REGISTRATION RIGHTS AGREEMENT dated as of April 26, 1996 (this "Agreement")
between:
(a) Staff Capital, L.P., a limited partnership organized under the laws of the
State of Delaware (the "Company"); and
(b) the other Persons identified on the signature page to this Agreement.
Certain capitalized terms used herein shall have the meanings given such terms
in Article I hereof. Capitalized terms not otherwise defined herein but defined
in the Partnership Agreement shall have the meanings given such terms in the
Partnership Agreement.
W I T N E S S E T H:
Whereas, simultaneously with the execution and delivery of this Agreement, the
parties hereto have executed and delivered a Securities Purchase
Agreement dated as of the date hereof (the "Securities Purchase
Agreement") and entered into a "Recapitalization" (as defined in the
Securities Purchase Agreement) of the Company;
Whereas, pursuant to the Securities Purchase Agreement or the Recapitalization,
the Holders have acquired Class A Preferred Limited Partnership
Interests which are convertible into Common Limited Partnership
Interests; and
Whereas, Banque Paribas (acting through its Grand Caymans Branch) and Pilgrim
America Prime Rate Trust have heretofore been entitled to certain
registration rights with respect to Securities held by them.
Now, therefore, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the respective meanings
specified in this Article I:
"Affiliate" shall mean as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person and, if such Person is an individual, shall mean also any member of the
immediate family (including parents, spouse children and grandchildren) of such
individual and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such member or trust. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of the management or policies (whether through the ownership of
securities or partnership or other ownership interests, by contract or
otherwise). Without limiting the generality of the foregoing as to the
Partnership, the term "Affiliate" when used with respect to the Partnership
shall not mean or include Paribas Principal and its Affiliates and shall not
include any Operating Partnership or any Subsidiary of the Partnership.
"Business Day" shall mean any day other than Saturday, Sunday or any other day
on which commercial banks are required by law or authorized to close in New York
City.
"Demand Registration" shall have the meaning given such term in Section 3.01(a).
"Holders" shall mean Persons who are the record holders of the Securities.
"Initial Public Offering" shall mean the initial sale of Common Limited
Partnership Interests or any other securities, interests or units substituted
therefor (including in connection with any incorporation of the Company, by
merger or otherwise) pursuant to an effective registration statement under the
Securities Act in an offering underwritten on a firm commitment basis by a
nationally or regionally recognized underwriter.
"Inspectors" shall have the meaning given such term in Section 3.04(g).
"Paribas Group" shall mean and include Paribas Principal, Banque Paribas and
their respective Affiliates.
"Paribas Principal" shall mean Paribas Principal, Inc.
"Partnership Agreement" shall mean the Amended and Restated Agreement of Limited
Partnership dated as of April 26, 1996 of the Company, as such agreement may be
amended and supplemented from time to time.
"Person" shall mean an individual, a corporation, a company, a voluntary
association, a partnership, a trust, an unincorporated organization or a
government or any agency, instrumentality or political subdivision thereof.
"'Piggy-Back Registration" shall have the meaning given such term in Section
3.02.
"Records" shall have the meaning given such term in Section 3.04(g).
"Registrable Securities" shall mean the Securities until: (i) a registration
statement covering such Securities is effective under the Securities Act; (ii)
such Securities may be 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 under which such Securities may be sold pursuant to
Rule 144(k); (iii) the Company has delivered a new certificate or other evidence
of ownership for such Securities not bearing any legend relating to restrictions
on transfer and such Interests may be resold without subsequent registration
under the Securities Act; or (iv) such Securities are no longer outstanding or
are held by the Company or any Affiliate of the Company.
"Registration Expenses" shall have the meaning given such term in Section 3.05.
"SEC" shall mean the U.S. Securities and Exchange Commission (or any successor
entity).
"Second Stage Investor" shall have the meaning given such term in Section
3.01(a)(1) hereof.
