Exhibit E
---------
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
EACH OF THE PURCHASERS REFERRED TO HEREIN
AND
HEADWAY CORPORATE RESOURCES, INC.
Dated as of March 19, 1998
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 19, 1998, (the
"Agreement") by and among GarMark Partners, L.P. ("GarMark"), Xxxxx Global
Investments, Ltd. ("MGI"), Remington Investment Strategies, L.P. ("Remington",
and together with MGI "Xxxxx") and NationsBanc Xxxxxxxxxx Securities LLC
("NationsBanc," and together with GarMark and Xxxxx, the "Buyer") and Headway
Corporate Resources, Inc., a Delaware corporation (the "Company").
WHEREAS, the Buyer and the Company have entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement") dated as of the date
hereof pursuant to which each of GarMark, Xxxxx and NationsBanc have agreed to
purchase, subject to the terms and conditions contained therein, securities of
the Company, which securities are exchangeable or exercisable for or convertible
into shares of Common Stock of the Company; and
WHEREAS, it is a condition precedent to the purchase of such
securities that the Company provide for the registration of the Common Stock of
the Company issuable on the exchange, exercise or conversion of the purchased
securities.
NOW, THEREFORE, in consideration on the foregoing premises and for
other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION I.1. Definitions. The following terms shall have the meanings
ascribed to them below:
"Business Day" means any day other than a day on which banks are
authorized or required to be closed in the State of New York.
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" means the common stock, par value $.0001 per share, of
Headway Corporate Resources, Inc., as it may exist from time to time.
"Convertible Preferred Stock" means the Company's Series F Convertible
Preferred Stock, par value $.0001 per share.
"Demand Registration" means a Demand Registration as defined in
Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Holder" means any person who now holds or shall hereafter acquire and
hold Registrable Securities.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Piggy-Back Registration" means a Piggy-Back Registration as defined
in Section 2.2.
"Preferred Stock Event of Default" means a Preferred Stock Event of
Default as defined in the Series F Certificate of Designations.
"Prospectus" means the prospectus included in any Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the securities covered by such Registration
Statement, and all other amendments and supplements to the prospectus, including
post- effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such prospectus.
"Records" means the records of the Company as set forth in Section
3.1.
"Registrable Securities" means the shares of Common Stock issued or
issuable upon conversion of the Convertible Preferred Stock, until (i) a
Registration Statement covering such shares of Common Stock has been declared
effective by the Commission and such shares of Common Stock have been disposed
of pursuant to such effective Registration Statement, or (ii) such shares of
Common Stock are sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met, or (iii) such shares of Common Stock have been otherwise
transferred and the Company has delivered a new certificate or other evidence of
ownership for such Common Stock not bearing a restrictive legend and not subject
to any stop transfer or similar restrictive order and all of such Common Stock
may be resold by the person receiving such certificate without complying with
the registration requirements of the Securities Act.
"Registration Statement" means any registration
statement of the Company which covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"Required Holders" means (i) the Initial Holders (as defined in the
Securities Purchase Agreement) of at least (A) 70% of the Registrable Securities
or (B) two thirds of the Registrable Securities on and after the date upon which
Xxxxx owns less than 100% of the Registrable Securities acquired by it on the
date hereof, or (ii) in the event that each of the Initial Holders, other than
GarMark, shall own less than 50% of the Registrable Securities owned by such
Initial Holder on the date hereof, then such term shall mean the Holders of a
majority of the Registrable Securities.
"Securities Act" means the Securities Act of 1933 or any similar
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a Registration Statement under the Securities Act.
"Selling Holders Counsel" means the counsel selected to represent the
Selling Holders as set forth in Section 3.1
"Series F Certificate of Designations" means the Certificate of
Designations under which the terms, powers, designations, preferences, rights,
qualifications, restrictions and limitations of the Convertible Preferred Stock
were established.
"Target Effective Date" means the date a Registration Statement is
required to be declared effective by the Commission as set forth in Section 3.1.
"Target Effective Period" means the period a
Registration Statement is required to be effective as set forth in Section 2.1.
