<PAGE> 1
As filed with the Securities and Exchange Commission on November 8, 1996.
Registration No. 33-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ATC COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2050538
- ------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5950 BERKSHIRE LANE, SUITE 1650
DALLAS, TEXAS 75225
(214) 361-9870
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
---------------
Michael G. Santry
Chairman of the Board
5950 Berkshire Lane, Suite 1650
Dallas, Texas 75225
(214) 361-9870
(Name, address, and telephone number,
including area code, of agent for service)
---------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 875,000 $17.375(2) $15,203,125(2) $5,242.46
===========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as
amended, based upon the closing sales price per share of ATC
Communications Group, Inc. on November 4, 1996, as reported by the
Nasdaq National Market.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
ATC COMMUNICATIONS GROUP, INC.
875,000 SHARES
COMMON STOCK
---------------
This Prospectus relates to an offering of up to 875,000 shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
ATC Communications Group, Inc., a Delaware corporation (the "Company" or
"ATC"), acquired pursuant to (a) that certain Stock Option Agreement for the
option to purchase up to 225,000 shares of Common Stock dated December 21, 1994
granted by the Company to KERS & Company, a general partnership ("KERS"), and
(b) that certain Warrant for the purchase of Common Stock dated May 26, 1994
granted by the Company to Ladenburg Thalmann & Co., Inc. ("LTC") (KERS and LTC
are collectively referred to herein as the "Selling Stockholders").
The Common Stock being registered is being offered for the account of
the Selling Stockholders. See "Selling Stockholders." The Company will not
receive any proceeds from the sale of shares of Common Stock offered hereby.
The shares may be offered in transactions on the Nasdaq(TM) National Market, in
negotiated transactions, or through a combination of such methods of
distribution, at prices relating to the prevailing market prices or at
negotiated prices. See "Plan of Distribution."
The Common Stock is quoted on the Nasdaq National Market under the
symbol "ATCT." The Shares of Common Stock offered hereby have been approved
for listing on the Nasdaq National Market. On November 4, 1996 the last sale
price of the Common Stock, as reported on the Nasdaq National Market, was
$17.375 per share.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE
---------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such other
information and representations must not be relied upon as having been
authorized by the Company or the Selling Stockholders. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of any time subsequent to its date. This Prospectus does not
constitute an offer to sell, or a solicitation of any offer to by, any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell, or a solicitation of any offer
to buy, such securities in any circumstances in which such offer or
solicitation is unlawful.
---------------
The date of this Prospectus is November 8, 1996.
-1-
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, information statements
and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements, information statements, and other
information filed by the Company with the Commission pursuant to the
requirements of the Exchange Act may be inspected and copied at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004 and at
the following regional offices of the Commission: New York Regional Office,
Seven World Trade Center, Suite 1300, New York, New York 10048; and Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material may be obtained from
the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company is a publicly held
corporation and its Common Stock is traded on the Nasdaq National Market under
the symbol "ATCT." Reports, proxy statements, information statements and other
information can also be inspected at the offices of the Nasdaq National Market,
1735 K Street, N.W., Washington, D.C. 20549. The Commission maintains a Web
site that contains reports, proxy statements, information statements and other
information regarding registrants, including the Company. The Commission's Web
site address is http://www.sec.gov.
The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as it
may determine to furnish or as may be required by law.
The Company has filed with the Commission a Registration Statement on
Form S-3 (referred to herein, together with all exhibits, as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the shares of Common Stock offered hereby. This
Prospectus does not contain all information set forth in the Registration
Statement. Certain parts of the Registration Statement have been omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement which can be
inspected at the public reference rooms at the offices of the Commission.
-2-
<PAGE> 4
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, including any beneficial owner, upon the written
or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). Requests should be directed to:
ATC Communications Group, Inc.
5950 Berkshire Lane, Suite 1650
Dallas, Texas 75225
(214) 361-9870
Attn: Jerry Sims
Secretary and Controller
The Company's (i) Annual Report on Form 10-K as amended by the Company
for the fiscal year ended June 30, 1996, (ii) all reports filed pursuant to
Section 13(a) or 15(d) of the Exchange Act since the Form 10- K, and (iii) a
description of the Common Stock contained in the Company's registration
statement on Form 8-A, dated November 1985, including any amendment or reports
filed for the purpose of updating such description, are hereby incorporated by
reference into this Prospectus.
All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering relating to
this Prospectus will be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein will be deemed to be modified, replaced, or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded will be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
-3-
<PAGE> 5
THE COMPANY
ATC Communications Group, Inc. is a provider of outsourced
telecommunications-based marketing, customer service and call center management
services in the United States. Through its operating subsidiary, Advanced
Telemarketing Corporation ("Advanced"), the Company designs, manages and
conducts large-scale, complex telecommunications-based, inbound and outbound,
marketing and customer services programs on an outsourced basis to a broad
range of companies and organizations in a variety of industries.
The Company offers clients call processing services featuring "live"
operators to interact with clients' customers and prospects. The Company also
manages call center facilities for clients under multi-year contracts that
usually require the development of proprietary software systems. The Company
does not engage in any form of outbound calling that uses computerized voice
presentations or involves soliciting money, nor is it engaged in the "900"
number business.
The Company is a Delaware corporation formed in 1985. The Company's
principle executive offices are located at 5950 Berkshire Lane, Suite 1650,
Dallas, Texas 75225, and its telephone number is (214) 361-9870.
