her duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspector shall have the duties prescribed by law and shall take
charge of the polls and, when the vote is completed, shall make a certificate
of the result of the vote taken and of such other facts as may be required by
law.
ARTICLE III
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DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than five nor more than eleven members, the exact
number of which shall be determined from time to time by resolution adopted by
the Board of Directors. Except as provided in Section 3 of this Article III,
directors shall be elected by the stockholders at the annual meetings of
stockholders, and each director so elected shall hold office until such
director's successor is duly elected and qualified, or until such director's
death, or until such director's earlier resignation or removal. Directors need
not be stockholders.
Section 2. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Company, except as may be otherwise provided in the
Certificate of Incorporation with respect to the right of holders of preferred
stock of the Corporation to nominate and elect a specified number of directors
in certain circumstances. Nominations of persons for election to the Board of
Directors may be made at any annual meeting
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of stockholders, or at any special meeting of stockholders called for the
purpose of electing directors, (a) by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (b) by any stockholder
of the Company (i) who is a stockholder of record on the date of the giving of
the notice provided for in this Section 2 and on the record date for the
determination of stockholders entitled to vote at such meeting and (ii) who
complies with the notice procedures set forth in this Section 2.
In addition to any other applicable requirements, for a nomination to
be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Company.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Company (a) in the case of an annual meeting, not less than sixty (60) days nor
more than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not
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within thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the close
of business on the tenth (10th) day following the day on which such notice of
the date of the annual meeting was mailed or such public disclosure of the date
of the annual meeting was made, whichever first occurs; and (b) in the case of
a special meeting of stockholders called for the purpose of electing directors,
not later than the close of business on the tenth (10th) day following the day
on which notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Company which are owned beneficially or of record by the person and (iv) any
other information relating to
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the person that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice (i) the
name and record address of such stockholder, (ii) the class or series and
number of shares of capital stock of the Company which are owned beneficially
or of record by such stockholder, (iii) a description of all arrangements or
understandings between such stockholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the nomination(s)
are to be made by such stockholder, (iv) a representation that such stockholder
intends to appear in person or by proxy at the meeting to nominate the persons
named in its notice and (v) any other information relating to such stockholder
that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the
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rules and regulations promulgated thereunder. Such notice must be accompanied
by a written consent of each proposed nominee to being named as a nominee and
to serve as a director if elected.
No person shall be eligible for election as a director of the Company
unless nominated in accordance with the procedures set forth in this Section 2.
If the Chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective nomination shall
be disregarded.
Section 3. Vacancies. Subject to the terms of any one or more classes
or series of preferred stock, any vacancy on the Board of Directors that
results from an increase in the number of directors may be filled by a majority
of the directors then in office, provided that a quorum is present, and any
other vacancy occurring on the Board of Directors may be filled by a majority
of the Board of Directors then in office, even if less than a quorum, or by a
sole remaining director. Notwithstanding the foregoing, whenever the holders of
any one or more
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class or classes or series of preferred stock of the Corporation shall have the
right, voting separately as a class, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the Certificate of
Incorporation.
Section 4. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as
are not by statute or by the Certificate of Incorporation or by these By-Laws
required to be exercised or done by the stockholders.
Section 5. Organization. At each meeting of the Board of Directors,
the Chairman of the Board of Directors, or, in his or her absence, a director
chosen by a majority of the directors present, shall act as Chairman. The
Secretary of the Corporation shall act as Secretary at each meeting of the
Board of Directors. In case the Secretary shall be absent from any meeting of
the Board of Directors, an Assistant Secretary shall perform the duties of
Secretary at such meeting; and in
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the absence from any such meeting of the Secretary and all the Assistant
Secretaries, the Chairman of the meeting may appoint any person to act as
Secretary of the meeting.
Section 6. Resignations and Removals of Directors. Any director of the
Corporation may resign at any time, by giving written notice to the Chairman of
the Board of Directors, the President or the Secretary of the Corporation. Such
resignation shall take effect at the time therein specified or, if no time is
specified, immediately; and, unless otherwise specified in such notice, the
acceptance of such resignation shall not be necessary to make it effective.
Except as otherwise required by law and subject to the rights, if any, of the
holders of shares of preferred stock then outstanding, any director or the
entire Board of Directors may be removed from office at any time, but only for
cause, and only by the affirmative vote of the holders of at least a majority
in voting power of the issued and outstanding capital stock of the Corporation
entitled to vote in the election of directors.
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Section 7. Meetings. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held at such time
and at such place as may from time to time be determined by the Board of
Directors and, unless required by resolution of the Board of Directors, without
notice. Special meetings of the Board of Directors may be called by the
Chairman of the Board of Directors, the Vice Chairman, if there be one, or a
majority of the directors then in office. Notice thereof stating the place,
date and hour of the meeting shall be given to each director either by mail not
less than forty-eight (48) hours before the date of the meeting, by telephone,
facsimile or telegram on twenty-four (24) hours' notice, or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
Section 8. Quorum. Except as may be otherwise required by law, the
Certificate of Incorporation or these By-Laws, at all meetings of the Board of
Directors, a majority of the entire Board of Directors shall consti-
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tute a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum shall not be present at any meeting of the
Board of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting of the time
and place of the adjourned meeting, until a quorum shall be present.
Section 9. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee
thereof may be taken without a meeting, if all the members of the Board of
Directors or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 10. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws,
members of the Board of Directors of the Corporation, or any committee desig-
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nated by the Board of Directors, may participate in a meeting of the Board of
Directors or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 10 shall constitute presence in person at such meeting.
Section 11. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors
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to act at the meeting in the place of any absent or disqualified member. Any
committee, to the extent permitted by law and provided in the resolution
establishing such committee, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation. Each committee shall keep regular minutes and
report to the Board of Directors when required.
Section 12. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
salary, or such other emoluments as the Board of Directors shall from time to
time determine. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 13. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and
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any other corporation, partnership, association, or other organization in which
one or more of its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because such person's or their votes are counted for
such purpose if (i) the material facts as to such person's or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or (ii) the material facts
as to such person's or their relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or (iii) the contract or trans-
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action is fair as to the Corporation as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors, in its discretion, may also choose a Chairman of the
Board of Directors (who must be a director) and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law, the
Certificate of Incorporation or these By-Laws. The officers of the Corporation
need not be stockholders of the Corporation nor, except in the
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case of the Chairman of the Board of Directors, need such officers be directors
of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each Annual Meeting of Stockholders shall elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier resignation
or removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the
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President or any Vice President and any such officer may, in the name of and on
behalf of the Corporation, take all such action as any such officer may deem
advisable to vote in person or by proxy at any meeting of security holders of
any corporation in which the Corporation may own securities and at any such
meeting shall possess and may exercise any and all rights and power incident to
the ownership of such securities and which, as the owner thereof, the
Corporation might have exercised and possessed if present. The Board of
Directors may, by resolution, from time to time confer like powers upon any
other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall be the Chief Executive Officer of the Corporation, and except
where by law the signature of the President is required, the Chairman of the
Board of Directors shall possess the same power as the President to sign all
contracts, certificates and other instruments of the Corporation which may be
authorized by the Board
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of Directors. During the absence or disability of the President, the Chairman
of the Board of Directors shall exercise all the powers and discharge all the
duties of the President. The Chairman of the Board of Directors shall also
perform such other duties and may exercise such other powers as from time to
time may be assigned to him or her by these By-Laws or by the Board of
Directors.
Section 5. President. The President shall, subject to the control of
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. The President shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these By-Laws, the Board of Directors
or the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall
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preside at all meetings of the stockholders and the Board of Directors. If
there be no Chairman of the Board of Directors, the President shall be the
Chief Executive Officer of the Corporation. The President shall also perform
such other duties and may exercise such other powers as from time to time may
be assigned to him or her by these By-Laws or by the Board of Directors.
Section 6. Vice Presidents. At the request of the President or in his
or her absence or in the event of his or her inability or refusal to act (and
if there be no Chairman of the Board of Directors), the Vice President or the
Vice Presidents if there is more than one (in the order designated by the Board
of Directors) shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. Each Vice President shall perform such other duties and have such
other powers as the Board of Directors from time to time may prescribe. If
there be no Chairman of the Board of Directors and no Vice President, the Board
of Directors shall designate the officer of the Corporation who, in the absence
of the President or in the event of the
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inability or refusal of the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors or President, under whose supervision the Secretary shall be. If the
Secretary shall be unable or shall refuse to cause to be given notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and if there be no Assistant Secretary, then either the Board of Directors or
the President may choose another officer to cause such notice to be given. The
Secretary shall have custody of the seal of the Corporation and the Secretary
or any
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Assistant Secretary, if there be one, shall have authority to affix the same to
any instrument requiring it and when so affixed, it may be attested by the
signature of the Secretary or by the signature of any such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his or her signature.
The Secretary shall see that all books, reports, statements, certificates and
other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
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its regular meetings, or when the Board of Directors so requires, an account of
all transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give
the Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of the office of Treasurer and for the restoration to the Corporation,
in case of the Treasurer's death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in the Treasurer's possession or under control of the Treasurer belonging
to the Corporation.