"Target Filing Date" means the date a Registration Statement is
required to be filed with the Commission as set forth in Section 3.1.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
ARTICLE II.
REGISTRATION RIGHTS
SECTION II.1. Demand Registration.
(a) Request for Registration. At any time commencing on the 8 month
anniversary of the date hereof and from time to time thereafter any Holder or
Holders may make written requests (individually, a "Request") on the Company for
the registration of the offer and sale of the Registrable Securities under the
Securities Act (such registration being hereinafter referred to as a "Demand
Registration"); provided, however, that if any Preferred Stock Event of Default
has occurred before the 8 month anniversary of the date hereof, the Holders
shall, at any time, be entitled to exercise Requests for Demand Registrations.
The Company shall not effect a Demand Registration unless the Request is made by
Holders who, alone or together with other Holders making the Request, hold in
the aggregate not less than 35% of the outstanding Registrable Securities;
provided, however, that for so long as Xxxxx shall own at least 50% of the
Registrable Securities acquired by it on the date hereof, Xxxxx shall have the
right to make a Request for one (1) such Demand Registration.
Subject to the penultimate sentence of Section 2.1(b), the Company
shall have no obligation to effect more than four Demand Registrations. Any
Request will specify the number of Registrable Securities proposed to be sold
and the intended method(s) of disposition thereof and shall also state the firm
intent of the Holder to offer Registrable Securities for sale. The Company shall
give written notice of such Request within 10 days after the receipt thereof to
all other Holders. Within 20 days after receipt of such notice by any such
Holder, such Holder may request in writing that all or any portion of its
Registrable Securities be included in such Registration Statement and the
Company shall include in the Registration Statement for such Demand Registration
the Registrable Securities of all Holders that requested to be so included. Each
such request by such other Holders shall specify the number of Registrable
Securities proposed to be sold and the intended method(s) of disposition thereof
and shall also state the firm intent of the Holder to offer Registrable
Securities for sale.
(b) Effective Registration. A registration will not be deemed to have
been effected as a Demand Registration unless the Registration Statement
relating thereto has been declared effective by the Commission and the Company
has complied in all material respects with its obligations under this Agreement
with respect thereto; provided that if, after the Registration Statement has
become effective, the offering and/or sale of Registrable Securities pursuant to
such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court or other governmental or
quasi-governmental agency prevents or otherwise limits the offer and/or sale of
the Registrable Securities pursuant to the Registration Statement, other than in
each case primarily as a result of acts or omissions of the Holder or any agent
thereof, such registration will be deemed not to have been effected. If (i) a
registration requested pursuant to this Section 2.1 is deemed not to have been
effected or (ii) the Registration Statement relating to a Demand Registration
requested pursuant to this Section 2.1 does not remain effective for a period of
at least 270 consecutive days beyond the effective date thereof or, with respect
to an underwritten offering of Registrable Securities, until 45 days after the
commencement of the distribution by the Holders of the Registrable Securities
included in such Registration Statement (such periods being referred to herein
as the "Target Effective Periods"), then the Company shall continue to be
obligated to effect such Registration pursuant to this Section 2.1. The Holders
shall be permitted to withdraw all or any part of the Registrable Securities
from a Registration Statement at any time prior to the effective date of such
Demand Registration Statement; provided that in the event of such withdrawal,
such Holders shall be responsible for the fees and expenses referred to in
Section 3.3(viii) hereof incurred by such Holders with respect to such Demand
Registration prior to such withdrawal.
(c) Selection of Underwriter. If the Required Holders participating in
a Demand Registration so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an underwritten
offering. The Holders making such Demand Registration shall select, subject to
the
approval of the Company, which approval will not be unreasonably withheld, one
or more nationally recognized firms of investment bankers to act as the lead
managing Underwriter or Underwriters in connection with such offering and shall
select any additional investment bankers and managers to be used in connection
with the offering.