RISK FACTORS
A discussion of "Risk Factors" relating to the Company is located in the
Company's 1996 Annual Report on Form 10-K, which is incorporated by reference
in this Prospectus, under Item 7. Management Discussion and Analysis of
Financial Condition and Results of Operations, Outlook and Uncertainties.
SELLING STOCKHOLDERS
The Selling Stockholders have informed the Company that they reasonably
expect to sell the number of shares of Common Stock set forth in the following
table within eighteen months after the date of this prospectus. The table
below sets forth information with respect to the beneficial ownership of the
Company's Common Stock by each Selling Stockholder immediately prior to this
offering and as adjusted to reflect the sale of shares of Common Stock pursuant
to the offering. All information with respect to the beneficial ownership has
been furnished by the respective Selling Stockholder:
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering(1)
---------------------------------------- -------------------------
Number of Percent of Shares to Number of Percent of
Name of Beneficial Owner Shares Class be Sold Shares Class
------------------------ ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
KERS & Company 225,000 1.38% 225,000 -0- -0-
Ladenburg Thalmann & Co., 650,000 3.88% 650,000 -0- -0-
Inc.
</TABLE>
- ---------------
(1) Assumes all the shares of Common Stock that may be offered are sold.
-4-
<PAGE> 6
PLAN OF DISTRIBUTION
The sale of the Common Stock offered hereby may be effected from time to
time directly, or by one or more broker-dealers or agents, in one or more
transactions (which may involve crosses and block transactions) on the Nasdaq
National Market, in negotiated transactions, or through a combination of such
methods of distribution, at prices related to prevailing market prices or at
negotiated prices.
In the event one or more broker-dealers or agents agree to sell the
Common Stock, they may do so by purchasing the Common Stock as principals or by
selling the Common Stock as agent for the Selling Stockholders. Any such
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the Selling Stockholders or the purchasers of the shares of
Common Stock for which such broker-dealer may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer may
be in excess of customary compensation).
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Common Stock may not simultaneously
engage in market-making activities with respect to the Company's Common Stock
for a period of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rule
10b-6.
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states, the Common Stock may not be
sold unless the Common Stock has been registered or qualified for sale in such
state or an exemption from registration or qualification is available and is
complied with.
USE OF PROCEEDS
The Company will not receive any proceeds from the offering.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Hughes & Luce, L.L.P., Dallas, Texas.
-5-
<PAGE> 7
EXPERTS
The financial statements and financial statement schedule incorporated
in this Prospectus by reference to the Annual Report on Form 10-K for the year
ended June 30, 1996, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
INDEMNIFICATION
Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify directors, officers and controlling persons of the corporation
who are parties to or are threatened to be made parties to actions, suits or
proceedings, whether civil, criminal, administrative or investigative, by
reason of such status. The Company's Certificate of Incorporation provides
that the Company shall indemnify directors, officers and employees to the full
extent permitted by Section 145, and the Company's bylaws similarly provide for
such indemnification. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant under Delaware law, the Company's Certificate of
Incorporation or bylaws, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
-6-
<PAGE> 8
PART II
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Registration fee $5,242*
Accounting fees and expenses 1,500*
Legal fees and expenses 5,000*
Blue Sky fees and expenses (including counsel fees) 1,000*
Miscellaneous expenses 258*
--------
Total $13,000
</TABLE>
- ---------------
* Estimated
All of the above expenses will be paid by the Company.
Item 15. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation provides that the Company
shall indemnify any director, officer or employee, or former director, officer
or employee, of the Company, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement to the fullest extent permitted
by Section 145 of the General Delaware Corporation Law (the "GDCL"). GDCL
Section 145 provides, among other things, that the Company may 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 (other than an
action by or in the right of the Company) by reason of the fact that he is or
was a director, officer, agent or employee of the Company or who serves or
served at the Company's request as a director, officer, agent, employee,
partner or trustee of another corporation or of a partnership, joint venture,
trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding. The power to
indemnify applies (a) if such person is successful on the merits or otherwise
in defense of any action, suit or proceeding, or (b) if such person acted in
good faith and in a manner he reasonably believed to be in the best interest,
or not opposed to the best interest, of the Company or corporation and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The power to indemnify applies to actions
brought by or in the right of the corporation as well, but only to the extent
of defense expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred and not to any satisfaction of a
judgment or settlement of the claim itself, and with the further limitation
that in such actions no indemnification shall be made in the event of any
adjudication of negligence or misconduct in the performance of his duties to
the Company, unless the court believes that in light of all the circumstances
indemnification should apply.
II-1
<PAGE> 9
The Company's Bylaws further provide that a determination of the minimum
standard required for indemnification may be made by either (a) a majority of
the directors of the Company (whether or not a quorum) who were not parties to
the action, (b) independent legal counsel in a written opinion, or (c) the
Company's stockholders. The Company may advance expenses to the potential
indemnitee only if the Company's Board of Directors so authorizes and if the
potential indemnitee undertakes in writing to repay the expenses if it is
subsequently determined that he is not entitled to indemnification. The
indemnification provisions contained in the Company's Certificate of
Incorporation and Bylaws are not exclusive of any other rights to which a
person may be entitled by law, agreement, vote of stockholders or disinterested
directors or otherwise.
Item 16. Exhibits.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on page II-7 of this Registration Statement, which Index is
incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
the volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by
II-2
<PAGE> 10
the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on November 6, 1996.
ATC COMMUNICATIONS GROUP, INC.
By: /s/ Arthur Chavoya
------------------------------
Arthur Chavoya
President, Chief Executive
Officer and Director
By: /s/ Michael G. Santry
------------------------------
Michael G. Santry
Chairman of the Board
By: /s/ Jerry L. Sims, Jr.