"Securities" shall mean the Common Limited Partnership Interests issuable upon
the conversion of Class A-1 Preferred Limited Partnership Interests and Class
A-3 Preferred Limited Partnership Interests. "Securities" shall include also the
Common Limited Partnership Interests held by Banque Paribas and Pilgrim America
Prime Rate Trust as to which, prior to the date of this Agreement, Banque
Paribas and Pilgrim America Prime Rate Trust were entitled to certain
registration rights pursuant to Section 4(b)(i) of the Repurchase Agreement
dated as of December 8, 1994 between Banque Paribas and the Company and pursuant
to Section 5 of the Warrant Agreement dated as of July 1, 1995 among Banque
Paribas, Pilgrim America Prime Rate Trust and the Company.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Purchase Agreement" shall have the meaning given such term in the
recitals to this Agreement.
"Selling Holder" shall mean a Holder which is selling Registrable Securities
pursuant to a registration statement under the Securities Act.
"Selling Holder Expenses" shall have the meaning given such term in Section
3.05. "Specified Holders" shall have the meaning given such term in Section
3.01(c) hereof.
"Specified Holders" shall have the meaning given such term in Section 3.01(c)
hereof.
ARTICLE 11
INCORPORATION OF THE COMPANY
2.01. Incorporation of the Company.
In the event that the Board of Directors of the General Partner of the Company
shall determine that it is desirable to incorporate the Company prior to
effecting an Initial Public Offering, the Securities shall be converted and
exchanged for, and the certificate of incorporation and by-laws of the
corporation shall provide for the issuance of, capital stock which has rights
and values substantially comparable to the rights and values to which the
various Securities are entitled under the Partnership Agreement; and this
Agreement shall be amended to incorporate such changes herein as shall be
necessary to give effect to such incorporation and to preserve in all material
respects the rights and benefits granted to Holders of Registrable Securities
under this Agreement. In the event of any dispute among Holders of Registrable
Securities and the Company as to the terms of any capital stock to be issued to
Holders of Registrable Securities in exchange for their Securities, or as to the
amendments to this Agreement, such dispute shall be referred to a nationally
recognized investment banking firm selected by the Company and reasonably
acceptable to the holders of a majority of the then outstanding Partnership
Interests, and such investment banking firm shall be requested to resolve such
dispute within 30 days. The determination by the investment banking firm shall
be final, conclusive and binding upon Holders of Registrable Securities and the
Company. The fees and expenses of the investment banking firm in connection with
any such dispute resolution shall be paid by the Company.
ARTICLE III
REGISTRATION RIGHTS
3.01. Initial Public Offering and Other Demand Registration Rights.
(a) Demand Registrations.
(1) At any time subsequent to an Initial Public Offering and prior to March
31, 2006, but subject to Sections 3.01(a)(2) and 3.04(b) hereof and
provided that the Class A Preferred Limited Partnership Interests are no
longer outstanding, the Paribas Group and any Person acquiring Class A
Preferred Limited Partnership Interests pursuant to Section 3A.4(b)(i)
of the Partnership Agreement (the "Second Stage Investor") may make
written requests to the Company for registration of Registrable
Securities under the Securities Act with the SEC for a public offering
of Registrable Securities (a "Demand Registration").
(2) The Paribas Group shall have the right to request two Demand
Registrations, and the Second Stage Investor shall have the right to
request two Demand Registrations, which shall be long-form registrations
unless the Company is then permitted to use short-form registrations and
the use thereof is acceptable to the underwriters of such Demand
Registration, of all or any part of their Registrable Securities and
Registrable Securities of their respective Affiliates (including Banque
Paribas) and employees; provided that the Paribas Group or the Second
Stage Investor (and their respectful Affiliates and employees)
requesting the Demand Registration has requested to be included in the
Demand Registration such Registrable Securities as represent an
aggregate corresponding Participation Percentage (assuming conversion of
the Class Preferred Limited Partnership Interests) of at least 2%. In
addition, provided that the Paribas Group and the Second Stage Investor
have requested all of the foregoing Demand Registrations provided that
the Company is then permitted to effect short-form registrations, the
Paribas Group and the Second Stage Investor may request additional
short-form Demand Registrations; provided that the Paribas Group and the
Second Stage Investor (and their respective Affiliates and employees)
requesting the short-form Demand Registration have requested to be
included in the short-form Demand Registration such Registrable
Securities as represent an aggregate corresponding Participation
Percentage (assuming conversion of the Class A Preferred Limited
Partnership Interests) of at least 2% in the case of the Paribas Group
and its Affiliates and employees or at least 2% in the case of the
Second Stage Investor and its Affiliates and employees. Notwithstanding
the other provisions of this Section 3.01(a), the Company shall not be
required to effect more than one long-form Demand Registration within
any 12-month period, and the Company may delay any Demand Registration
that, in the reasonable judgment of management of the Company after
consultation with the Company's investment banking advisers, would
interfere with or otherwise adversely affect any Public Offering which
the Company is then effecting or which the Company at the time is
planning to effect within 90 days following the receipt of any request
for a Demand Registration.