SECTION II.2. Piggy-Back Registration. If at any time the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any of
its respective security holders (other than (x) a Registration Statement on Form
S-8 (or any substitute form that may be adopted by the Commission), (y) a
Registration Statement on Form S-4 (or any substitute form that may be adopted
by the Commission); provided that such Registration Statement on Form S-4 does
not include any securities other than the securities to be issued by the Company
in connection with a transaction that is referenced in clauses (1) through (3)
of the General Instructions A.1. of Form S-4 (as such General Instructions are
currently in effect), or (z) a Registration Statement pursuant to a Demand
Registration pursuant to Section 2.1), then the Company shall give written
notice of such proposed filing to the Holders as soon as practicable (but in no
event less than 30 days before the anticipated filing date), and such notice
shall offer such Holders the opportunity to register such number of Registrable
Securities as each such Holder may request (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method(s) of distribution thereof and shall also state the firm intent
of the Holder to offer Registrable Securities for sale) (a "Piggy-Back
Registration"). The Company shall use all reasonable efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Holder shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any Registration Statement pursuant to this Section 2.2 by giving
written notice to the Company of its request to withdraw, provided that in the
event of such withdrawal (other than pursuant to Section 2.3(c) hereof), such
Holder shall be responsible for the fees and expenses referred to in Section
3.3(viii) hereof incurred by such Holder prior to such withdrawal relating to
such Registration Statement. The Company may withdraw a Piggy-Back Registration
at any time prior to the time it becomes effective.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of Registrable Securities in connection therewith shall
relieve the Company of any other obligation under this Agreement (including,
without limitation, the Company's obligations under Sections 3.2 and 4.1).
SECTION II.3. Reduction of Offering.
(a) Demand Registration. The Company may include in a Demand
Registration pursuant to Section 2.1 securities of the same class as the
Registrable Securities for the account of the Company and any other Persons who
hold securities of the same class as the Registrable Securities on the same
terms and conditions as the Registrable Securities to be included therein;
provided, however, that (i) if the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.1 have informed the Company in
writing that it is their opinion that the total number of Registrable
Securities, and securities of the same class as the Registrable Securities which
Holders, the Company and any other Persons desiring to participate in such
registration intend to include in such offering is such as to materially and
adversely affect the success of such offering, then the number of shares to be
offered for the account of the Company and for the account of all such other
Persons (other than the Holders) participating in such registration shall be
reduced or limited pro rata in proportion to the respective number of shares
requested to be registered to the extent necessary to reduce the total number of
shares requested to be included in such offering to the number of shares, if
any, recommended by such managing Underwriter or Underwriters, and (ii) if the
offering is not underwritten, no other Person, including the Company, shall be
permitted to offer securities under any such Demand Registration unless the
Required Holders participating in the offering consent to the inclusion of such
shares therein.
(b) Piggy-Back Registration. (i) Notwithstanding anything contained
herein, if the managing Underwriter or Underwriters of any underwritten offering
described in Section 2.2 have informed, in writing, the Holders requesting
inclusion in such offering that it is their opinion that the total number of
shares which the Company, Holders and any other Persons holding securities of
the same class as the Registrable Securities desiring to participate in such
registration intend to include in such offering is such as to materially and
adversely affect the success of such offering, then, the Company will include in
such registration (x) first, the shares offered by the holders of securities who
demanded such registration ("Demand Holders"), if any, (y) then, if additional
shares may be included in such registration without materially and adversely
affecting the success of such offering, all the shares the Company offered for
its own account, if any, and (z) then, if additional shares may be included in
such registration without materially and adversely affecting the success of such
offering, the number of shares offered by the Holders and such other holders of
securities of the same class as the Registrable Securities whose piggy-back
registration rights may not be reduced without violating their contractual
rights (provided such contractual rights were in existence prior to the date of
this Agreement), on a pro rata basis in proportion to the relative number of
Registrable Securities of the holders (including the Holders) participating in
such registration.
(ii) If the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.2 notify the Holders requesting
inclusion in such offering that the kind of securities that the Holders, the
Company and any other Persons
desiring to participate in such registration intend to include in such offering
is such as to materially and adversely affect the success of such offering, (x)
the Registrable Securities to be included in such offering shall be reduced as
described in clause (i) above or (y) if such reduction would, in the judgment of
the managing Underwriter or Underwriters, be insufficient to substantially
eliminate the adverse effect that inclusion of the Registrable Securities
requested to be included would have on such offering, such Registrable
Securities will be excluded from such offering.