Section 9. Assistant Secretaries. Except as may be otherwise provided
in these By-Laws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Vice President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his or her
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have
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all the powers of and be subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in
the event of the Treasurer's disability or refusal to act, shall perform the
duties of the Treasurer, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Treasurer. If required by the Board
of Directors, an Assistant Treasurer shall give the Corporation a bond in such
sum and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of the office of Assistant
Treasurer and for the restoration to the Corporation, in case of the Assistant
Treasurer's death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in the
Assistant Treasurer's possession or
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under control of the Assistant Treasurer belonging to the Corporation.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation, (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number
of shares owned by such holder of stock in the Corporation.
Section 2. Signatures. Any or all of the signatures on a certificate
may be a facsimile. In case
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any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such person were such
officer, transfer agent or registrar at the date of issue.
Section 3. Lost, Destroyed, Stolen or Mutilated Certificates. The
Board of Directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or such person's legal
representative, to advertise the same in such manner as the Board of Directors
shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be
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made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these By-Laws. Transfers of stock shall
be made on the books of the Corporation only by the person named in the
certificate or by such person's attorney lawfully constituted in writing and
upon the surrender of the certificate therefor, properly endorsed for transfer
and payment of all necessary transfer taxes; provided, however, that such
surrender and endorsement or payment of taxes shall not be required in any case
in which the officers of the Corporation shall determine to waive such
requirement. Every certificate exchanged, returned or surrendered to the
Corporation shall be marked "Cancelled," with the date of cancellation, by the
Secretary or Assistant Secretary of the Corporation or the transfer agent
thereof. No transfer of stock shall be valid as against the Corporation for any
purpose until it shall have been entered in the stock records of the
Corporation by an entry showing from and to whom transferred.
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Section 5. Transfer and Registry Agents. The Corporation may from time
to time maintain one or more transfer offices or agencies and registry offices
or agencies at such place or places as may be determined from time to time by
the Board of Directors.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by
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mail, addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, facsimile, telex or cable.
Section 2. Waivers of Notice.
(a) Whenever any notice is required by law, the Certificate of
Incorporation or these By-Laws, to be given to any director, member of a
committee or stockholder, a waiver thereof in writing, signed, by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting, present by person or represented by proxy, shall constitute a waiver
of notice of such meeting, except where the person attends the meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.
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(b) Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice unless
so required by law, the Certificate of Incorporation or these By-Laws.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Subject to the requirements of the Delaware
General Corporation Law ("GCL") and the provisions of the Certificate of
Incorporation, dividends upon the capital stock of the Corporation may be
declared by the Board of Directors at any regular or special meeting of the
Board of Directors, and may be paid in cash, in property, or in shares of the
Corporation's capital stock. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve or reserves to meet contingencies, or for purchasing
any of the shares of
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capital stock, warrants, rights, options, bonds, debentures, notes, scrip or
other securities or evidences of indebtedness of the Corporation, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any other proper purpose, and the Board of Directors may
modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
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ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other
than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of
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the Corporation, and, with respect to any criminal action or proceeding, such
person had no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that such person did not act in good faith and in
a manner which such person reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or
in the Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that such person is or was a director or officer of the Corporation,
or is or was a director or officer of the Corporation serving at the
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request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article VIII (unless ordered by a court) shall be made by the Corporation
only
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as authorized in the specific case upon a determination that indemnification of
the director or officer is proper in the circumstances because such person has
met the applicable standard of conduct set forth in Section 1 or Section 2 of
this Article VIII, as the case may be. Such determination shall be made (i) by
a majority vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (iii) by the stockholders. To the extent, however, that a
director or officer of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection therewith, without the necessity of authorization
in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
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faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the Corporation, or, with respect to any criminal
action or proceeding, to have had no reasonable cause to believe his or her
conduct was unlawful, if such person's action is based on the records or books
of account of the Corporation or another enterprise, or on information supplied
to such person by the officers of the Corporation or another enterprise in the
course of their duties, or on the advice of legal counsel for the Corporation
or another enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used in
this Section 4 shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such person
is or was serving at the request of the Corporation as a director, officer,
employee or agent. The provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any way the circumstances in
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which a person may be deemed to have met the applicable standard of conduct set
forth in Section 1 or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to the Court of Chancery of the State of Delaware or any
other court of competent jurisdiction in the State of Delaware for
indemnification to the extent otherwise permissible under Sections 1 and 2 of
this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because such person has met the applicable
standards of conduct set forth in Section 1 or 2 of this Article VIII, as the
case may be. Neither a contrary determination in the specific case under
Section 3 of this Article VIII nor the absence of any determination
thereunder shall be a defense to such application or create a presumption that
the director or officer seeking indemnification has not met any applicable
standard of
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conduct. Notice of any application for indemnification pursuant to this Section
5 shall be given to the Corporation promptly upon the filing of such
application. If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under the Certif-
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icate of Incorporation or any By-Law, agreement, contract, vote of stockholders
or disinterested directors or pursuant to the direction (howsoever embodied) of
any court of competent jurisdiction or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office, it being the policy of the Corporation that indemnification of the
persons specified in Section 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or 2 of this Article VIII but whom the Corporation has the power or
obligation to indemnify under the provisions of the GCL, or otherwise.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or
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other enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such, whether or not the Corporation would have the power or the
obligation to indemnify such person against such liability under the provisions
of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer
of such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such
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person would have with respect to such constituent corporation if its separate
existence had continued. For purposes of this Article VIII, references to
"fines" shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by, such
director or officer with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner such
person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VIII shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director or officer
and shall inure to
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the benefit of the heirs, executors and administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify any director or
officer (or his or her heirs, executors or personal or legal representatives)
or advance expenses in connection with a proceeding (or part thereof) initiated
by such person unless such proceeding (or part thereof) was authorized or
consented to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
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ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be adopted by the Board of
Directors or by the stockholders as provided in the Certificate of
Incorporation.
Section 2. Entire Board of Directors. As used in this Article IX and
in these By-Laws generally, the term "entire Board of Directors" means the
total number of directors which the Corporation would have if there were no
vacancies.
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FORM OF
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
September 16, 1997, between The Mellinger Group LLC ("TMG") and PRT Group Inc.
(the "Company").
WHEREAS, as of the date of this Agreement, TMG owns
6,477,750 shares of the Company's voting common stock, par value $.001 per
share (the "Common Stock");
WHEREAS, the Company is consummating on the date hereof an
underwritten public offering (the "Offering") shares of the Common Stock;
WHEREAS, the Board of Directors of the Company has
authorized the officers of the Company to execute and deliver this Agreement
in the name and on behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties to this Agreement hereby agree as
follows:
1. Definitions. As used in this Agreement,
the following terms shall have the following meanings:
"Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder, as amended from time to
time.
"Holder" means TMG and any other person that owns
Registrable Securities. For purposes of this Agreement, the Company may deem
and treat the registered holder of a Registrable Security as the Holder and
absolute owner thereof, and the Company shall not be affected by any notice to
the contrary.
"Registrable Securities" means (a) the Common Stock (i)
owned by TMG (ii) acquired upon the conversion of any shares of the Company's
Series A Convertible Preferred Stock, par value $.01 per share, or (iii) held
by Capital Research and Management Company, Stephen Michaelson or Robert
Marchetti, (iv) acquired by J.P. Morgan Ventures Corporation ("JPMVC") upon
the conversion of the warrants held by JPMVC, in each case upon completion of
the Offering, (b) any Common Stock acquired by TMG in the open market at a
time when TMG is deemed to be
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an Affiliate (as such term is defined under Rule 144 under the Securities Act)
of the Company, and (c) any securities issued or issuable in respect of the
Common Stock referred to in clauses (a) and (b) above, by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, reclassification, merger or consolidation, and any other
securities issued pursuant to any other pro rata distribution with respect to
such Common Stock. For purposes of this Agreement, a Registrable Security
ceases to be a Registrable Security when (x) it has been effectively
registered under the Securities Act and sold or distributed to the public in
accordance with an effective registration statement covering it (and has not
been reacquired in the manner described in clause (b) above), or (y) it is
sold or distributed to the public pursuant to Rule 144 (or any successor or
similar provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder, as amended from time to time.
2. Demand Registration. (a) Subject to Section 5 hereof, if
at any time TMG shall request the Company in writing to register under the
Securities Act all or a part of the Registrable Securities held by TMG (a
"Demand Registration"), the Company shall use all reasonable efforts to cause
to be filed and declared effective as soon as reasonably practicable (but in
no event later than the 45th day after TMG's request is made) a registration
statement, on such appropriate form as the Company in its discretion shall
determine, providing for the sale of all such Registrable Securities by TMG.
The Company agrees to use its best efforts to keep any such registration
statement continuously effective and usable for resale of Registrable
Securities for so long as TMG shall request. The Company shall be obligated to
file up to three (3) registration statements pursuant to this Section 2(a)
until such time as all Registrable Securities have ceased to be Registrable
Securities. Each registration statement filed pursuant to this Section 2(a) is
hereinafter referred to as a "Demand Registration Statement."