------------------------------
Jerry L. Sims, Jr.
Chief Financial Officer,
Secretary and Director
II-4
<PAGE> 12
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Arthur Chavoya and Michael G. Santry his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him or her and in his or her name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Date
--------- ----
<S> <C>
/s/ Arthur Chavoya November 6, 1996
- ------------------------------
Arthur Chavoya
President, Chief Executive Officer and Director
/s/ Michael G. Santry November 6, 1996
- ------------------------------
Michael G. Santry
Chairman of the Board
/s/ Jerry L. Sims, Jr. November 6, 1996
- ------------------------------
Jerry L. Sims, Jr.
Chief Financial Officer, Secretary and Director
/s/ Patrick V. Stark November 6, 1996
- ------------------------------
Patrick V. Stark
Director
/s/ Thomas Bijou November 6, 1996
- ------------------------------
Thomas Bijou
Director
</TABLE>
II-5
<PAGE> 13
<TABLE>
<S> <C>
/s/ J. Michael Allred November 6, 1996
- ------------------------------
J. Michael Allred
Director
/s/ J. Frank Mermoud November 6, 1996
- ------------------------------
J. Frank Mermoud
Director
/s/ Darryl Pounds November 6, 1996
- ------------------------------
Darryl Pounds
Director
/s/ David Malcolm November 6, 1996
- ------------------------------
David Malcolm
Director
</TABLE>
II-6
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------ -----------------------
<S> <C>
4.1 Specimen of Share Certificate of Company's Common Stock.
(Incorporated by reference from Company's Annual Report on Form
10-K for the year ended June 30, 1994)
4.2 Form of Series B Preferred Stock, as amended. (Incorporated by
reference from the Company's Annual Report on Form 10-K for the
year ended June 30, 1994)
4.3 ATC Communications Group, Inc. Series C Preferred Stock certificate
issued to Codinvest Limited with attached designations.
(Incorporated by reference from the Company's Current Report on
Form 8-K dated June 16, 1994)
*5.1 Opinion of Hughes & Luce, L.L.P.
*23.1 Consent of Hughes & Luce, L.L.P. (included in Exhibit 5.1)
*23.2 Consent of Price Waterhouse LLP
*24.1 Power of Attorney (included in Part II of this Registration
Statement)
*99.1 Stock Option Agreement dated December 21, 1994 between the Company
and KERS & Company
*99.2 ATC Communications Group, Inc. Common Stock Purchase Warrant dated
May 26, 1994 granted to Ladenburg Thalmann & Co., Inc.
</TABLE>
- ---------------
*Filed Herewith.
<PAGE> 1
EXHIBIT 5.1
[HUGHES & LUCE LETTERHEAD]
November 8, 1996
ATC Communications Group, Inc.
5950 Berkshire Lane, Suite 1650
Dallas, Texas 75225
Ladies and Gentlemen:
We have acted as counsel to ATC Communications Group, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of 875,000 shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
acquired pursuant to (a) that certain Stock Option Agreement (the "Option
Agreement") for the option to purchase up to 225,000 shares of Common Stock
dated December 21, 1994 granted by the Company to KERS & Company, a general
partnership ("KERS"), and (b) that certain Warrant (the "Warrant") for the
purchase of up to 650,000 shares of Common Stock dated May 26, 1994 granted by
the Company to Ladenburg Thalmann & Co., Inc. ("LTC"), as described in the
Registration Statement of the Company on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission.
In rendering this opinion, we have examined and relied upon executed
originals, counterparts or copies of such documents, records and certificates
(including certificates of public officials and officers of the Company) as we
considered necessary or appropriate for enabling us to express the opinions set
forth herein. In all such examinations, we have assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity
to originals and completeness of all documents submitted to us as photostatic,
conformed, notarized or certified copies.
Based on the foregoing, we are of the opinion that such shares of Common
Stock have been duly authorized and, if and when issued and paid for in full
upon exercise of the Option Agreement by KERS and the Warrant by LTC, each in
accordance with their respective terms, will be validly issued, fully paid and
nonassessable.
<PAGE> 2
November 8, 1996
Page 2
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having passed on the validity
of such shares of Common Stock under the caption "Legal Matters" in the
prospectus that constitutes a part of the Registration Statement. In giving
this consent, we do not admit that we are included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
HUGHES & LUCE, L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
September 5, 1996 appearing on page F-2 of ATC Communications Group, Inc.'s
Annual Report on Form 10-K for the year ended June 30, 1996. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
Dallas, Texas
November 8, 1996
<PAGE> 1
EXHIBIT 99.1
NRP INC.
STOCK OPTION AGREEMENT
Effective Date of Grant Expiration Date
- ----------------------- ---------------
December 21, 1994 December 21,2004
TO: KERS & Company, a general partnership ("Optionee")
WHEREAS, NRP Inc. (the "Company") desires to grant to the Optionee a stock
option to purchase shares of the common stock, par value $.01 per share
(the "Common Stock"), of the Company;
WHEREAS, the Board of Directors of the Company (the "Board") has awarded
the stock option herein described (the "Option") to the Optionee; and
WHEREAS, the parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereby agree as follows:
1 . GRANT OF OPTION. Effective as of the date set forth above, the Company
hereby grants to the Optionee a nonqualified stock option to acquire up to a
total of 225,000 shares of the Common Stock (the "Option"), at an exercise
price per share of $1.00 (the "Option Price"), upon the terms and subject to
the conditions, limitations and restrictions set forth in this Agreement.