(c) If, as a result of the proration provisions of this Section 2.3,
any Holder shall not be entitled to include all Registrable Securities in a
Demand Registration or Piggy-Back Registration that such Holder has requested to
be included, such Holder may elect to withdraw his request to include
Registrable Securities in such registration; provided, however that if a Holder
withdraws his request pursuant to this Paragraph 2.3(c) such Holder shall not be
responsible for the fees and expenses referred to in Section 3.3(viii) hereof.
II.4. Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the
Required Holders, enter into any other agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or
prospective holder (a) to include such securities in any registration filed
under Section 2.2 or 2.3(b) hereof, unless under the terms of such agreement,
such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of its securities will not
reduce the amount of the Registrable Securities of the Holders which is included
or (b) to make a demand registration which could result in such registration
statement being declared effective prior to the earlier of the dates set forth
in subsection 3.1(a).
ARTICLE III.
REGISTRATION PROCEDURES
SECTION III.1. Filings; Information. Whenever the Company is required
to effect or cause the registration of the offer and sale of Registrable
Securities pursuant to Section 2.1 or 2.2 hereof, the Company will use its best
efforts to effect the registration of the offer and the sale of such Registrable
Securities in accordance with the intended method(s) of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company promptly will prepare and file with the Commission a
Registration Statement with respect to the offer and sale of such securities and
use its best efforts to cause such Registration Statement to become and remain
effective until the completion of the distribution contemplated thereby;
provided, however, the Company shall not be required to keep such Registration
Statement effective for more than 270 days (or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, but not prior to the expiration of the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder,
if applicable); provided, further, that with respect to a Demand Registration,
the Company shall file with the Commission a Registration Statement as soon as
is practicable after the date of the Request and in any event no later than 60
days after the date of the Request for the Demand Registration (the "Target
Filing Date") and shall cause such Registration Statement to be declared
effective as soon as is practicable after the date of filing and in any event no
later than 120 days after the date of such Request (the "Target Effective
Date"); provided, further however, that with respect to a Request for Demand
Registration made prior to the first anniversary of the date hereof, other than
with respect to a Request for Demand Registration made subsequent to a Preferred
Stock Event of Default, the Company shall not be obligated to cause such
Registration Statement to be declared effective prior to the first anniversary
of the date hereof.
(b) The Company promptly will prepare and file with the Commission
such amendments and post-effective amendments to the Registration Statement as
may be necessary to keep such Registration Statement effective for as long as
such registration is required to remain effective pursuant to the terms hereof;
cause the Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all Registrable Securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Selling Holders set forth in such
Registration Statement or supplement to the Prospectus.
(c) The Company, at least ten (10) Business Days prior to filing a
Registration Statement or at least five (5) Business Days prior to filing a
Prospectus or any amendment or supplement to such Registration Statement or
Prospectus, will furnish to (i) each Selling Holder, (ii) not more than one
counsel representing all Selling Holders ("Selling Holders Counsel"), to be
selected by a majority-in-interest of such Selling Holders, and (iii) each
Underwriter, if any, of the Registrable Securities covered by such Registration
Statement copies of such Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review and
approval by each of the foregoing within five (5) Business Days after delivery
(except that such review and approval of any Prospectus or any amendment or
supplement to such Registration Statement or Prospectus must be within three (3)
Business Days after delivery), and thereafter, furnish to such Selling Holders,
Selling Holders Counsel and Underwriters, if any, such number of conformed
copies of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto and documents incorporated by reference
therein), the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents or information as such Selling
Holders, Selling Holders Counsel or Underwriters may reasonably request in order
to facilitate the disposition of the Registrable Securities (it being understood
that the Company consents to the use of the Prospectus and any amendment or
supplement thereto by each Selling Holder and the Underwriters, if any, in
connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto).
(d) The Company promptly will notify each Selling Holder of (and in
any event within 24 hours of the receipt of) any stop order issued or threatened
by the Commission and take all reasonable actions required to prevent the entry
of such stop order or to remove it at the earliest possible moment if entered.