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(b) The Company agrees (i) not to effect any public or
private sale, distribution or purchase of any of its securities which are the
same as or similar to the Registrable Securities, including a sale pursuant to
Regulation D under the Securities Act, during the 15-day period prior to, and
during the 45-day period beginning on, the closing date of each underwritten
offering under any Demand Registration Statement, and (ii) to use reasonable
best efforts to cause each holder of its securities purchased from the
Company, at any time on or after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public sale or
distribution of any such securities during such period, including a sale
pursuant to Rule 144 under the Securities Act.
(c) The Company may postpone for a reasonable period of
time, not to exceed 30 days, the filing or the effectiveness of any Demand
Registration Statement if the Board of Directors of the Company in good faith
determines that (A) such registration might have a material adverse effect on
any plan or proposal by the Company with respect to any financing,
acquisition, recapitalization, reorganization or other material transaction,
or (B) the Company is in possession of material non-public information that,
if publicly disclosed, could result in a material disruption of a major
corporate development or transaction then pending or in progress or in other
material adverse consequences to the Company.
(d) If at any time TMG desires to sell Registrable
Securities in an underwritten offering, TMG shall have the right to select any
nationally recognized investment banking firm(s) to administer the offering,
subject to the approval of the Company, which approval shall not be
unreasonably withheld, and the Company shall enter into underwriting
agreements with the underwriter(s) of such offering, which agreements shall
contain such representations and warranties by the Company, and such other
terms, conditions and indemnities as are at the time customarily contained in
underwriting agreements for similar offerings.
3. Incidental Registration. Subject to Section 5
hereof and the other terms and conditions set forth in this Section 3, if the
Company proposes at any time to register any shares of Common Stock (the "Ini-
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tially Proposed Shares") under the Securities Act for sale, whether or not for
its own account, pursuant to an underwritten offering, the Company will
promptly give written notice to the Holders of its intention to effect such
registration (such notice to specify, among other things, the proposed
offering price, the kind and number of securities proposed to be registered
and the distribution arrangements, including identification of the
underwriter(s)), and the Holders shall be entitled to include in such
registration statements, as a part of such underwritten offering, such number
of shares (the "Holder Shares") to be sold for the account of the
Holders (on the same terms and conditions as the Initially Proposed Shares) as
shall be specified in a request in writing delivered to the Company within 15
days after the date upon which the Company gave the aforementioned notice.
The Company's obligations to include Holder Shares in
a registration statement pursuant to this Section 3 is subject to each of the
following limitations, conditions and qualifications:
(i) If, at any time after giving written notice of
its intention to effect a registration of any of its shares of Common
Stock and prior to the effective date of any registration statement
filed in connection with such registration, the Company shall
determine for any reason not to register such shares, the Company
may, at its election, give written notice of such determination to
the Holders and thereupon it shall be relieved of its obligation to
use any efforts to register any Holder Shares in connection with such
aborted registration.
(ii) If, in the opinion of the managing
underwriter(s) of such offering, the distribution of all or a
specified portion of the Holder Shares would materially interfere
with the registration and sale, in accordance with the intended
method thereof, of the Initially Proposed Shares, then the number of
Holder Shares to be included in such registration statement shall be
reduced to such number, if any, that, in the opinion of such managing
underwriter(s), can be included without such interference. If, as a
result of the cutback provisions of the preceding sentence, the
Holders would not be entitled to include all of the Holder Shares
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in such registration, the number of shares of Registrable Securities
to be offered and sold by TMG, Stephen Michaelson and Robert
Marchetti shall be reduced, on a pro rata basis, such that the Holder
Shares (other than those held by TMG, Stephen Michaelson and Robert
Marchetti) may be first offered and sold.
If the Company shall so request in writing, TMG agrees not
to effect any public or private sale or distribution of any Registrable
Securities (other than the Holder Shares) during the 15-day period prior to
and during the 45-day period beginning on, the closing date of any
underwritten public offering of shares of Common Stock made for the Company's
own account.
4. Registration Procedures. (a) Whenever the Company is
required to use all reasonable efforts to effect the registration of any
Registrable Securities under the Securities Act pursuant to the terms and
conditions of Section 2(a) or 3 (such Registrable Securities being hereinafter
referred to as "Subject Shares"), the Company will use all reasonable efforts
to effect the registration and sale of the Subject Shares in accordance with
the intended method of disposition thereof. Without limiting the generality of
the foregoing, the Company will as soon as practicable:
(i) prepare and file with the SEC a registration
statement with respect to the Subject Shares in form and substance
satisfactory to the Holders of the Subject Shares, and use all
reasonable efforts to cause such registration statement to become
effective as soon as possible;
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for the applicable period and to
comply with the provisions of the Securities Act with respect to the
disposition of all Subject Shares and other securities covered by
such registration statement;
(iii) furnish the Holders covered by such
registration statement, without charge, such number
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<PAGE>
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 included in such
registration statement (including each preliminary prospectus), such
documents incorporated by reference in such registration statement or
prospectus, and such other documents, as such Holders may reasonably
request;
(iv) use all reasonable efforts to register or
qualify the Subject Shares covered by such registration statement
under the securities or blue sky laws of such jurisdictions as the
managing underwriter(s) shall reasonably recommend, and do any and
all other acts and things which may be reasonably necessary or
advisable to enable the Holders to consummate the disposition in such
jurisdictions of the Subject Shares covered by such registration
statement, 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 is not so qualified, (B)
subject itself to taxation in any jurisdiction wherein it is not so
subject, or (C) consent to general service of process in any such
jurisdiction or otherwise take any action that would subject it to
the general jurisdiction of the courts of any jurisdiction in which
it is not so subject;
(v) otherwise use its best efforts to
comply with all applicable rules and regulations of
the SEC;
(vi) furnish, at the Company's expense,
unlegended certificates representing ownership of the securities
being sold in such denominations as shall be requested and instruct
the transfer agent to release any stop transfer orders with respect
to the Subject Shares being sold;
(vii) notify each Holder at any time when a
prospectus relating to the Subject Shares is required to be delivered
under the Securities Act of the happening of any event as a result of
which the prospectus included in such Registration Statement contains
any untrue statement of a material fact or
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<PAGE>
omits to state a material fact necessary to make the statements
therein (in the case of the prospectus or any preliminary prospectus,
in light of the circumstances under which they were made) not
misleading, and the Company will, as promptly as practicable
thereafter, prepare and file with the SEC and furnish a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of Subject Shares such prospectus will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(viii) enter into customary agreements (including
an underwriting agreement in customary form in the case of an
underwritten offering) and make such representations and warranties
to the sellers and underwriter(s) as in form and substance and scope
are customarily made by issuers to underwriters in underwritten
offerings and take such other actions as the Holders or the managing
underwriter(s) or agent, if any, reasonably require in order to
expedite or facilitate the disposition of such Subject Shares;
(ix) make available for inspection by the Holders,
any underwriter or agent participating in any disposition pursuant to
such Registration Statement, and any attorney, accountant or other
similar professional advisor retained by any such holders or
underwriter (collectively the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably
requested by any such Inspector in connection with such Registration
Statement. The Holders agree that Records and other information which
the Company determines, in good faith, to be confidential and of
which determination the Inspectors are so notified shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in the
Registration Statement, (ii) the
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release of such Records is ordered pursuant to a subpoena, court
order or regulatory or agency request or (iii) the information in
such Records has been generally disseminated to the public. Each
Holder agrees that it will, upon learning that disclosure of such
Record is sought in a court of competent jurisdiction or by a
governmental agency, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(x) obtain for delivery to the Company, the
underwriter(s) or their agent, with copies to the Holders, a "cold
comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as the Holders or
the managing underwriter(s) reasonably request;
(xi) obtain for delivery to the Holders and the
underwriter(s) or their agent an opinion or opinions from counsel for
the Company in customary form and reasonably satisfactory to the
Holder, underwriters or agents and their counsel;
(xii) make available to its security holders
earnings statements, which need not be audited, satisfying the
provisions of Section 11(a) of the Securities Act no later than 90
days after the end of the 12-month period beginning with the first
month of the Company's first quarter commencing after the
effective date of the Registration Statement, which earnings
statements shall cover said 12-month period;
(xiii) make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the
effectiveness of such registration statement at the earliest possible
moment;
(xiv) cause the Subject Shares to be registered
with or approved by such other governmental agencies or authorities
within the United States
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as may be necessary to enable the sellers thereof or the
underwriters(s), if any, to consummate the disposition of such
Subject Shares;
(xv) cooperate with the Holders and the managing
underwriter(s), if any, or any other interested party (including any
interested broker-dealer) in making any filings or submission
required to be made, and the furnishing of all appropriate
information in connection therewith, with the National Association of
Securities Dealers, Inc. ("NASD");
(xvi) cause its subsidiaries to take action
necessary to effect the registration of the Subject Shares
contemplated hereby, including filing any required financial
information;
(xvii) effect the listing of the Subject Shares on
the Nasdaq National Market or such other national securities exchange
or over-the-counter market on which shares of the Common Stock shall
then be listed; and
(xviii) take all other steps necessary to effect
the registration of the Subject Shares contemplated hereby.