2. VESTING. The shares of Common Stock subject to the Option shall be
deemed vested in full as of the Effective Date of Grant.
3. EXERCISE. In order to exercise the Option with respect to any vested
shares of Common Stock hereunder, the Optionee shall provide written notice to
the Company at its principal executive office; provided, however, that the
Option shall not be exercisable with respect to less than 50,000 shares in any
single exercise. At the time of exercise, the Optionee shall pay to the
Company the Option Price per share set forth in Section 1 times the number of
vested shares as to which the Option is being exercised. The Optionee shall
make such payment by delivering (a) cash, (b) a certified or cashier's check,
(c) at the Board's option, previously owned shares of Common Stock having a
Fair Market Value (as hereinafter defined) on the date immediately preceding
the exercise date equal to the aggregate exercise price or (d) at the Board's
option, any other consideration that the Board determines is consistent with
applicable law. If the Option is exercised in full, the Optionee shall
surrender this Agreement to the Company for cancellation.
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If the Option is exercised in part, the Optionee shall surrender this Agreement
to the Company so that the Company may make appropriate notation hereon or
cancel this Agreement and issue a new agreement representing the unexercised
portion of the Option.
"Fair Market Value," as used in the preceding paragraph, shall mean the
closing sales price (or average of the quoted closing bid and asked prices if
there is no closing sale price reported) of the Common Stock on the date
specified as reported by NASDAQ or by the principal national stock exchange on
which the Common Stock is then listed. If there is no reported price
information for such date, the Fair Market Value will be determined by the
Board, in its sole discretion. In making such determination, the Board may,
but shall not be obligated to, commission and rely upon an independent
appraisal of the Common Stock.
The certificates for shares of Common Stock as to which this Option shall
have been so exercised shall be registered in the name of the Optionee and
shall be delivered to the Optionee at the address specified below the signature
of its trustee hereto. Such option exercise shall be valid only if accompanied
by payment or other arrangement satisfactory to the Company with respect to the
Company's obligations, if any, to withhold federal and state taxes with respect
to the exercise of the Option.
4. WHO MAY EXERCISE. The Option shall be exercisable only by Optionee.
5. EXPIRATION OF OPTION. The Option shall expire, and shall not be
exercisable with respect to any vested shares of Common Stock hereunder as to
which the Option has not been exercised, on the tenth anniversary of the
Effective Date of Grant, or the date set forth on the upper right hand corner on
page one of this Agreement.
6. SUSPENSION OF OPTION. The Company may suspend for a reasonable period
or periods the time during which this Option may be exercised if, in the
opinion of the Company, such suspension is required to enable the Company to
remain in compliance with regulatory requirements relating to the issuance of
shares of Common Stock subject to this Option. The Option is subject to the
requirement that, if at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of the shares of
Common Stock subject to the Option upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting or exercise of the Option or the purchase or issue of shares of Common
Stock under the Option, the Option may not be exercised in whole or in part
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.
The Company shall be under no obligation to effect or obtain any such listing,
registration, qualification, consent or approval if the Company shall
determine, in its discretion, that such action would not be in the best
interest of the Company. The Company shall not be liable for damages due to a
delay in the delivery or issuance of any stock certificates for any reason
whatsoever including, but not limited to, a delay caused by listing,
registration or qualification of the shares of Common Stock subject to the
Option upon any securities exchange or under any federal or state law or the
effecting or
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obtaining of any consent or approval of any governmental body with respect to
the granting or exercise of the Option or the purchase or issue of shares of
Common Stock under the Option.
7. ADMINISTRATION. The Option and this Agreement shall be
administered by the Company's Board of Directors. The Board shall have
complete authority to construe, interpret and administer the provisions of this
Agreement and to make all other determinations necessary or deemed advisable in
the administration of this Agreement. The determinations, interpretations and
constructions made by the Board shall be final and conclusive.
8. WITHHOLDING OF TAXES. Any provisions of this Agreement to the
contrary notwithstanding, the Company may make such provisions and take such
steps as it deems necessary or appropriate for the withholding of any taxes
that the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with any shares of Common Stock subject to this Option including,
but not limited to, withholding the issuance of all or any portion of the
shares of Common Stock subject to such Option until the Optionee reimburses the
Company for the amount it is required to withhold with respect to such taxes,
cancelling any portion of such issuance in an amount sufficient to reimburse
the Company for the amount it is required to withhold or taking any other
action reasonably required to satisfy the Company's withholding obligation.
9. DILUTION. The number of shares of Common Stock subject to the Option
and the Option price therefor set forth in Section 1 shall be equitably
adjusted with respect to any Dilutive Event, to prevent dilution or enlargement
of option rights. A "Dilutive Event" shall include any of the following events
that results in dilution to the shares of Common Stock acquired or acquirable
upon exercise of the Option: any increase or decrease in the shares of Common
Stock or any other capital stock of the Company or any change or exchange of
any such securities for a different number or kind of securities, any of which
results from one or more stock splits, reverse stock splits, stock dividends,
recapitalizations, reorganizations or other corporate actions with a similar
effect. A "Dilutive Event" shall not include, however, among other things, any
issuance of capital stock by the Company for fair market value or any issuance
or grant to any person or entity of any right to subscribe for or to purchase
any capital stock or securities convertible into any capital stock of the
Company for fair market value.
10. TRANSFER OF OPTION. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate the Option or the rights and
privileges pertaining to the Option.