(e) On or prior to the date on which the Registration Statement is
declared effective, use its best efforts to register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such jurisdictions
as any Selling Holder, Selling Holders Counsel or Underwriter requests and do
any and all other acts and things which may be necessary or advisable to enable
such Selling Holder to consummate the disposition in such jurisdictions of such
Registrable Securities owned by such Selling Holder; use its best efforts to
keep each such registration or qualification (or exemption therefrom) effective
during the period which the Registration Statement is required to be kept
effective; and use its best efforts to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the applicable Registration Statement;
provided that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such
jurisdiction.
(f) The Company will notify each Selling Holder,
Selling Holders Counsel and any Underwriter promptly (and in any event within 24
hours) and (if requested by any such Person) confirm such notice in writing, (i)
when a Prospectus or any Prospectus supplement or post-effective amendment has
been filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information to be included in any Registration Statement or Prospectus or
otherwise, (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the issuance by any state
securities commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, and (v) of the happening of any event which makes
any statement made in a Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated by reference therein untrue
or which requires the making of any changes in such Registration Statement,
Prospectus or documents so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements in the Registration Statement and Prospectus
not misleading in light of the circumstances in which they were made; and, as
promptly as practicable thereafter, prepare and file with the Commission and
furnish a supplement or
amendment to such Prospectus so that, as thereafter deliverable to the buyers of
such Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) The Company will make generally available an
earnings statement 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 day of the Company's first fiscal quarter commencing after the
effective date of a Registration Statement, which earnings statement shall cover
said 12-month period, and which requirement will be deemed to be satisfied if
the Company timely files complete and accurate information on Forms 10-Q, 10-K
and 8-K under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and otherwise complies with Rule 158 under the Securities Act.
(h) If requested by the managing Underwriter or
Underwriters, Selling Holders Counsel, or any Selling Holder, the Company will,
unless otherwise advised by counsel, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
Underwriter or Underwriters requests, or Selling Holders Counsel requests, to be
included therein, including, without limitation, with respect to the Registrable
Securities being sold by such Selling Holder to such Underwriter or
Underwriters, the purchase price being paid therefor by such Underwriter or
Underwriters and with respect to any other terms of the underwritten offering of
the Registrable Securities to be sold in such offering, and promptly make all
required filings of such Prospectus supplement or post-effective amendment.
(i) The Company will enter into customary agreements reasonably
satisfactory to the Company (including, if applicable, an underwriting agreement
in customary form and which is reasonably satisfactory to the Company) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities (the Selling Holders, at their
option, may require that any or all of the representations, warranties and
covenants of the Company to or for the benefit of such Underwriters also be made
to and for the benefit of such Selling Holders).
(j) The Company will make available to each Selling Holder (and will
deliver to their counsel) and each Underwriter, if any, subject to restrictions
imposed by the United States federal government or any agency or instrumentality
thereof, copies of all correspondence between the Commission and the Company,
its counsel or auditors and will also make available for inspection at
reasonable times at the Company's offices by any Selling Holder of such
Registrable Securities, any Underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
professional retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all 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 and employees to supply all information reasonably requested
by any Inspectors in connection with such registration statement.
(k) In connection with an underwritten offering, the Company will
participate, to the extent reasonably requested by the managing Underwriter or
Underwriters for the offering or the Selling Holders, in reasonable and
customary efforts to sell the securities under the offering, including, without
limitation, participating in "road shows."
(l) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act, promptly will file all documents required
to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act.
(m) The Company, if requested by Selling Holders, shall cause its
outside legal counsel to deliver an opinion relating to the Registrable
Securities, in customary form to such Selling Holders and any Underwriter
therefor, cause its officers to execute and deliver all customary documents and
certificates requested by any Underwriters of the Registrable Securities, and
cause its independent public accountants to provide to such Selling Holders and
any Underwriters therefor one or more comfort letters in customary form.
The Company may require each Selling Holder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration including, without limitation, all such information as may be
requested by the Commission or the National Association of Securities Dealers,
Inc.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(f)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders covered by
such Registration Statement a Prospectus supplemented or amended to conform with
the requirements of Section 3.1(f) hereof.