(b) The Holders shall provide (in writing
and signed by the Holders and stated to be specifically for use in the related
registration statement, preliminary prospectus, prospectus or other document
incident thereto) all such information and materials and take all such action
as may be required in order to permit the Company to comply with all
applicable requirements of the SEC and any applicable state securities laws
and to obtain any desired acceleration of the effective date of any
registration statement prepared and filed by the Company pursuant to this
Agreement.
(c) The Holders shall, if requested by
the Company or the managing underwriter(s) in connection with any proposed
registration and distribution pursuant to this Agreement, (i) agree to sell
the Subject Shares on the basis provided in any underwriting arrangements
entered into in connection therewith and (ii) complete and execute all
questionnaires, powers of attorney,
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<PAGE>
indemnities, underwriting agreements and other documents customary in similar
offerings.
(d) Upon receipt of any notice from the
Company that the Company has become aware that the prospectus (including any
preliminary prospectus) included in any registration statement filed pursuant
to Section 2(a) or 3, as then in effect, contains any 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, the
Holders shall forthwith discontinue disposition of Subject Shares pursuant to
the registration statement covering the same until the Holders' receipt
of copies of a supplemented or amended prospectus and, if so directed by the
Company, deliver to the Company (at the Company's expense) all copies
other than permanent file copies then in the Holder's possession, of the
prospectus covering the Subject Shares that was in effect prior to such
amendment or supplement.
(e) The Company shall pay all
out-of-pocket expenses incurred in connection with the first two Demand
Registration Statements filed pursuant to Section 2(a) of this Agreement,
including, without limitation, all SEC and blue sky registration and filing
fees (including NASD fees), printing expenses, transfer agents and
registrars' fees attributable to securities sold for the account of the
Holders pursuant to such registration statement, fees and disbursements of the
Company's counsel and accountants and fees and disbursements of experts
used by the Company in connection with such registration statement, except
that the Holders shall pay on a pro rata basis all underwriting discounts,
commissions and expenses attributable to the Subject Shares sold pursuant to
any such registration statement. TMG shall pay any such out-of-pocket expenses
incurred in connection with the third Demand Registration Statement filed
pursuant to Section 2(a) of this Agreement, except that the Holders shall pay,
on a pro rata basis, all underwriting discounts, commissions and expenses
attributable to the Subject Shares sold pursuant to any such registration
statement. The Company shall pay any such out-of-pocket expenses incurred in
connection with any registration statement filed pursuant to Section 3 of this
Agreement, except that the Holders shall pay, on a pro rata basis, all
underwriting discounts, commissions
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<PAGE>
and expenses attributable to the Subject Shares sold pursuant to any such
registration statement.
(f) In connection with any sale of Subject
Shares that are registered pursuant to this Agreement, the Company and
the Holders shall enter into an agreement providing for indemnification of the
Holders by the Company, and indemnification of the Company by the Holders, on
terms customary for such agreements at that time (it being understood that any
disputes arising as to what is customary shall be resolved by counsel to the
underwriter(s)).
5. Condition to Company's Obligations. Notwithstanding any
other provision in this Agreement to the contrary, the Company shall have no
obligation to effect any registration of Registrable Securities pursuant to
this Agreement within 180 days of the date of the prospectus for the Offering,
unless Smith Barney Inc. shall have given its prior written consent to such
filing.
6. Indemnification.
(a) Indemnification by the Company. The Company will,
without limitation as to time, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder of Registrable Securities registered
pursuant to this Agreement, the officers, directors, agents and employees of
each of them, each person who controls such holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of any such controlling person, from
and against all reasonable and documented losses, claims, damages,
liabilities, costs (including without limitation the costs of investigation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any registration statement, prospectus or form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon 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, except insofar as the same are
based solely upon information furnished in writing to the Company by such
Holder expressly for use therein.
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<PAGE>
(b) Indemnification by Holders of Registrable Securities. In
connection with any registration statement in which a Holder is participating,
such Holder will furnish to the Company in writing such information as the
Company reasonably requests for use in connection with any registration
statement or prospectus and will indemnify, to the fullest extent permitted by
law, the Company, its officers, directors, agents and employees, each person
who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act) and the officers, directors, agents
and employees of any such controlling person, from and against all Losses, as
incurred, arising out of or based upon any untrue or alleged untrue statement
of a material fact contained in any registration statement, prospectus or form
of prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon 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, to the extent, but only to the
extent, that any such statement or omission is contained in any information
furnished in writing to the Company by such Holder expressly for use therein
and was relied upon by the Company in the preparation thereof. In no event
will the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds (net of payment of all expenses) received by
such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligations.
(c) Conduct of Indemnification Proceedings. If any person
shall become entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any action or proceeding with respect to which such
indemnified party seeks indemnification or contribution pursuant hereto;
provided, however, that the failure to so notify the indemnifying party will
not relieve the indemnifying party from any obligation or liability except to
the extent that the indemnifying party has been prejudiced materially by such
failure. All reasonable and documented fees and expenses (including any fees
and expenses incurred in connection with investigating or preparing to defend
such action or proceeding) will be paid to the indemnified party, as
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<PAGE>
incurred, within five calendar days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined that an
indemnified party is not entitled to indemnification hereunder). The
indemnifying party will not consent to entry of any judgment or enter into any
settlement or otherwise seek to terminate any action or proceeding in which
any indemnified party is or could be a party and as to which indemnification
or contribution could be sought by such indemnified party under this Section
6, unless such judgment, settlement or other termination includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance satisfactory to the
indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification
hereunder.
(d) Contribution. If the indemnification provided for in
this Section 6 is unavailable to an indemnified party under Section 6(a) or
6(b) hereof in respect of any Losses or is insufficient to hold such
indemnified party harmless, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, will, jointly and severally,
contribute to the amount paid or payable by such indemnified party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party or parties, on the one hand, and such
indemnified party, on the other hand, in connection with the actions,
statement or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, will be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or related to information supplied by, such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses will be deemed to include any reasonable and documented
legal or other fees or expenses incurred by such party in connection with any
action or proceeding.
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<PAGE>
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 6(d), an
indemnifying party that is a selling Holder will not be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities sold by such indemnifying party and distributed to the
public were offered to the public exceed the amount of any damages which such
indemnifying party has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations contained in this Section 6 will be in addition to any liability
that the indemnifying party or parties may otherwise have to the indemnified
party or parties. The provisions of this Section 6 will survive so long as
Registrable Securities remain outstanding, notwithstanding any transfer of the
Registrable Securities by any Holder thereof or any termination of this
Agreement.
7. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery or delivery by fax at the address or number designated
below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery
(if delivered other than on a business day during normal business hours where
such notice is to be received) or (b) on the third business day following the
date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
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<PAGE>
If to the Company, to:
PRT Group Inc.
342 Madison Avenue, 11th Floor
New York, New York 10173
Attn: Leonard P. Ciriello, Esq.
Fax: (212) 922-0806
If to TMG, to:
The Mellinger Group LLC
342 Madison Avenue, 11th Floor
New York, New York 10173
Attn: Douglas K. Mellinger
Fax: (212) 922-0806
If to any other Holder, to such name at such address as such
Holder shall have indicated in a written notice delivered to
the other parties to this Agreement.
Any party hereto may from time to time change its address for notices under
this Section 6 by giving at least 10 days notice of such changes to the other
parties hereto.
8. Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement hereof shall be deemed to
be a continuing waiver in the future thereof or a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
9. Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit
or affect any of the provisions hereof.
10. Successors and Assigns; Amendments. This Agreement shall
be binding upon and inure to the benefit of the parties and their successors
and assigns, including without limitation and without the need for an express
assignment each subsequent Holder of any Registrable Securities. Except as
provided in this Section 9, neither the Company nor any Holder shall assign
this Agreement or any rights hereunder without the prior
15
<PAGE>
written consent of the other parties hereto. The assignment by a party of this
Agreement or any rights hereunder shall not affect the obligations of such
party hereunder. This Agreement may not be amended except by a written
instrument executed by the parties hereto.
11. No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
12. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without regard to the principles of conflicts of laws.
12. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto in respect of the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof.
13. Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the date hereof.
PRT GROUP INC.
By:
------------------------------
Name:
Title:
THE MELLINGER GROUP LLC
By:
------------------------------
Name:
Title:
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FORM OF
WARRANT EXCHANGE AGREEMENT
WARRANT EXCHANGE AGREEMENT ("Exchange Agreement"), dated as
of September 16, 1997, by and among PRT Group Inc., a Delaware corporation
("PRT"), PRT (Barbados) Ltd. (formerly Total Technology Solutions Limited), a
corporation organized under the laws of Barbados and a wholly-owned subsidiary
of PRT ("PRT Barbados"), certain PRT shareholders set forth on the signature
page hereof ("Shareholders") and J.P. Morgan Ventures Corporation, a
corporation organized under the laws of Delaware ("JPMVC").