11. RESTRICTIONS ON ISSUANCE AND TRANSFERABILITY OF SHARES.
(a) The Company shall not be obligated to sell or issue any shares
of Common Stock upon the exercise of this Option unless the sale and
issuance of such shares shall comply with all relevant provisions of
law and other legal requirements including, without limitation, any
applicable federal and state securities laws (or are exempt from such
registration requirements) and the requirements of NASDAQ or any
securities exchange upon which shares of Common Stock may then be
listed. As a condition to the exercise
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of the Option, the Company may require the Optionee to make such
representations and warranties, including, but not limited to, an
opinion of counsel, as may be necessary to assure the availability of
an exemption from the registration requirements of applicable federal
or state securities laws. The Company shall not be liable for
refusing to sell or issue any shares covered by the Option if the
Company cannot obtain authority from the appropriate regulatory bodies
deemed by the Company to be necessary to lawfully sell or issue such
shares.
(b) The shares of Common Stock issued upon the exercise of the
Option may not be transferred, except in accordance with applicable
federal and state securities laws. The Company shall have no
obligation to the Optionee to list, register or otherwise qualify the
shares of Common Stock covered by the Option for reoffer or resale by
the Optionee, except as may be required by the terms of that certain
Registration Rights Agreement dated of even date herewith by and
between the Company and the Optionee (the "Registration Rights
Agreement"). Until so registered, at the Company's option, a
certificate evidencing shares of Common Stock issued to the Optionee
may be legended as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY
NOT BE SOLD, ASSIGNED, TRANSFERRED OR PLEDGED EXCEPT IN COMPLIANCE
WITH THE REQUIREMENTS OF SUCH ACT AND THE APPLICABLE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION.
12. MISCELLANEOUS.
(a) The granting of the Option herein shall impose no obligation
upon the Optionee to exercise the Option or any part thereof.
(b) Neither the Optionee nor any person or entity claiming under
or through the Optionee shall be or shall have any of the rights or
privileges of a stockholder of the Company in respect of any of the
shares of Common Stock issuable upon the exercise of the Option herein
unless and until such person or entity has exercised the Option and
paid the purchase price for the subject shares of Common Stock and
certificates representing such shares shall have been issued and
delivered to the Optionee or such Optionee's agent.
(c) Any notice to be given to the Company under the terms of this
Agreement or any delivery of the Option herein to the Company shall be
addressed to the Company at its principal executive offices, and any
notice to be given to the Optionee shall be addressed to the Optionee
at the address set forth beneath the signature of its sole trustee
hereto, or at such other address for a party as such party may
hereafter designate in writing to the
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<PAGE> 5
other. Any such notice shall be deemed to have been duly given if
mailed, postage prepaid, addressed as aforesaid.
(d) The Option is not liable for or subject to, in whole or
in part, the debts, contracts, liabilities or torts of the
Optionee, nor shall it be subject to garnishment, attachment,
execution, levy or other legal or equitable process.
(e) The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Delaware and
the United States, as applicable, without reference to the conflict of
laws provisions thereof.
(f) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the
parties shall be relieved of all obligations arising under such
provision, but only to the extent that it is illegal, unenforceable or
void, it being the intent and agreement of the parties that this
Agreement shall be deemed amended by modifying such provision to the
extent necessary to make it legal and enforceable while preserving its
intent or, if that is not possible, by substituting therefor another
provision that is legal and enforceable and achieves the same
objectives.
(g) All section titles and captions in this Agreement are
for convenience only, shall not be deemed part of this Agreement,
and in no way shall define, limit, extend or describe the scope or
intent of any provisions of this Agreement.
(h) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be
necessary or appropriate to achieve the purposes of this Agreement.
(i) Except for the Registration Rights Agreement, this Agreement
constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
(j) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
(k) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the
parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
(l) At any time and from time to time the Board may
execute an instrument providing for modification, extension, or
renewal of the Option, provided that no such modification, extension or
renewal shall impair the Option in any respect without the consent of
the Optionee. Except as provided in the preceding sentence, no
supplement, modification or amendment of this Agreement or waiver of
any provision of this Agreement shall be
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binding unless executed in writing by all parties to this
Agreement. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision of this
Agreement (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
(m) In addition to all other rights or remedies available at
law or in equity, the Company shall be entitled to injunctive and
other equitable relief to prevent or enjoin any violation of the
provisions of this Agreement.
IN WITNESS WHEREOF, each party has caused its authorized representative to
execute and deliver this Agreement as of the Effective Date of Grant.
COMPANY:
NRP Inc.