SECTION III.2. Liquidated Damages. If the Registration Statement with
respect to a Demand Registration is not filed on
or before the Target Filing Date, the Company shall pay liquidated damages to
each Selling Holder in an amount equal to $.10 per 100 Registrable Securities
per week beginning on the Target Filing Date. If the Registration Statement with
respect to a Demand Registration is filed but has not become effective on or
before the Target Effective Date, the Company shall pay liquidated damages to
each Selling Holder in an amount equal to $.10 per 100 Registrable Securities
per week beginning on the Target Effective Date. The weekly liquidated damages
associated with a late filing or a late declaration of effectiveness shall
increase by an amount equal to $.05 per 100 Registrable Securities 90 days after
the Target Filing Date or the Target Effective Date, as the case may be, and
shall thereafter increase by an amount equal to $.05 per 100 Registrable
Securities at the end of each subsequent 90 day period for so long as the
Registration Statement with respect to a Demand Registration is not filed or
declared effective, as the case may be. If a stop order is imposed or if for any
other reason the effectiveness of the Registration Statement with respect to a
Demand Registration is suspended for a period in excess of 10 consecutive days
during the Target Effective Period, then the Company shall pay liquidated
damages to each Holder of Registrable Securities in an amount equal to $.10 per
100 Registrable Securities per week beginning on the day that is 10 consecutive
days after the imposition of such stop order or other suspension of
effectiveness. The weekly liquidated damages associated with a suspension of the
effectiveness of the Registration Statement with respect to a Demand
Registration shall increase by an amount equal to $.05 per 100 Registrable
Securities 90 days after the stop order was imposed or the Registration
Statement with respect to a Demand Registration was otherwise suspended, and
shall thereafter increase by an amount equal to $.05 per 100 Registrable
Securities at the end of each subsequent 90 day period for so long as the
effectiveness remains suspended. Liquidated damages shall be deemed to commence
accruing on the day in which the event triggering such liquidated damages occurs
(the "Trigger Date").
The Company shall pay the liquidated damages due with respect to the
Registrable Securities as additional amounts to the Selling Holders quarterly on
each dividend payment date (as provided in the Series F Certificate of
Designations), in Federal or other immediately available funds. Liquidated
damages not previously paid, if any, shall be payable on each such dividend
payment date, and the liquidated damages shall be paid to the record holders of
Registrable Securities (as of the record date with respect to each applicable
dividend payment date) entitled to receive such liquidated damages.
The liquidated damages to be paid to Selling Holders pursuant to this
Section 3.2 shall cease to accrue, (i) with respect to the liquidated damages
for failure to file on or prior to the Target Filing Date, on the day the
Registration Statement is filed, (ii) with respect to the liquidated damages for
failure to have the Registration Statement declared effective on or prior to the
Target Effective Date, on the day after the Registration Statement is declared
effective, or (iii) with respect to the liquidated damages for the suspension of
effectiveness, on the day after the reinstatement of effectiveness of the
Registration Statement.
SECTION III.3. Registration Expenses. The Company shall pay all
expenses incident to the Company's performance of or compliance with this
Agreement including, without limitation: (i) all registration and filing fees,
(ii) the fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing or quotation, as appropriate, of the Registrable Securities,
(vi) the fees and disbursements of counsel for the Company and the fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any special audit or cold comfort letters), (vii) the
fees and expenses of any special experts retained by the Company in connection
with such registration, and (viii) the fees and expenses of Selling Holders
Counsel. The Company shall have no obligation to pay any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities and
any of the expenses incurred by Selling Holders which are not payable by the
Company, such costs to be borne by the Selling Holder or Selling Holders.
ARTICLE IV.