WHEREAS, PRT Barbados and JPMVC have entered into a Warrant
Subscription Agreement ("Subscription Agreement"), dated as of July 16, 1996,
pursuant to which JPMVC purchased a certain warrant ("PRT Barbados Warrant")
to purchase shares of common stock of PRT Barbados; and
WHEREAS, PRT Barbados and JPMVC have entered into a Letter
Agreement ("Letter Agreement"), dated as of April 18, 1997, pursuant to which
JPMVC purchased a certain additional warrant ("Additional PRT Barbados
Warrant") to purchase additional shares of common stock of PRT Barbados; and
WHEREAS, in the first quarter of 1997 PRT, PRT Barbados and
JPMVC reached an agreement in principal with respect to, and PRT, PRT
Barbados, the Shareholders and JPMVC now desire to enter into, this Exchange
Agreement providing, among other things, for the exchange by JPMVC of the PRT
Barbados Warrant and the Additional PRT Barbados Warrant for a certain warrant
("PRT Warrant") to purchase shares of Series A Convertible Preferred Stock of
PRT ("Preferred Stock") and/or other securities of PRT (collectively, the
Preferred Stock and/or other securities of PRT are the "PRT Shares" and,
collectively with the PRT Warrant, the "Securities") on the terms and subject
to the conditions set forth in the warrant agreement ("Warrant Agreement"),
attached as Exhibit A hereto, on the terms and subject to the conditions
hereof.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements hereinafter set forth,
<PAGE>
PRT, PRT Barbados, the Shareholders and JPMVC, intending to be legally bound,
hereby agree as follows:
ARTICLE I
AGREEMENT TO ISSUE THE PRT WARRANT
SECTION 1.1. Agreement to Issue the PRT Warrant. On the
basis of the representations, warranties and covenants of the parties hereto
contained herein, PRT is issuing to JPMVC on the date hereof (the "Closing
Date") the PRT Warrant to purchase an aggregate of Nine Hundred Thirty-Six
Thousand Three Hundred Sixty-Five (936,365) PRT Shares (subject to the
provisions of and adjustment as provided in the PRT Warrant). The PRT Warrant
is being issued to JPMVC in exchange for the PRT Barbados Warrant and the
Additional PRT Barbados Warrant. The PRT Warrant and the PRT Shares issuable
upon exercise of the PRT Warrant will be subject to restrictions on transfer
set forth herein, in the PRT Warrant and in the Preferred Stock Purchase
Agreement, dated as of November 21, 1996, by and among PRT and certain of the
Shareholders as in effect on the date hereof ("Preferred Stock Purchase
Agreement") to the extent set forth herein.
SECTION 1.2. The Closing. The PRT Warrant will be issued at
a closing (the "Closing") at the offices of Skadden, Arps, Slate Meagher &
Flom LLP, 919 Third Avenue, New York, New York, 10022, on the Closing Date. At
the Closing, PRT will deliver the PRT Warrant to JPMVC, registered in the name
of JPMVC, and JPMVC will deliver to PRT the PRT Barbados Warrant and the
Additional PRT Barbados Warrant.
SECTION 1.3. Termination and Amendment of Certain Sections
of the Subscription Agreement. (a) Upon the consummation of the transactions
contemplated herein, Sections 4.1 through 4.5 and Section 4.8 of the
Subscription Agreement shall be terminated and of no further force or effect,
without any further action by or on behalf of the parties hereto or thereto.
(b) Upon the consummation of the transactions contemplated
herein, without any further action by or on behalf of the parties hereto or
thereto, the Subscription Agreement shall be amended by deleting the second
sen-
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tence of Section 4.6(a) thereof and replacing it with the
following:
"Such rights shall survive the initial public offering of
TTSL's Common Shares and the initial public offering of
PRT's common stock and shall continue until such time as
JPMVC shall own (or have the right to acquire, directly or
indirectly) less than 3% of the outstanding shares of common
stock of PRT; provided, that such observation rights may not
be transferred by JPMVC to any unrelated third party
purchaser of the Securities or any portion thereof."
SECTION 1.4. Termination of the Registration Rights
Agreement. Upon the consummation of the transactions contemplated herein, the
Registration Rights Agreement, dated as of July 16, 1996, among PRT Barbados
and JPMVC shall be terminated and of no further force or effect, without any
further action by or on behalf of the parties hereto or thereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF JPMVC
JPMVC represents and warrants to PRT as follows:
SECTION 2.1. Access to Information. JPMVC has been afforded
access to all information with respect to the business, operations, and
prospects of PRT that it has requested. The foregoing shall not, however, in
any way limit or qualify JPMVC's right to rely on the representations and
warranties of PRT contained herein.
SECTION 2.2. No Conflicts; Noncontravention; Authorization.
Neither the exchange of the PRT Barbados Warrant and the Additional PRT
Barbados Warrant for the PRT Warrant by JPMVC nor the exercise of the PRT
Warrant nor the ownership of the PRT Shares to be received upon the exercise
of the PRT Warrant will (i) violate any provision of law or regulation
applicable to JPMVC, including, without limiting the foregoing, the Bank
Holding Company Act of 1956, as amended, and the rules and regulations
promulgated thereunder (the "BHCA"), (ii)
3
<PAGE>
contravene the articles of incorporation or by-laws of JPMVC, or (iii) violate
any agreement, judgment, injunction, order, decree or other instrument binding
upon JPMVC. JPMVC has all necessary power and authority to enter into this
Exchange Agreement and to carry out its obligations hereunder and to
consummate the transactions contemplated hereby.
SECTION 2.3. Investment Purpose; Legends. (a) JPMVC is
acquiring the PRT Warrant pursuant to this Exchange Agreement for its own
account, solely for the purpose of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof. JPMVC will not
offer, sell, transfer, pledge, hypothecate or otherwise dispose of the PRT
Warrant or the PRT Shares acquired upon exercise of the PRT Warrant other than
in accordance with the Securities Act of 1933, as amended (the "Securities
Act").
(b) JPMVC understands that (i) the offering and exchange for
the PRT Warrant to be acquired by JPMVC hereunder is intended to be exempt
from registration under the Securities Act pursuant to Section 4(2) of such
Act and (ii) there is no existing public or other market for such PRT Warrant
or PRT Shares acquired upon exercise of the PRT Warrant and there can be no
assurance that JPMVC will be able to sell or dispose of such PRT Warrant or
PRT Shares.
(c) JPMVC understands that PRT shall affix to each
certificate evidencing the PRT Warrant a legend in substantially the following
form:
"THE WARRANT REPRESENTED HEREBY AND THE PREFERRED STOCK, COMMON STOCK
OR OTHER SECURITIES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH WARRANT NOR THE
PREFERRED STOCK, COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON THE
EXERCISE THEREOF NOR ANY INTEREST THEREIN MAY BE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT
AND SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER. THE SALE,
TRANSFER OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS
4
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SUBJECT TO THE TERMS AND CONDITIONS OF A WARRANT EXCHANGE AGREEMENT
AND A PREFERRED STOCK PURCHASE AGREEMENT BY AND AMONG THE HOLDER OF
THIS WARRANT, CERTAIN INVESTORS IN THE CAPITAL STOCK OF THE
CORPORATION AND THE CORPORATION. COPIES OF SUCH AGREEMENTS MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION."
(d) JPMVC understands that PRT shall affix to each
certificate evidencing the PRT Shares to be issued upon exercise of the PRT
Warrant a legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON
THE CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER SUCH SECURITIES NOR THE SECURITIES ISSUABLE UPON THE
CONVERSION THEREOF NOR ANY INTEREST THEREIN MAY BE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT
AND SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER. THE SALE,
TRANSFER OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A WARRANT
EXCHANGE AGREEMENT AND A PREFERRED STOCK PURCHASE AGREEMENT BY AND
AMONG THE HOLDER OF THESE SHARES, CERTAIN INVESTORS IN THE CAPITAL
STOCK OF THE CORPORATION AND THE CORPORATION. COPIES OF SUCH
AGREEMENTS MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF
THE CORPORATION."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PRT
PRT represents and warrants to JPMVC as follows:
SECTION 3.1. Organization; Standing; Etc. PRT is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all necessary power and authority to
carry on its
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business as it has been and is currently conducted and as it is proposed to be
conducted. PRT is duly qualified to do business in good standing in each
jurisdiction in which the character of the properties owned, leased or
operated by it or the nature of the activities conducted by it makes or shall
make such qualification necessary. The copies of PRT's Articles of
Incorporation and By-laws heretofore provided to JPMVC are true, correct and
complete.