(3) Whenever the Company shall receive a request from the Paribas Group or
the Second Stage Investor for a Demand Registration, the Company will
promptly give written notice of such registration to all Holders and
shall as expeditiously as is reasonable, use its best efforts to effect
the registration under the Securities Act of the Registrable Securities
with respect to which the Company has received written requests for
inclusion therein within 15 Business Days after such notice is given.
(4) All requests made pursuant to this Section 3.01(a) will specify the
aggregate Common Limited Partnership Interests represented by the
Registrable Securities to be registered and will also specify the
intended methods of disposition thereof.
(b) Effective Registration.
A registration initiated as a Demand Registration shall not be deemed a
Demand Registration until such registration has become effective and
unless the Demand Registration has continued to be effective until the
earlier of the date on which the Registrable Securities included in such
registration have actually been sold or the 180th day (or the 90th day
if an underwritten registration) following the date on which the Demand
Registration is declared effective by the SEC.
(c) No Right of the Company or Other Person to Piggy-Back on Demand
Registration.
Except as permitted under this Registration Rights Agreement, neither
the Company nor any Person owning any of its securities (other than
Holders in respect of Registrable Securities) shall have the right to
include any of the Company's securities in a registration statement
initiated as a Demand Registration under this Section 3.01. The Company
covenants that it shall not grant any registration rights to any Person
which rights would, in the reasonable judgment of Holders who hold
Registrable Securities which represent an aggregate corresponding
Participation Percentage (assuming conversion of the Class A Preferred
Limited Partnership Interests) of at least 5% (the "Specified Holders"),
conflict or be inconsistent with the provisions of this Section 3.01 (c)
or which would otherwise adversely affect the rights of Holders under
this Agreement; however, the Company may grant to one or more holders of
Class A-2 Preferred Limited Partnership Interests, and to one or more
holders of Common Limited Partnership Interests, Piggy-Back Registration
rights provided that such rights are not more favorable to the
Piggy-Back Rights granted to the Holders under this Registration Rights
Agreement. If the Company shall at any time provide to any Person rights
with respect to the registration of securities of the Company under the
Securities Act which are, in the reasonable judgment of the Specified
Holders, on terms or conditions more favorable to such Person than the
terms and conditions provided in this Article III, the Company shall
provide (by way of amendment to this Agreement or otherwise) such more
favorable terms or conditions to Holders. In the event of a conflict or
inconsistency, the provisions of this Section 3.01 (c) shall prevail.
Without limiting the generality of the foregoing, simultaneously with
the execution and delivery of this Agreement, the registration rights to
which Banque Paribas and Pilgrim America Prime Rate Trust have been
entitled pursuant to Section 4(b)(i) of the Repurchase Agreement dated
as of December 8, 1994 between Banque Paribas and the Company and
pursuant to Section 5 of the Warrant Agreement dated as of July 1, 1995
among Banque Paribas, Pilgrim America Prime Rate Trust and the Company
have been terminated.
(d) Selection of Underwriters and Counsel, etc.