By: /s/ MICHAEL G. SANTRY
------------------------------------
Name: Michael G. Santry
----------------------------------
Title: President
---------------------------------
OPTIONEE:
KERS & Company, a general partnership
By: /s/ DALE FAIR
------------------------------------
Name: Dale Fair
----------------------------------
Title: Trustee
---------------------------------
Address: 125 N. Market, Suite 1100
-------------------------------
Wichita, KS 67202
-------------------------------
6
<PAGE> 1
Exhibit 99.2
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
NO. 1 650,000 SHARES
FOR VALUE RECEIVED, NRP, Inc. (the "Company"), hereby certifies that Ladenburg,
Thalmann & Co. Inc., or a permitted assign thereof, is entitled to purchase
from the Company, at any time or from time to time commencing June 1, 1994 and
prior to 5:00 P.M., New York City time, on May 30, 1999, six hundred fifty
thousand (650,000) fully paid and nonassessable shares of the common stock, of
the Company for an aggregate purchase price of $1,056,250 (computed on the
basis of $1.625 per share). (Hereinafter, (i) said common stock, together with
any other equity securities which may be issued by the Company with respect
thereto or in substitution therefor, is referred to as the "Common Stock," (ii)
the shares of the Common Stock purchasable hereunder or under any other Warrant
(as hereinafter defined) are referred to as the "Warrant Shares," (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred
to as the "Aggregate Warrant Price," (iv) the price payable hereunder for each
of the Warrant Shares is referred to as the "Per Share Warrant Price," (v) this
Warrant, all identical warrants issued on the date hereof and all warrants
hereafter issued in exchange or substitution for this Warrant or such other
warrants are referred to as the "Warrants" and (vi) the holder of this Warrant
is referred to as the "Holder" and the holder of this Warrant and all other
Warrants are referred to as the "Holders"). The Aggregate Warrant Price is not
subject to adjustment. The Per Share Warrant Price is subject to adjustment as
hereinafter provided; in the event of any such adjustment, the number of
Warrant Shares shall be adjusted by dividing the Aggregate Warrant Price by the
Per Share Warrant Price in effect immediately after such adjustment.
1. Exercise of Warrant.
(a) Exercise for Cash
This Warrant may be exercised, in whole at any time or in part from
time to time, commencing June 1, 1994, and prior to 5:00 P.M., New
York City time, on May 30, 1999, by the Holder by the surrender of
this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together
with proper payment of the Aggregate Warrant Price, or the
proportionate part thereof if this Warrant is exercised in part.
Payment for Warrant Shares shall be made by certified or official bank
check payable to the order of the Company. If this Warrant is
exercised in part, this Warrant must be exercised for a number of
whole shares of the Common Stock, and the Holder is entitled to
receive a new Warrant Covering the Warrant Shares which have not been
exercised and setting forth the proportionate part of the Aggregate
Warrant Price applicable to such Warrant Shares. Upon such surrender
of this Warrant, the Company will (a) issue a certificate or
certificates in the name of the Holder for the largest number of whole
shares of the Common Stock to which the Holder shall be entitled and,
if this Warrant is exercised in whole, in lieu of any fractional share
of the Common Stock to which the Holder shall be entitled, pay to the
Holder cash in an amount equal to the fair value of such fractional
share (determined in such reasonable manner as the Board of Directors
of the Company shall determine), and (b) deliver the other securities
and properties receivable upon the exercise of this Warrant, or the
proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.
(b) Cashless Exercise
In lieu of exercising this Warrant in the manner set forth in
paragraph 1(a) above, the Warrant may be exercised by surrender of
the Warrant without payment of any other consideration, commission or
remuneration, by execution of the cashless exercise subscription form
(at the end hereof, duly executed). The number of shares to be issued
in exchange for the Warrant will be computed by subtracting the
Warrant Exercise Price from the closing bid price of the common stock
on the date of receipt of the cashless exercise subscription form,
multiplying that amount by the number of shares represented by the
Warrant, and dividing by the closing bid price as of the same date.
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<PAGE> 2
2. RESERVATION OF WARRANT SHARES; LISTING.
The Company agrees that, prior to the expiration of this
Warrant, the Company will at all times (a) have authorized and
in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the
Common Stock and other securities and properties as from time
to time shall be receivable upon the exercise of this Warrant,
free and clear of all restrictions on sale or transfer and
free and clear of all pre-emptive rights subject to the
requirements and restrictions of the Securities Act of 1933,
as amended and (b) use reasonable efforts to obtain listing or
to keep the shares of the Common Stock receivable upon the
exercise of this Warrant listed on the NASDAQ system upon
notice of issuance,
3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of this
Warrant, the Company shall issue or distribute to the holders
of shares of Common Stock evidences of its Indebtedness, any
other securities of the Company or any cash, property or other
assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in
shares of Common Stock, referred to in Subsection 3(b), and
also excluding cash dividends or cash distributions paid out
of net profits legally available therefor if the full amount
thereof, together with the value of other dividends and
distributions made substantially concurrently therewith or
pursuant to a plan which includes payment thereof, is
equivalent to not more than 5% of the Company's net worth)
(any such nonexcluded event being herein called a "Special
Dividend", the Per Share Warrant Price shall be adjusted by
multiplying the Per Share Warrant Price then in effect by a
fraction, the numerator of which shall be the then current
market price of the Common Stock (defined as the average for
the thirty consecutive business days immediately prior to the
record date of the daily closing price of the Common Stock as
reported by the NASDAQ system) less the fair market value (as
determined by the Company's Board of Directors) of the
evidences of Indebtedness, securities or property, or other
assets issued or distributed in such Special Dividend
applicable to one share of Common Stock and the denominator of
which shall be such then current market price per share of
Common Stock. An adjustment made pursuant to this Subsection
3(a) shall become effective immediately after the record date
of any such Special Dividend.
(b) In case the Company shall hereafter (i) pay a dividend or make
a distribution on its capital stock in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares or (iv) issue
by reclassification of its Common Stock any shares of capital
stock of the Company, the Per Share Warrant Price shall be
adjusted so that the Holder of any Warrant upon the exercise
hereof shall be entitled to receive the number of shares of
Common Stock or other capital stock of the Company which he
would have owned immediately prior thereto. An adjustment
made pursuant to this Subsection 3(b) shall become effective
immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made
pursuant to this Subsection 3(b), the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to
receive shares of two or more classes of capital stock or
shares of Common Stock and other Capital stock of the Company,
the Board of Directors (whose determination shall be
conclusive and shall be described in a written notice to the
Holder of any Warrant promptly after such adjustment) shall
determine the allocation of the adjusted Per Share Warrant
Price between or among shares of such classes or capital stock
or shares of Common Stock and other capital stock.
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(c) Except as provided in Subsection 3(e), in case the Company
shall hereafter issue or sell any shares of Common Stock for a
consideration per share less than the Per Share Warrant Price
on the date of such issuance or sale, the Per Share Warrant
Price shall be adjusted as of the date of such issuance or sale
so that the same shall equal the consideration received by the
Company upon such issuance or sale.
(d) Except as provided in Subsection 3(a) and 3(e), in case the
Company shall hereafter issue or sell any rights, options,
warrants or securities convertible into Common Stock entitling
the holders thereof to purchase Common Stock or to convert such
securities into Common Stock at a price per share (determined
by dividing (i) the total amount, if any, received or
receivable by the Company in consideration of the issuance or
sale of such rights, options, warrants or convertible
securities plus the total consideration, if any, payable to the
Company upon exercise or conversion thereof (the "Total
Consideration") by (ii) the number of additional shares of
common stock issuable upon exercise or conversion of such
securities) less than the then current Per Share Warrant Price
in effect on the date of such issuance or sale, the Per Share
Warrant Price shall be adjusted as of the date of such issuance
or sale so that the same shall equal the price determined by
dividing (i) the sum of (a) the number of shares of Common
Stock outstanding on the date of such issuance or sale
multiplied by the Per Share Warrant Price plus (b) the Total
Consideration by (ii) the number of shares of Common Stock
outstanding on the date of such issuance or sale plus the
maximum number of additional shares of Common Stock issuable
upon exercise or conversion of such securities.
(e) In case of any capital reorganization or reclassification, or
any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or
conveyance to another entity of the property of the Company as
an entirety or substantially as an entirety, or in the case of
any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of
a third corporation (including any exchange effected in
connection with a merger of a third corporation into the
Company), the Holder of this Warrant shall have the right
thereafter to convert such Warrant into the kind and amount of
securities, cash or other property which he would have owned or
have been entitled to receive immediately after such
reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been
converted immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance and in any such case, if
necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder of
this Warrant to the end that the provisions set forth in this
Section 3 shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any shares of
stock or other securities or be, in relation to any shares of
stock or other securities or property thereafter deliverable on
the conversion of this Warrant. The above provisions of this
subsection shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, statutory
exchanges, sales or conveyances. The issuer of any shares of
stock or other securities or property thereafter deliverable on
the conversion of this Warrant shall be responsible for all of
the agreements and obligations of the Company hereunder. Notice
of any such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and of said
provisions so proposed to be made, shall be mailed to the
Holders of the Warrants not less than 30 days prior to such
event. A sale of all or substantially all of the assets of the
Company for a consideration consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing
purposes.
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(f) No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of
at least $0.05 per share of Common Stock; provided, however,
that any adjustments which by reason of this Subsection 3(f)
are not required to be made shall be carried forward and taken
into account in any subsequent adjustment; provided further,
however, that adjustments shall be required and made in
accordance with the provisions of this Section 3 (other than
this Subsection 3(f)) not later than such time as may be
required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock
issuable upon exercise hereof. All calculations under this
Section 3 shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be. Anything in this
Section 3 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Per Share Warrant
Price, in addition to those required by this Section 3, as it
in its discretion shall deem to be advisable in order that any
stock dividend, subdivision of shares or distribution of rights
to purchase stock or securities convertible or exchangeable for
stock hereafter made by the Company to its shareholders shall
not be taxable.
(g) Whenever the Per Share Warrant Price is adjusted as provided in
this Section 3 and upon any modification of the rights of a
Holder of Warrants in accordance with this Section 3, the
Company shall promptly obtain, at its expense, a certificate of
a firm of independent public accountants of recognized standing
selected by the Board of Directors (who may be the regular
auditors of the Company) setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or
the effect of such modification, a brief statement of the facts
requiring such adjustment or modification and the manner of
computing the same and cause copies of such certificate to be
mailed to the Holders of the Warrants.
(h) If the Board of Directors of the Company shall declare any
dividend or other distribution with respect to the Common
Stock, other than a cash distribution out of earned surplus,
the Company shall mail notice thereof to the Holders of the
Warrants not less then 15 days prior to the record date fixed
for determining shareholders entitled to participate in such
dividend or other distribution.
(i) This Section 3 (Protection Against Dilution) shall and hereby
does exclude the following:
<TABLE>
<S> <C>
(1) Three Million (3,000,000) Common Share presently reserved for employee options under a
plan dated February 22, 1993 and named NRP Inc. 1992 Stock Option Plan.
(2) Approximately Four Million (4,000,000) Common Shares attaching to the Company's
Convertible Preferred Shares (Series C) which shall be issued in exchange for a
related party debt owed by the Company and
(3) 59,556 Common Shares issuable upon the conversion, if any, of the presently outstanding
Series B Convertible Preferred Shares.
</TABLE>
4. FULLY PAID STOCK; TAXES.
The Company agrees that the shares of the Common Stock represented by
each and every certificate for Warrant Shares delivered on the exercise
of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and nonassessable, and not subject to
pre-emptive rights, and the Company will take all such actions as may
be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the
then Per Share Warrant Price. The Company further covenants and agrees
that it will pay, when due and payable, any and all Federal and state
stamp, original issue or similar taxes which may be payable in respect
of the issue of any Warrant Share or certificate therefor.
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5. REGISTRATION UNDER SECURITIES ACT OF 1993.
(a) The Company agrees that if, at any time during the period
commencing on September 1, 1994 and ending on May 30, 1999,
the Holder and/or the Holders of any other Warrants
and/or Warrant Shares who or which shall hold not less than
50% of the Warrants and/or Warrant shares outstanding at such
time and not previously sold pursuant to this Section 5,
request that the Company file a registration statement under
the Securities Act of 1933 (the "Act") covering all or any of
the warrant Shares, the Company will (i) promptly notify the
holder and all other registered holders, if any, of other
Warrant and/or Warrant Shares that such registration statement
will be filed and that the Warrant Shares which are then held,
and/or which may be acquired upon the exercise of Warrants, by
the Holder and such holders will be included in such
registration statement at the Holder's and such holder's
request, (ii) cause such registration statement to cover all
Warrant Shares which it has been so requested to include, (iii)
use its best efforts to cause such registration statement to
become effective as soon as practicable and to remain
effective and current and (iv) take all other action necessary
under any Federal or state law or regulation of any
governmental authority to permit all Warrant Shares which it
has been so requested to include in such registration
statement to be sold or otherwise disposed of and will
maintain such compliance with each such Federal and state law
and regulation of any governmental authority for the period
necessary for the Holder and such holders to effect the
proposed sale or other disposition; provided, however, that
the demand registration rights granted hereby may only be
exercised after the Common Stock has traded above four dollars
($4) for a period of twenty days.
(b) The Company shall pay all expenses incurred in connection with
any registration or other action pursuant to the provisions of
this Section 5, including the attorney's fees and expenses of
the Holder(s) of the Warrant Shares covered by such
registration incurred in connection with such registration or
other action, other than underwriting discounts and applicable
transfer taxes relating to the Warrant Shares.
(c) The market price of Common Stock shall mean the price of a
share of Common Stock on the relevant date, determined on
the basis of the last reported sale price of the Common Stock
as reported on the NASDAQ National Market System ("NASDAQ")
or, if there is no such reported sale on the day in question,
on the basis of the average of the closing bid and asked
quotations as so reported, or, if the Common Stock is not
listed on NASDAQ, the last reported sale price of the Common
Stock on such other national securities exchange upon which the
Common Stock is listed, or, if the Common Stock is not listed
on any national securities exchange, on the basis of the
average of the closing bid and asked quotations on the day in
question in the over-the-counter market as reported by the
National Association of Securities Dealers' Automated
Quotations System, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or if not so reported, as
reported by a similar organization.
(d) The Company's obligation under Section 5 relating to state
registrations and continuing compliance under the Blue Sky
laws is limited to those states where the Company is presently
qualified (a list of which is attached hereto as Annex "A".)
Registration in any additional states requested by the Holder
or Holders under 5(a) above shall require agreement between
the Company and the Holder or Holders of not less than 50% of
the Warrants or Warrant shares outstanding on a state by state
basis.
-5-
<PAGE> 6
6. Limited Transferability.
This Warrant may not be sold, transferred, assigned or hypothecated by
the Holder until the first anniversary hereof except (a) to any
successor firm or corporation of Ladenburg, Thalmann & Co. Inc., (b) to
any of the officers, managing directors, any associates of Ladenburg,
Thalmann & Co. Inc. or of any such successor firm or (c) in the case of
an Individual, pursuant to such individual's last will and testament or
the laws of descent and distribution, and is so transferable only upon
the books of the Company which it shall cause to be maintained for the
purpose (so long as the Company is assured any such sale, transfer,
assignment or hypothecation does not violate applicable Securities
Laws). The Company may treat the registered Holder of this Warrant as
he or it appears on the Company's books at any time as the Holder for
all purposes. The Company shall permit any Holder of a Warrant or his
duly authorized attorney, upon written request during ordinary business
hours, to inspect and copy or make extracts from its books showing
the registered holders of Warrants. All warrants issued upon the
transfer or assignment of this Warrant will be dated the same date as
this Warrant, and all rights of the Holder thereof shall be identical
to those of the Holder.
7. Loss, etc., of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the
Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
8. Warrant Holder Not Shareholders.
Except as otherwise provided herein, this Warrant does not confer upon
the Holder any right to vote or to consent to or receive notice as a
shareholder of the Company, as such, in respect of any matters
whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof.
9. Communication.
No notice or other communication under this Warrant shall be effective
unless, but any notice or other communication shall be effective and
shall be deemed to have been given if, the same is in writing and is
mailed by first-class mail, postage prepaid, addressed to:
(a) the Company at Campbell Centre, Suite 795, 8150 North
Central Expressway, Dallas, Texas, 75206, or such other
address as the Company has designated in writing to the Holder,
or
(b) the Holder at 540 Madison Avenue, New York, New York 10022, or
such other address as the Holder has designated in writing to
the Company.
10. Headings.
The headings of this Warrant have been inserted as a matter of
convenience and shall not affect the construction hereof.
-6-
<PAGE> 7
11. Applicable Law.
This Warrant shall be governed by and construed in accordance with the
law of the State of New York without giving effect to the principles of
conflicts of law thereof.
IN WITNESS WHEREOF, NRP, Inc. has caused this Warrant to be signed by its
Chairman and its corporate seal to be hereunto affixed by its Secretary this 26
day of May, 1994.
NRP, Inc.
by /s/ MICHAEL SANTRY
-----------------------------------
Michael Santry
Chief Executive Officer
ATTEST:
/s/ JERRY L. SIMS
- --------------------------------
Secretary
[Corporate seal]
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