SECTION 3.2. Authorization; Noncontravention. PRT has all
necessary power and authority to enter into this Exchange Agreement and the
PRT Warrant, and to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. Other than as
required by Section 4.13 hereof, the execution and delivery of this Exchange
Agreement and the PRT Warrant by PRT, the performance by PRT of its
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
actions on the part of PRT and neither the execution and delivery of this
Exchange Agreement and the PRT Warrant nor the consummation of the
transactions contemplated hereby or thereby will (i) violate any provision of
the Articles of Incorporation or By-laws of PRT, (ii) conflict with or result
in any breach of or constitute a default (or an event which with notice or
lapse of time or both would constitute a default) under any note, bond,
mortgage, indenture, permit, license, agreement, instrument or obligation to
which PRT is a party or by which it or its properties or assets may be bound
or affected, (iii) result in the creation of any lien, claim or encumbrance on
any assets of PRT, (iv) conflict with or violate any law, rule, regulation,
ordinance, order, writ, injunction, judgment, decree or any other requirement
of any governmental body (or agency thereof) or court (collectively, "Laws")
applicable to PRT or by which its property or assets may be bound, (v) require
any action by or in respect of, or any filing with, any governmental body,
agency or official or (vi) result in any anti-dilution adjustment to any of
PRT's securities.
SECTION 3.3. Binding Effect. This Exchange Agreement and the
PRT Warrant have been duly executed by PRT, and (assuming due execution and
delivery by JPMVC of this Exchange Agreement and the delivery of the PRT
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Barbados Warrant and the Additional PRT Barbados Warrant) constitute legal,
valid and binding obligations of PRT enforceable against PRT in accordance
with their terms.
SECTION 3.4. Capitalization; Capital Stock. The authorized
and outstanding capital stock of PRT is as set forth on Exhibit B hereto.
Except as set forth in Exhibit B, PRT does not have outstanding any capital
stock or securities convertible into or exchangeable for any shares of its
capital stock and, except for the Shareholders, no person has any right to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, any calls,
commitments or other claims of any character relating to, any capital stock or
any stock or securities convertible into or exchangeable for any capital stock
of PRT. Other than those granted to the Shareholders, PRT does not have any
obligations (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or other securities described above.
Upon issuance in accordance with the terms hereof, the PRT Warrant and, upon
exercise of the PRT Warrant pursuant to the terms thereof, the PRT Shares to
be issued pursuant thereto, will be duly authorized, validly issued and fully
paid and nonassessable, and when delivered to JPMVC, will be free and clear of
any lien or other right, encumbrance, charge or claim and will be issued in
compliance with all applicable Laws.
SECTION 3.5. Stockholders. Exhibit B hereto sets forth a
complete and accurate list of all persons and entities that own any securities
of PRT and their respective ownership interests in such securities.
SECTION 3.6. Subsidiaries. Except as set forth in Schedule
3.6 hereto, PRT does not presently own or control, directly or indirectly, any
interest in any other corporation, association or other business entity.
SECTION 3.7. Assets. PRT owns its property and assets free
and clear of all mortgages, liens, loans and encumbrances, except such
encumbrances and liens which arise in the ordinary course of business and do
not materially impair PRT's ownership or use of such property or assets. With
respect to the property and assets it leases, PRT is in compliance with such
leases and, to its knowledge, holds a valid leasehold interest free of any
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liens, claims or encumbrances. PRT has sufficient title and interest in its
assets necessary for the conduct of its business as presently conducted.
SECTION 3.8. Financial Statements; Absence of Undisclosed
Liabilities; Absence of Changes. PRT has delivered to JPMVC its financial
statements (balance sheet and statements of operations and retained earnings
and of cash flows) at December 31, 1996 and for the year then ended and its
draft unaudited financial statements at June 30, 1997 and for the six month
period then ended (collectively, the "Financial Statements"). The Financial
Statements are complete and correct in all material respects, are in
accordance with the books and records of PRT and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The Financial Statements
present fairly the financial position of PRT as of the dates indicated and the
results of operations and cash flows for the periods indicated. Other than the
Promissory Note, dated as of July 1, 1997, issued to Stephen Michaelson
pursuant to the Stock Purchase Agreement, dated as of July 1, 1997, by and
among Robert Marchetti, Stephen Michaelson and PRT ("CMR Agreement") and
except as set forth in the Financial Statements, PRT does not have any
liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise, and whether due or to become due, other than
liabilities incurred after June 30, 1997 in the ordinary course of business
consistent with past practice that individually and in the aggregate are not
material to the business, operations, assets, liabilities, properties,
condition (financial or otherwise) or prospects (collectively, "Condition") of
PRT. Since December 31, 1996, there has not been any material adverse change
in, or, to the knowledge of PRT, any event that with the passage of time could
reasonably be expected to result in a material adverse change in PRT's
Condition.
SECTION 3.9. Litigation; Compliance with Laws; Compliance
with Contracts. There currently is not any action, litigation, proceeding,
governmental investigation or claim (collectively, "Actions") pending or, to
the knowledge of PRT, threatened against PRT or any officer, director or key
employee of PRT, or affecting any of the properties or assets of PRT, which
individually or in the aggregate could reasonably be expected to have a
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material adverse effect on the Condition of PRT, nor, to the knowledge of PRT,
is there any basis for any such Action. PRT is not in violation in any
material respect of any applicable Law (including, without limitation, matters
relating to securities, loans, employment and improper payments), and no
notice has been received by PRT or any of its officers or directors alleging
any such violation. There is no existing violation or default by PRT or, to
the knowledge of PRT, by any other party to (nor to the knowledge of PRT does
any fact or event exist which with the lapse of time or the giving of notice
or both would constitute a default under or breach of) any contract,
agreement, instrument, license, permit or obligation to which PRT is a party
or by which PRT or any of its properties or assets is bound, which,
individually or in the aggregate, could have a material adverse effect on the
Condition of PRT.
SECTION 3.10. Transactions with Affiliates. Except as set
forth on Schedule 3.10 hereto, PRT has not, directly or indirectly, entered
into or engaged in any material transaction or agreement with any shareholder,
officer or director of PRT or with any Affiliate (defined below) or relative
of any such shareholder, officer or director. "Affiliate" shall mean any
person or entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
such person or entity.
SECTION 3.11. Disclosure; Representations Complete. PRT has
provided JPMVC with all the information which JPMVC has requested for deciding
whether to enter into this Exchange Agreement. Neither this Exchange Agreement
nor any other statements or certificates made or delivered in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading.
SECTION 3.12. Licenses and Permits. PRT possesses all
material permits, licenses and approvals ("Permits") necessary or used in
order to carry on its business and operations. PRT is in compliance in all
material respects with all Permits; there are no proceedings pending or, to
the knowledge of PRT, threatened, to revoke, suspend, cancel or modify any
Permit. PRT does not know of any reason why it will not be able promptly
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to obtain all Permits necessary in order to carry on, or used in, its business
and operations.
SECTION 3.13. Tax Returns. PRT has filed all material tax
returns and reports as required by law. These reports and returns are true and
correct in all material respects. PRT has paid all taxes and other assessments
shown to be due on those tax returns.
ARTICLE IV
COVENANTS
SECTION 4.1. Restrictions on Transfer.
(a) Restrictions on Transfers of Securities. JPMVC agrees
not to sell any of the Securities except in accordance with Sections 4.5, 4.9,
and 4.10 of the Preferred Stock Purchase Agreement, which Sections shall be
deemed incorporated herein by reference, mutatis mutandis, and, in the case of
Section 4.5(c) of the Preferred Stock Purchase Agreement, as amended by
Section 4.1(b), below.
(b) Amendment to Preferred Stock Purchase Agreement Section
4.5(c). For the purposes of this Exchange Agreement and the PRT Warrant,
Section 4.5(c) of the Preferred Stock Purchase Agreement shall be deemed to
include (after clause (iv) but immediately preceding the semicolon before the
proviso in such Section) the clause, "or (v) a transfer by JPMVC or any of its
assignees to any affiliate of JPMVC (which shall include, without limitation,
any limited partnership the general partner of which is an affiliate of
JPMVC)".
(c) Restrictions on Transfer by Regulation Y Investors.
Notwithstanding anything to the contrary in Sections 4.1(a) and (b) above, no
"Regulation Y Investor" (as defined below) may sell, assign, pledge, encumber
or otherwise transfer (x) any non-voting common stock of PRT (or, if created
and acquired by such Regulation Y Investor, non-voting Preferred Stock of PRT)
or (y) any portion of the PRT Warrant that, at the time of such transfer, is
exercisable by such Regulation Y Investor only for non-voting securities of
PRT (the securities referred to in (x) and (y) are sometimes referred to
herein as "Non-Voting Securities"), except (i) to PRT; (ii) to any
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stockholder or group of stockholders that, immediately prior to such sale or
other transfer, control a majority (a "Controlling Investor") of PRT's voting
common stock, par value $.001 per share ("Voting Common Shares"); (iii) to the
ultimate parent corporation (a "Parent") of such Regulation Y Investor or any
wholly-owned direct or indirect subsidiary of such Parent (a "Controlled
Subsidiary"); (iv) in connection with any merger, consolidation or
reorganization of PRT (a "Reorganization"); (v) pursuant to the provisions of
Section 4.5 of this Exchange Agreement; (vi) in a registered public offering
or an open market sale pursuant to Rule 144 under the Securities Act (or any
successor rule or regulation); (vii) in a private sale (otherwise than to PRT,
to a Controlling Investor, to a Parent or Controlled Subsidiary of such
Parent, in a Reorganization or pursuant to the provisions of Section 4.5),
provided that the Regulation Y Investor (A) shall have first offered to PRT
the right to purchase all (but not less than all) of such Non-Voting
Securities being sold pursuant to a written offer which shall have been open
to acceptance for a period of at least ten days, for cash at a price which did
not exceed the price obtained in the private sale and (B) shall not knowingly
sell or otherwise transfer to any single person or group of persons acting in
concert a number of Non-Voting Securities which, if converted into Voting
Common Shares, would represent more than 2% of the Voting Common Shares then
outstanding; or (viii) upon the advice of counsel to such Regulation Y
Investor that such sale or other transfer is permitted under the laws and
regulations applicable to such Regulation Y Investor. The foregoing
restriction will not apply at any time at which the Voting Common Shares held
by such Regulation Y Investor (treating Non-Voting Securities held by it as
having been converted into or exercised for Voting Common Shares) would in the
aggregate represent less than 5% of the outstanding Voting Common Shares. As
used in this Exchange Agreement, "Regulation Y Investor" means (i) JPMVC and
(ii) any transferee of JPMVC's Non-Voting Securities that is subject to the
provisions of Regulation Y of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 225) or any successor to such regulation ("Regulation
Y").