If Holders of more than 50% of the aggregate Registrable Securities
requested to be registered 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. If a
Demand Registration involves an underwritten offering, (i) the Company
shall have the right to select the investment banker or bankers and
manager or managers to administer the offering (provided that such
investment bankers and managers must be reasonably satisfactory to
Holders of a majority of the Registrable Securities to be included in
the Demand Registration); and (ii) Holders shall have the right to
select the counsel to represent Holders. The obligation of the Company
under this Section 3.01(d) hereof to engage an underwriter for any
Demand Registration shall be only to use its reasonable efforts to do
so.
3.02. Piggy-Back Registration.
If the Company proposes to register any of its securities (whether for its
account or for any Holder) under the Securities Act (other than by a
registration statement on Form S-8 or other form that does not include
substantially the same information as would be required in a form for the
general registration of securities or that would not be available for
registration of Registrable Securities) other than in an Initial Public Offering
(unless otherwise permitted by the Company), the Company shall, as expeditiously
as possible, give written notice to each of the Holders of the Company's
intention to effect such registration. If, within 30 days after receipt of such
notice, Holders submit a written request to the Company specifying the
Registrable Securities Holders propose to sell or otherwise dispose of (a
"Piggy-Back Registration"), and provided that the Class A Preferred Limited
Partnership Interests are no longer outstanding, the Company shall include the
Common Limited Partnership Interests represented by the Registrable Securities
specified in such request in such registration statement and the Company shall
use its best efforts to keep each such registration statement in effect and to
maintain compliance with each federal and state law and regulation for the
period necessary for Holders to effect the proposed sale or other disposition
(but in no event for a period of more than 180 days), Holders participating in
an underwritten offering pursuant to Section 3.01(d) or this Section 3.02 shall,
if required by the managing underwriters of such offering, enter into an
underwriting agreement in a form customary for underwritten offerings of the
same general type as such offering.
3.03. Reduction of Offering.
(a) Notwithstanding anything contained herein, if the managing underwriters of
an offering described in Section 3.01 or Section 3.02 hereof deliver a
written opinion to Holders whose Registrable Securities are requested to be
included in such offering that (i) the size of the offering that Holders,
the Company and any other Persons intend to make, or (ii) the kind or
combination of securities that Holders, the Company and any other Persons
intend to include in such offering are, in either case, such that the
success of the offering would be materially and adversely affected by
inclusion of all the Registrable Securities requested to be included, then:
(1) if the size of the offering is the basis of such underwriters opinion:
(A) in the case of a Demand Registration pursuant to the first
sentence of Section 3.01(a)(2) hereof, the aggregate Registrable
Securities proposed to be offered for the accounts of Holders
shall be determined as follows:
(i) if the Demand Registration is a Demand Registration of the
Paribas Group pursuant to the first sentence of Section 3.01
(a)(2) hereof, then the Paribas Group and its employees, and
any transferee of Registrable Securities of Paribas
Principal pursuant to Section 9.2(a)(i) of the Partnership
Agreement, shall be permitted to include in the offering all
Registrable Securities requested by the Paribas Group and
its employees;
(ii) if the Demand Registration is a Demand Registration of the
Second Stage Investor pursuant to the first sentence of
Section 3.01(a)(2) hereof, then the Second Stage Investor
and its Affiliates and employees shall be permitted to
include in the offering all Registrable Securities requested
by the Second Stage Investor and its Affiliates and
employees;
(iii)subject to the foregoing clauses (i) and (ii), all
Registrable Securities requested by Pilgrim America Prime
Rate Trust shall be permitted to be included in the Demand
Registration to the extent permitted by the underwriter; and
then all Registrable Securities requested by other Holders
to be included in the Demand Registration shall be reduced
pro rata (according to the aggregate Registrable Securities
proposed for registration) to the extent necessary to reduce
the total amount of Registrable Securities to be included in
such offering to the amount recommended by such managing
underwriters; and
(B) in the case of a Demand Registration pursuant to the second
sentence of Section 3.01(a)(2) hereof, the aggregate Common
Limited Partnership Interests represented by Registrable
Securities proposed to be offered for the accounts of Holders
shall be reduced pro rata (according to the aggregate Registrable
Securities proposed for registration) to the extent necessary to
reduce the total amount of Registrable Securities to be included
in such offering to the amount recommended by such managing
underwriters; and
(C) in the case of a Piggy-Back Registration which is otherwise
permitted under Section 3.02 hereof:
(i) if the Piggy-Back Registration is an Initial Public Offering
by the Company, then the Paribas Group, Pilgrim America
Prime Rate Trust and the Second Stage Investor and their
respective Affiliates and employees, and any transferee of
Registrable Securities of Paribas Principal pursuant to
Section 9.2(a)(i) of the Partnership Agreement, shall be
permitted to include in the offering all Registrable
Securities requested by them (reduced pro rata (according to
the aggregate Registrable Securities proposed for
registration) among the Paribas Group, Pilgrim America Prime
Rate Trust and the Second Stage Investor and their
respective Affiliates and employees, and any transferee of
Registrable Securities of Paribas Principal pursuant to
Section 9.2(a)(i) of the Partnership Agreement, to the
extent necessary to reduce the total amount of Registrable
Securities to be included in such offering to the amount
recommended by such managing underwriters); and
(ii) if the Piggy-Back Registration is not an Initial Public
Offering by the Company, or if an Initial Public Offering as
to all Holders other than the Paribas Group, Pilgrim America
Prime Rate Trust and Second Stage Investor and its
Affiliates and employees, and any transferee of Registrable
Securities of Paribas Principal pursuant to Section
9.2(a)(i) of the Partnership Agreement, after giving effect
to the foregoing clause (ii), the amount of Registrable
Securities to be offered for the accounts of Holders shall
be reduced pro rata (according to the aggregate Registrable
Securities proposed for registration) to the extent
necessary to reduce the total amount of securities to be
included in such offering to the amount recommended by such
managing underwriters; provided that in the case of any
Piggy-Back Registration if Registrable Securities are being
offered for the account of other Persons as well as the
Company, then with respect to the Registrable Securities
intended to be offered by Holders, the proportion by which
the aggregate in the amount of such class of securities
intended to be offered by Holders is reduced shall not
exceed the proportion by which the amount of such class of
securities intended to be offered by such other Persons is
reduced; and
(2) if the kind or combination of securities to be offered is the basis of
such underwriters opinion:
(A) the aggregate Common Limited Partnership Interests represented by
the Registrable Securities to be included in such offering shall
be reduced as described in clause (1) above; or
(B) if the actions described in clause (A) would, in the judgment of
the managing underwriter, 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.
3.04. Filings: Information.
Whenever any Registrable Securities are to be registered pursuant to this
Article III, the Company will use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection with
any such request:
(a) The Company will as expeditiously as possible prepare and file with the SEC
a registration statement on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of
distribution thereof, and use its best efforts to cause such filed
registration statement to become and remain effective for a period of not
less than 180 days or until all of such Registrable Securities have been
disposed of (if earlier); provided that if the Company shall furnish to
Holders making a request pursuant to Section 3.02 hereof a certificate
signed by either its chief executive officer or the General Partner stating
that in his or its good faith judgment it would be significantly
disadvantageous to the Company for such a registration statement to be
filed as expeditiously as possible, the Company shall have a period of not
more than 90 days within which to file such registration statement measured
from the date of receipt of the request in accordance with Section 3.02
hereof.
(b) The Company will, if requested, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to each Selling
Holder and each underwriter, if any, of the Registrable Securities covered
by such registration statement copies of such registration statement as
proposed to be filed, and thereafter furnish to each Selling Holder and
underwriter, if any, such number of 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 as such Selling Holder or underwriter
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder.
(c) After the filing of the registration statement, the Company will promptly
notify each Selling Holder of Registrable Securities covered by such
registration statement of any stop order issued or threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(d) The Company will use its best efforts to (i) register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as any Selling Holder reasonably (in
light of such Selling Holder's intended plan of distribution) requests and
(ii) cause such Registrable Securities to be registered with or approved by
such other governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company and do any and all
other acts and things that may be reasonably necessary or advisable to
enable such Selling Holder to consummate the disposition of the Registrable
Securities owned by such Selling Holder; 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
(d), (B) subject itself to taxation in any such jurisdiction or (C) consent
to general service of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder of Registrable
Securities, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
promptly make available to each Selling Holder any such supplement or
amendment.