INDEMNIFICATION AND CONTRIBUTION
SECTION IV.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each
Selling Holder, its partners, officers, directors, employees, advisors and
agents, and each Person, if any, who controls such Selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
together with the partners, officers, directors, employees and agents of such
controlling Person (collectively, the "Controlling Persons"), from and against
any loss, claim, damage, liability, attorneys' fees, cost or expense and costs
and expenses of investigating and defending any such claim (collectively, the
"Damages") and any action in respect thereof to which such Selling Holder, its
partners, officers, directors, employees, advisors and agents, and any such
Controlling Person may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Damages (or proceedings in respect thereof) arise
out of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus or any
preliminary Prospectus, or arise out of, or are 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 upon information furnished in writing to the Company by a
Selling Holder expressly for use therein, and shall reimburse each Selling
Holder, its partners, officers, directors, employees, advisors and agents, and
each such Controlling Person for any legal and other expenses reasonably
incurred by that Selling Holder, its partners, officers, directors, employees,
advisors and agents, or any such Controlling Person in investigating or
defending or preparing to
defend against any such Damages or proceedings; provided, however, that the
Company shall not be liable to any Selling Holder or other indemnitee to the
extent that any such Damages arise out of or are based upon an untrue statement
or omission made in any preliminary Prospectus if (i) such Selling Holder failed
to send or deliver a copy of the final Prospectus with or prior to the delivery
of written confirmation of the sale by such Selling Holder to the Person
asserting the claim from which such Damages arise in any case where such
delivery of the Prospectus (as amended or supplemented) is required by the
Securities Act, and (ii) the final Prospectus would have corrected such untrue
statement or such omission, where such failure to deliver the Prospectus was not
a result of non-compliance by the Company under Section 3.1(f) of this
Agreement. The Company also agrees to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such Underwriters on substantially the same basis as that of the
indemnification of the Selling Holders provided in this Section 4.1.
SECTION IV.2. Indemnification by Selling Holders. Each Selling Holder
agrees, severally but not jointly, to indemnify and hold harmless the Company,
its officers, directors, employees, advisors and agents and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, together with the partners, officers,
directors, employees, advisors and agents of such controlling Person, to the
same extent as the foregoing indemnity from the Company to such Selling Holder,
but only with reference to information related to such Selling Holder, or its
plan of distribution, furnished in writing by such Selling Holder expressly for
use in any Registration Statement or Prospectus, or any amendment or supplement
thereto, or any preliminary Prospectus; provided, however, that such Selling
Holder shall not be liable in any such case to the extent that prior to the
filing of any such Registration Statement or Prospectus or amendment or
supplement thereto, such Selling Holder has furnished in writing to the Company
information expressly for use in such Registration Statement or Prospectus or
any amendment or supplement thereto which corrected or made not misleading
information previously furnished to the Company. In no event shall the liability
of any Selling Holder be greater in amount than the dollar amount of the
proceeds received by such Selling Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. In case any action or
proceeding shall be brought against the Company or its officers, directors,
employees, advisors or agents or any such controlling Person or its officers,
directors, employees or agents, in respect of which indemnity may be sought
against such Selling Holder, such Selling Holder shall have the rights and
duties given to the Company, and the Company or its officers, directors,
employees or agents, or such controlling Person, or its officers, directors,
employees, advisors or agents, shall have the rights and duties given to such
Selling Holder, by the preceding paragraph.
SECTION IV.3. Conduct of Indemnification Proceedings. Promptly after
receipt by any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such indemnity may be
sought (an "Indemnifying Party"), notify the Indemnifying Party in writing of
the claim or the commencement of such action; provided that the failure to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2 except
to the extent of any actual prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its controlling Persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the opinion of counsel to such Indemnified Party, representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicts of interest between them, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all Indemnified
Parties. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such claim or proceeding. Whether or not
the defense of any claim or action is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, which consent will not be unreasonably withheld.
SECTION IV.4. Contribution. If the indemnification provided for in
this Article 4 is unavailable to the Indemnified Parties in respect of any
Damages referred to herein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Damages in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Selling Holders on the other from the offering of the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion
as is appropriate to reflect not only the relative benefits but also the
relative fault of the Company on the one hand and the Selling Holders on the
other in connection with the statements or omissions which resulted in such
Damages, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of each Selling Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 4.4 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no Selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities of such Selling Holder were offered to the public exceeds the amount
of any damages which such Selling Holder has otherwise paid 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) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. Each Selling Holder's
obligations to contribute pursuant to this Section 4.4 is several in the
proportion that the proceeds of the offering received by such Selling Holder
bears to the total proceeds of the offering received by all the Selling Holders
and not joint.