SECTION 4.2. Assistance in Sales. Anything in this Exchange
Agreement to the contrary notwithstanding, in the event that it becomes
unlawful for JPMVC to con-
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tinue to hold all or some portion of the PRT Shares held by it, or
restrictions are imposed on JPMVC by any law, rule, regulation or governmental
authority which, in the reasonable judgment of JPMVC, make it unduly
burdensome to continue to hold all or some portion of such PRT Shares, JPMVC
may sell or otherwise dispose of all or any portion of its PRT Shares, and PRT
shall use reasonable efforts to assist JPMVC in disposing of such interest in
a prompt and orderly manner and, at the request of JPMVC, shall provide (and
authorize JPMVC to provide) financial and other information concerning PRT to
any prospective purchaser of such interest.
SECTION 4.3. Restriction on Certain Repurchases. PRT shall
not directly or indirectly redeem, purchase or otherwise acquire any PRT
Shares or Voting Common Shares (i) if the effect of such action would be to
increase JPMVC's holdings of PRT Shares or Voting Common Shares to more than
24.9% of the then issued and outstanding PRT Shares and Voting Common Shares,
in the aggregate; and (ii) without first giving JPMVC an opportunity to
convert such of its Voting Common Shares or shares of Preferred Stock into
Non-Voting Securities, as it may wish, if the effect of such action would be
to increase the holdings of Voting Common Shares or shares of Preferred Stock
of JPMVC and its affiliates to more than 4.9% of the then issued and
outstanding Voting Common Shares or Preferred Stock of PRT, respectively.
SECTION 4.4. Preemptive Rights.
(a) PRT and the Shareholders covenant and agree that JPMVC
shall have the preemptive rights of an Investor granted pursuant to Section
3.18 of the Preferred Stock Purchase Agreement, and such Section 3.18 is
deemed incorporated by reference herein, mutatis mutandis.
(b) In the event that any new securities to be issued by PRT
are voting securities, a Regulation Y Investor shall have the right under this
Section 4.4 to purchase, in lieu of such voting securities, an identical
number of non-voting securities that have the same dividend, liquidation and
other economic rights as such voting securities and that are convertible, in
whole or in part, on a share-for-share basis, into such voting securities at
the option of such Regulation Y Investor in
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the same manner, and subject to the same restrictions, that Non-Voting
Securities are convertible into Voting Common Shares.
SECTION 4.5. Tag-Along and First Offer Rights.
(a) PRT and the Shareholders covenant and agree that JPMVC
shall have the co-sale and first offer rights of an Investor granted pursuant
to Sections 3.20 and 3.23 of the Preferred Stock Purchase Agreement, and such
Sections 3.20 and 3.23 are deemed to be incorporated by reference herein,
mutatis mutandis.
(b) If the consideration to be received on account of the
sale, transfer or other disposition pursuant to this Section 4.5 is in a form
other than cash, and the acquisition or ownership of such consideration by
JPMVC could, in the reasonable judgment of JPMVC, result in violation of
applicable law, rule or regulation, then the Selling Founder(s) (as defined in
the Preferred Stock Purchase Agreement) shall cause the prospective purchaser
to take such steps as JPMVC may reasonably request (including, by way of
example and not of limitation, to issue nonvoting stock convertible into
voting stock in lieu of consideration in the form of an equal number of shares
of voting stock and/or to enter into agreements limiting the disposition of
such consideration) in order to avoid such a violation of law, rule or
regulation.
(c) JPMVC shall not be required to make any representation
in connection with any such sale, transfer or other disposition (other than as
to title, due authorization and due execution relating solely to JPMVC);
provided, that if all Selling Founders shall be required to provide any
indemnification in any agreement relating to such sale, transfer or other
disposition, JPMVC shall be required to bear its proportionate share of any
such indemnification, provided that the liability of JPMVC shall be limited to
an amount equal to the net proceeds from such sale, transfer or other
disposition received by JPMVC.
SECTION 4.6. Information. PRT shall provide to JPMVC the
information and access provided to an Investor or a Qualifying Investor
pursuant to Sections 3.1, 3.3 and 3.7 of the Preferred Stock Purchase
Agreement.
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SECTION 4.7. Publicity. Except as may be required by law,
neither PRT nor any subsidiary of PRT shall use the name of, or make reference
to, JPMVC or any of its affiliates in any press release or in any other public
manner without JPMVC's prior written consent.
SECTION 4.8. Confidentiality. JPMVC covenants and agrees to,
and shall cause its employees and advisors to, keep confidential any
confidential information of, or regarding, PRT or PRT Barbados, any customer
of PRT or PRT Barbados,and not to disclose such confidential information to
any employee of JPMVC or its affiliates except in connection with the purposes
of this Exchange Agreement or JPMVC's investment in PRT.
SECTION 4.9. Indemnification. PRT agrees to indemnify JPMVC
and each officer, director, employee and affiliate of JPMVC (the "Indemnified
Parties") for, and hold each Indemnified Party harmless from and against any
and all damages, losses and other liabilities of any kind, including, without
limitation, judgments and costs of settlement, and any and all out-of-pocket
costs and expenses of any kind, including, without limitation, reasonable fees
and disbursements of counsel for such Indemnified Parties (all of which
expenses shall be periodically reimbursed as incurred), in each case, suffered
or incurred in connection with (A) any investigative, administrative or
judicial proceeding or claim brought or threatened relating to or arising out
of this Exchange Agreement, the PRT Warrant or the transactions contemplated
hereby and thereby or PRT's use of the proceeds received in connection with
the sale and exercise of the PRT Warrant, (B) any inaccuracy in any
representation or warranty of PRT made in this Exchange Agreement as of the
date of this Exchange Agreement, and (C) any breach by PRT of any covenant or
agreement made or incorporated by reference in this Exchange Agreement or the
PRT Warrant.
SECTION 4.10. Preferred Stock Purchase Agreement Amendment.
(a) PRT and the Shareholders covenant and agree that, for the purposes of any
section of the Preferred Stock Purchase Agreement, JPMVC shall be deemed to be
an "Investor" as such term is defined in the Preferred Stock Purchase
Agreement and all other terms in such sections shall have the meanings given
such terms in such sections, mutatis mutandis. PRT and the shareholders
covenant and agree that JPMVC shall have the rights,
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privileges and obligations of an Investor for all purposes of the Preferred
Stock Purchase Agreement; provided that JPMVC shall have no voting rights with
respect to the PRT Shares except to the extent set forth in the PRT Warrant.
For the purposes of the Preferred Stock Purchase Agreement, JPMVC shall be
deemed to hold the maximum number of PRT Shares for which the PRT Warrant may
be exercised from time to time.
(b) The Shareholders hereby covenant and agree to waive the
anti-dilution rights and preemptive rights to which they would be entitled as
a result of the transactions contemplated herein, and upon any exercise of the
PRT Warrant, pursuant to the terms of the Preferred Stock, the Warrants, dated
as of November 21, 1996, issued to Capital Research and Management Company on
behalf of SMALLCAP World Fund, Inc., or the Warrants, dated as of July 1,
1997, issued to Stephen Michaelson and Robert Marchetti.
(c) The Shareholders hereby covenant and agree that the
Securities shall be deemed to be "Registrable Securities" for the purposes of
the Preferred Stock Purchase Agreement.
SECTION 4.11. Preferred Stock Dividends. If JPMVC shall
exercise the PRT Warrant in whole or in part on or before June 30, 1998, JPMVC
hereby waives its right to receive the 4% cumulative dividends on any shares
of Preferred Stock received upon such exercise accruing on or before June 30,
1998; provided, that JPMVC shall receive any and all dividends accruing from
time to time on or after July 1, 1998 on any shares Preferred Stock which it
may hold upon any exercise of the PRT Warrant.