(f) The Company will enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) The Company will make available for inspection 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 partnership documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any Inspectors in connection with such registration
statement. Records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Selling Holder of such Registrable Securities agrees
that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and
until such is made generally available to the public.
(h) The Company will furnish to each Selling Holder and to each underwriter, if
any, a signed counterpart, addressed to such Selling Holder or underwriter,
of (i) an opinion or opinions of counsel to the Company, and (ii) a comfort
letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as
the Selling Holders of more than 50% of the aggregate Registrable
Securities included in such offering or the managing underwriter therefor
reasonably requests.
(i) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to the
Holder and the other Partners, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within three
months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section II (a) of the
Securities Act.
(j) The Company will use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
The Company may require each Selling Holder of Registrable Securities 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.
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 3.04(e) 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 3.04(e) 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 Holders 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 3.04(a) hereof) by the
number of days during the period from and including the date of the giving of
notice pursuant to Section 3.04(e) hereof to the date when the Company shall
make available to the Selling Holders of Registrable Securities covered by such
registration statement a prospectus supplemented or amended to conform with the
requirements of Section 3.04(e) hereof.
3.05. Registration Expenses.
In connection with any registration statement required to be filed hereunder,
the Company shall pay the following registration expenses incurred in connection
with the registration hereunder (the "Registration Expenses"): (i) all
registration and filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) 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 of the Registrable Securities, (vi) reasonable fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 3.04(h) hereof), (vii) the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, and (viii) reasonable fees and expenses of one counsel (who shall
be reasonably acceptable to the Company) for the Selling Holders. The Company
shall have no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, or any out-of-pocket
expenses of the Selling Holders (or the agents who manage their accounts)
(collectively, the "Selling Holder Expenses"); provided that if the Company
shall reimburse the Selling Holder Expenses of any Other Person for whose
account securities are being sold in such Offering, then the Company shall be
obligated similarly to reimburse the Selling Holder Expenses of the Selling
Holders of Registrable Securities.
3.06. Indemnification and Contribution.
(a) In connection with each registration statement relating to the disposition
of Registrable Securities, the Company shall indemnify and hold harmless,
each Selling Holder disposing of Registrable Securities, each underwriter
of Registrable Securities, each partner, officer, director or employee of
such Selling Holder, or any such underwriter and each Person, if any, who
controls (within the meaning of either the Securities Act or the Exchange
Act) such Selling Holder or any such underwriter against all losses,
claims, damages or liabilities' joint or several, to which such Selling
Holder, such underwriter or any such Person may be subject arising out of
or based upon (A) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement or the prospectus
included therein (or any supplement or amendment thereto) or a preliminary
prospectus, or (B) 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, and the Company shall reimburse such
Selling Holder and each of such other Persons for any reasonable legal or
other expenses incurred in connection with the investigation or defense
thereof (any such reimbursement to be made as such expenses are incurred);
provided, however, that the Company shall not be liable in any such
instance to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission or alleged
untrue statement or omission made in any such registration statement,
preliminary prospectus, or prospectus (or amendment or supplement) in
reliance upon and in conformity with information relating to any Person
referred to above who would be indemnified by the Company pursuant to this
Section 3.06(a) furnished in writing to the Company by such Person
expressly for use therein.
(b) In connection with each registration relating to the disposition of
Registrable Securities, each Selling Holder shall indemnify the Company,
each director of the Company, each officer of the Company who signs the
registration statement and any Person who controls the Company (within the
meaning of either the Securities Act or the Exchange Act) to the same
extent as the indemnity from the Company provided in Section 3.06(a), but
only with respect to information relating to such Selling Holder furnished
in writing to the Company by such Selling Holder expressly for use in any
such registration statement, preliminary prospectus or prospectus (or
amendment or supplement).
(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any Person in respect of which indemnity may be sought
pursuant to subsections (a) or (b) of this Section 3.06, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified party, and
shall assume the payment of all reasonable fees and disbursements related
to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (x) the
indemnifying party and indemnified party shall have mutually agreed to the
retention of such counsel or (y) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to any local counsel) at any time for all
such indemnified parties, and that all such fees and expenses shall be
reimbursed promptly after invoice. In the case of any such separate firm
for the indemnified parties, such firm shall be designated in writing by
the indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the third sentence of this paragraph, the indemnifying party agrees that it
shall not unreasonably withhold its consent to any settlement of any
proceeding proposed by the indemnified party and shall be liable for any
such settlement if (i) such settlement is entered into more than 10
Business Days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any 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
proceeding.
(d) If the indemnification provided for in this Section 3.06 is unavailable to
the indemnified parties in respect of any losses, claims, damages or
liabilities referred to herein, then each such 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 losses, claims,
damages or liabilities as between the Company on the one hand and the
Selling Holders on the other, 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 losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Selling Holders on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Selling Holders in each case as set forth
in the table on the cover page of the prospectus. 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 3.06(d) 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 losses, claims, damages or liabilities 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 3.06(d), 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 by which such selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of ss. II(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 3.06(d) are several in proportion to
the proceeds of the offering received by such Selling Holder bears to the
total proceeds of the offering received by all of the Selling Holders and
not joint.
3.07. 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 Company and holders of more than 50%
of the aggregate Registrable Securities to be included in such registration, 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.
3.08. Holdback Agreements.
(a) To the extent not inconsistent with applicable law, each Holder agrees not
to effect any public sale or distribution of the issue being registered or
a similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant
to Rule 144 under the Securities Act during the 14 days prior to, and
during the 180-day period (or such shorter period as may be agreed to by
the Company) beginning on, the effective date of any registration statement
filed by the Company with respect to the sale of equity securities (other
than a filing pursuant to Form S-8) (except as part of such registration),
if and to the extent requested by the Company in the case of a
non-underwritten public offering or if and to the extent requested by the
managing underwriters in the case of an underwritten public offering.
(b) The Company and its Affiliates agree: (i) not to effect any public sale or
distribution of any securities similar to those being registered in
accordance with Section 3.01 or Section 3.02 hereof, or any securities
convertible into or exchangeable or exercisable for such securities, during
the 14 days prior to, and during the 90-day period beginning on, the
effective date of any registration statement (except as part of such
registration statement where holders of more than 50% of the aggregate
Registrable Securities to be included in such registration statement
consent) or the commencement of a public distribution of Registrable
Securities; and (ii) that any agreement entered into after the date of the
agreement pursuant to which the Company issues or agrees to issue any
privately placed securities shall contain a provision under which holders
of such securities agree not to effect any public sale or distribution of
any such securities during the periods described in (i) above, in each case
including a sale pursuant to Rule 144 under the Securities Act (except as
part of any such registration, if permitted); provided, however, that the
provisions of this paragraph (b) shall not prevent the conversion or
exchange of any securities pursuant to their terms into or for other
securities.
3.09. Third Party Rights.
Holders shall be considered third party beneficiaries of this Agreement and
shall be entitled to the rights granted hereunder.
3.10. No Other Registration Rights.
Except for the registration rights granted pursuant to this Agreement, so long
as the Class A Preferred Limited Partnership Interests shall be outstanding, the
Company shall not grant registration rights to, or effect any registration of
securities, of any other Person.
ARTICLE IV
MISCELLANEOUS
4.01. Entire Agreement.
This Agreement, together with the Securities Purchase Agreement and the
Partnership Agreement, contains the entire agreement among the parties to this
Agreement with respect to the transactions contemplated by this Agreement and,
except as expressly provided herein, supersedes all prior arrangements or
understandings with respect thereto (except for such agreements supplementing or
amending this Agreement which specifically make reference to this Section 4.01).
4.02. Descriptive Headings.
The descriptive headings of this Agreement are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement.
4.03. Notices.
All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered personally or sent by facsimile
transmission, nationally recognized over-night courier or registered or
certified mail, postage prepaid, addressed as follows:
(a) If the Company: with a copy to:
Staff Leasing, X.X. Xxxxxxx Price & Xxxxxx
600 301 Boulevard West 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: General Counsel Attn: Xxxxxx X. Xxxxxx
Fax No.: 000-000-0000 Fax No.: 000-000-0000
(b) If to Holders:
At the addresses provided from time to time to the Company by such
Holder.
Any such notices or communications shall be deemed to have been received: (i) if
delivered personally or sent by facsimile transmission (with transmission
confirmed in a writing) or nationally recognized overnight courier, on the date
of such delivery; or (ii) if sent by registered or certified mail, on the date
on which such mailing was received by the party to whom it was addressed. Any
party may by notice change the address to which notices or other communications
to it are to be delivered or mailed.
4.07. Governing Law.
(a) This Agreement shall be governed by and construed in accordance with the
Laws of the State of New York (other than the choice of law principles
thereof), except that the rights and obligations of the parties under the
Partnership Agreement shall be governed by the Laws of the State of
Delaware.
(b) Any action, suit or other proceeding initiated by any party hereto against
the others under or in connection with this Agreement may be brought in any
Federal or state court in the State of New York, as the party bringing such
action, suit or proceeding shall elect, having jurisdiction over the
subject matter thereof. The parties hereto hereby submit themselves to the
jurisdiction of any such court for the purpose of any such action and agree
that service of process on them in any such action, suit or proceeding may
be effected by the means by which notices are to be given to it under this
Agreement.
4.08. Assignability.
This Agreement shall not be assignable otherwise than by operation of law by
either party without the prior written consent of the other party, and any
purported assignment by either party without the prior written consent of the
other party shall be void. This Agreement shall inure to the benefit solely of
and be binding upon the parties hereto and their respective successors (whether
by merger or otherwise). Notwithstanding the foregoing, the rights of Holders
may be assigned by such Holders to any Person acquiring any Registrable
Securities from such Holders, provided such transfer is not prohibited under the
Partnership Agreement or the Securities Purchase Agreement.
4.09. Remedies.
The parties hereto acknowledge that the remedy at law for any breach of the
obligations undertaken by the parties hereto is and will be insufficient and
inadequate and that the parties hereto shall be entitled to equitable relief, in
addition to remedies at law. In the event of any action to enforce the
provisions of this Agreement, each of the parties hereto waive the defense that
there is an adequate remedy at law. Without limiting any remedies any party may
otherwise have, in the event any other party refuses to perform its obligations
under this Agreement, the parties shall have, in addition to any other remedy at
law or in equity, the right to specific performance.
4.10. Waivers and Amendments.
Any waiver of any term or condition of this Agreement, or any amendment or
supplementation of this Agreement, shall be effective only if in writing. A
waiver of any breach or failure to enforce any of the terms or conditions of
this Agreement shall not in any way affect, limit or waive a party's rights
hereunder at any time to enforce strict compliance thereafter with every term or
condition of this Agreement.
4.11. Third Party Rights.
Except as provided in Section 3.09 hereof, this Agreement shall not create
benefits on behalf of any third party; and this Agreement shall be effective
only as between the parties hereto.
4.12. Illegalities.
In the event that any provision contained in this Agreement shall be determined
to be invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and the remaining provisions of this Agreement shall not, at the
election of the party for whose benefit the provision exists, be in any way
impaired.
4.13. Counterparts.
This Agreement may be executed in counterparts, and all such counterparts when
taken together shall constitute one Agreement.
In witness whereof, the undersigned have executed and delivered this Agreement
as of the date first above written
STAFF CAPITAL, L.P.
By: Staff Acquisition, Inc.
General Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
Co-Chairman of the Board of
Directors
Holders of Registrable Securities
Paribas Principal, Inc. Other Holders of Registrable Securities
By: /s/ Xxxx X. Xxxxxxx By:/s/ Xxxxxxx X. Xxxxx
------------------- --------------------
Xxxxxxx X. Xxxxx
Attorney-in-Fact