ARTICLE V.
MISCELLANEOUS
SECTION V.1. Participation in Underwritten Registrations. No Person
may participate in any underwritten registration hereunder unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
SECTION V.2. Rule 144. The Company agrees and will use its best
efforts to file any reports required to be filed by it under the Securities Act
and the Exchange Act (or, if the Company is not required to file such reports,
it will, upon the request of any Holder, make publicly available other
information
as long as necessary to permit sales under Rule 144 under the Securities Act)
and that it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
SECTION V.3. Amendment and Modification. Any provision of this
Agreement may be waived, provided that such waiver is set forth in a writing
executed by the party against whom the enforcement of such waiver is sought.
This Agreement may not be amended, modified or supplemented other than by a
written instrument signed by the Required Holders; provided, however, that
without the consent of all the Holders, no amendment or modification which
materially and adversely affects the ability of such Holders to have the offer
and sale of securities registered hereunder may be effected. No course of
dealing between or among any Persons having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any Person under or by reason of this Agreement.
SECTION V.4. Successors and Assigns; Third Party Beneficiaries; Entire
Agreement. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto, each subsequent Holder and their
respective successors and assigns and executors, administrators and heirs.
Holders are intended third party beneficiaries of this Agreement and this
Agreement may be enforced by such Holders. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
SECTION V.5. Headings. Subject headings are included for convenience
only and shall not affect the interpretation of any provisions of this
Agreement.
SECTION V.6. Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if personally served or sent by
telecopy, on the business day after notice is delivered to a courier or mailed
by express mail if sent by courier delivery service or express mail for next day
delivery and on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
If to the Company to:
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Headway Corporate Resources, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
If to a Holder, to the Holder at the most current address given by
such Holder to the Company in writing, and to:
X. Xxxxxxx Bewkes, III
GarMark Partners, L.P.
c/o GarMark Advisors, L.L.C.
1325 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
SECTION V.7. Governing Law; Forum; Process. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of New York
as applied to contracts made and to be performed entirely in the State of New
York without regard to principles of conflicts of law. Each of the parties
hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the State of New York or any federal court sitting
in the State of New York for purposes of any suit, action or other proceeding
arising out of this Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the parties hereto
agrees that service of any process, summons, notice or document by U.S.
registered mail at its address set forth herein shall be effective service of
process for any action, suit or proceeding brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, which is brought by or against it, in the courts of the State
of New York or any federal court sitting in the State of New York and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION V.8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single agreement.
SECTION V.9. Severability. In the event that any one or more of the
immaterial provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect any other
provision of this Agreement, but this Agreement shall be construed in a manner
which, as nearly as possible, reflects the original intent of the parties.
SECTION V.10. No Prejudice. The terms of this Agreement shall not be
construed in favor of or against any party on account of its participation in
the preparation hereof.
SECTION V.11. Words in Singular and Plural Form. Words used in the
singular form in this Agreement shall be deemed to import the plural, and vice
versa, as the sense may require.
SECTION V.12. Remedy for Breach. The Company hereby acknowledges that
in the event of any breach or threatened breach by the Company of any of the
provisions of this Agreement, the Holder would have no adequate remedy at law
and could suffer substantial and irreparable damage. Accordingly, the Company
hereby agrees that, in such event, the Holder shall be entitled, without the
necessity of proving damages or posting bond, and notwithstanding any election
by any Holder to claim damages, to obtain a temporary and/or permanent
injunction, without proving a breach therefor, to restrain any such breach or
threatened breach or to obtain specific performance of any such provisions, all
without prejudice to any and all other remedies which any Holder may have at law
or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
HEADWAY CORPORATE RESOURCES, INC.
By: /s/ Signature
GARMARK PARTNERS, L.P.
By: /s/ Signature
XXXXX GLOBAL INVESTMENTS, LTD.
By: /s/ Signature
REMINGTON INVESTMENT STRATEGIES,
L.P.
By: Xxxxx Capital Advisors LLC
By: /s/ Signature
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By: /s/ Signature