SECTION 4.12. Board of Directors. (a) Until the earlier of
(i) such time as JPMVC shall own (or have the right to acquire, directly or
indirectly) less than 3% of the outstanding PRT Shares, or (ii) the initial
public offering of PRT common stock, the Shareholders agree to vote for the
designee of JPMVC as a director of PRT; provided, that until such time as
JPMVC shall own (or have the right to acquire, directly or indirectly) less
than 3% of the outstanding PRT Shares, JPMVC shall have the right to designate
a representative to attend all meetings of the PRT Board of Directors as an
observer; provided, however, that (A) such designee is a manag-
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ing director or other officer of at least the vice president level of JPMVC or
its affiliates reasonably acceptable to PRT, and (B) the foregoing rights to
designate a director or observer may not be transferred by JPMVC to any
unrelated third party purchaser of the Securities or any portion thereof;
provided, further, that the director of JPMVC provided for herein shall not
constitute, or be considered as, one of the directors which the Shareholders
may have the right to designate from time to time pursuant to Section 2.2(e)
of the Preferred Stock Purchase Agreement.
(b) If JPMVC shall have the right to designate a
representative to attend all meetings of the PRT Board of Directors as an
observer pursuant to this Section 4.12, PRT shall give to JPMVC notice of each
meeting of the Board of Directors of PRT and of each committee thereof at the
same time and in the same manner as notice is given to the directors. The
designee of JPMVC shall be entitled to attend in person, as an observer, all
meetings held in person or to listen to telephone meetings of the Board of
Directors of PRT and of each committee thereof solely for the purpose of
allowing JPMVC to have current information with respect to the affairs of PRT.
PRT shall provide to JPMVC in connection with each meeting it is entitled to
attend, whether or not present at such meeting, copies of all notices, minutes
and consents, and all other materials or information, that it provides to the
directors of PRT with respect to such meeting, at the same time such materials
and information are given to the directors of PRT (except that materials and
information provided to directors of PRT at meetings at which a designee of
JPMVC is not present shall be provided to JPMVC promptly after the meeting).
If the Board of Directors or any committee thereof proposes to take any action
by written consent in lieu of a meeting, PRT shall give written notice thereof
to JPMVC prior to the effective date of such consent describing in reasonable
detail the nature and substance of such action.
(c) PRT and the Shareholders covenant and agree that Section
3.24 of the Preferred Stock Purchase Agreement shall be amended by deleting
said Section 3.24 and replacing it with the following:
"Section 3.24. Board Size. The Company hereby
covenants and agrees that the number of direc-
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tors which shall comprise the Company's Board
of Directors shall not exceed ten (10) directors."
SECTION 4.13. Authorization of PRT Shares. Upon the request
of JPMVC, PRT and the Shareholders agree to take all actions necessary to
authorize and issue any of the PRT Shares (including, without limitation, any
non-voting securities) necessary for the full exercise by JPMVC of the PRT
Warrant.
SECTION 4.14. PRT Stock Option Plan. For so long as any and
all directors designated by the Shareholders puruant to the terms of the
Preferred Stock Purchase Agreement waive their rights to receive any options
to purchase securities of PRT granted pursuant to the PRT 1996 Stock Incentive
Plan, as amended from time to time (the "Option Plan"), JPMVC, and any
director designee of JPMVC pursuant to Section 4.12 hereof, shall waive any
and all rights to receive any options to purchase securities of PRT granted
pursuant to the Option Plan.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Communications. All notices and other
communications provided for herein shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by facsimile transmission,
by telegram, by telex or by certified or registered mail, return receipt
requested, postage pre-paid, addressed in the manner set forth on the
signature pages of this Exchange Agreement.
SECTION 5.2. No Waivers; Amendments and Waivers. (a) No
failure or delay on the part of either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
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(b) Any term of this Exchange Agreement may be amended only
with the written consent of PRT and JPMVC. The observance of any term of this
Exchange Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively) only by a written instrument signed
by the party against whom enforcement of such waiver is sought.
SECTION 5.3. Assignment. JPMVC and each assignee thereof
may, without PRT's consent, assign its rights under this Exchange Agreement,
in whole or in part, in connection with a sale or transfer (i) to an affiliate
of JPMVC (which shall include, without limitation, any limited partnership the
general partner of which is an affiliate of JPMVC) or (ii) of at least forty
percent (40%) of the Securities, provided that the information and access
rights provided to JPMVC in Section 4.6 hereof shall not be assignable by
JPMVC in connection with a transfer pursuant to this clause (ii) without the
prior consent of PRT. The terms and conditions of this Exchange Agreement
shall inure to the benefit of and be binding upon the respective successors
and permitted assigns of the parties. Nothing contained in this Section 5.3
shall be construed to limit the restrictions on transfer provided in this
Exchange Agreement.
SECTION 5.4. No Third Party Beneficiaries. This Exchange
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto, their permitted assigns and any successor of PRT by amalgamation, and
nothing herein, express or implied, is intended to or shall confer upon any
other person or entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Exchange Agreement.
SECTION 5.5. Currency. Except where otherwise
expressly provided, all amounts in this Exchange Agreement are stated and
shall be paid in United States currency.
SECTION 5.6. Governing Law. This Exchange Agreement shall be
governed by and construed in accordance with the laws of New York as applied
to agreements among New York residents entered into and to be performed
entirely within New York.
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SECTION 5.7. Execution in Counterparts. This Exchange
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.
SECTION 5.8. Entire Agreement. This Exchange Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, relating to the subject matter hereof.
SECTION 5.9. Survival of Representations and Warranties. The
representations and warranties contained in this Exchange Agreement shall
survive the execution and delivery of this Exchange Agreement, the Closing,
and the delivery and exercise of the PRT Warrant, and shall in no way be
affected by any investigation made by or on behalf of any party.
SECTION 5.10. Severability. If one or more provisions of
this Exchange Agreement are held to be unenforceable under applicable law,
such provision(s) shall be excluded from this Exchange Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 5.11. Titles and Subtitles. The titles and subtitles
used in this Exchange Agreement are used for convenience only and are not to
be considered in construing or interpreting this Exchange Agreement.
SECTION 5.12. CONSENT TO JURISDICTION. ANY JUDICIAL
PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS EXCHANGE AGREEMENT, THE PRT WARRANT OR THE REGISTRATION
RIGHTS AGREEMENT MAY BE BROUGHT IN A COURT LOCATED IN THE COUNTY, CITY AND
STATE OF NEW YORK, AND PRT (I) UNCONDITIONALLY ACCEPTS THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY AND (II) IRREVOCABLY
WAIVES ANY OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Exchange Agreement to be duly executed by their respective authorized
signatories thereunto duly authorized as of the day and year first above
written.
PRT (BARBADOS) LTD.
By:
----------------------------
Name:
Title:
PRT GROUP INC.
By:
----------------------------
Name:
Title:
PRT Group Inc.
342 Madison Avenue
New York, New York 10173
Facsimile: (212) 922-0806
Attention: President
with a copy to:
Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Mark Kaplan
Acknowledged:
J.P. MORGAN VENTURES CORPORATION
By:
-------------------------------
Name:
Title:
J.P. Morgan Ventures Corporation
60 Wall Street
New York, NY 10260
Facsimile:
------------------------
Attention:
------------------------
<PAGE>
WITH RESPECT TO SECTIONS 1.3, 4.3, 4.4, 4.5, 4.10, 4.12 AND
4.13 HEREOF, the undersigned Shareholders of PRT hereby agree to be bound by
the provisions of said Sections to the extent applicable to the Shareholders
as set forth herein.
THE MELLINGER GROUP LLC
By:
----------------------------
Name:
Title:
THE TRAVELERS INSURANCE
COMPANY
By:
----------------------------
Name:
Title:
Address:
388 Greenwich Street
New York, NY 10013
TUDOR INVESTMENT CORPORATION, on
behalf of Raptor Global Fund L.P.,
Raptor Global Fund, Ltd., Tudor BVI
Futures, Ltd. and Tudor Arbitrage
Partners L.P.
By:
----------------------------
Name:
Title:
Address:
40 Rowes Wharf
2nd Floor
Boston, MA 02110
<PAGE>
CAPITAL RESEARCH AND MANAGEMENT COMPANY,
on behalf of SMALLCAP World Fund, Inc.
By:
----------------------------
Name:
Title:
Address:
333 South Hope Street
Los Angeles, CA 90071
CRAIG GOLDMAN
By:
----------------------------
Name:
Title:
Address:
591 Jackson Avenue
Washington Township, NJ 07675
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
----------------------------
Name:
Title:
Address:
80 Livingstone Avenue
Roseland, NJ 07068
<PAGE>
RHO MANAGEMENT CO, INC. on behalf of
Rho Management Trust I
By:
----------------------------
Name:
Title:
Address:
767 Fifth Avenue
43rd Floor
New York, NY 10153
JACQUELINE W. SHAPIRO
By:
----------------------------
Name:
Title:
Address:
550 Park Avenue,
Apt. 7-E
New York, NY 10021
ROBERT MARCHETTI
By:
----------------------------
Name:
Title:
Address:
STEPHEN MICHAELSON
By:
----------------------------
Name:
Title:
Address:
