1
Exhibit 10.93(c)
OUTSOURCE INTERNATIONAL, INC.
0000 XXXX XXXXXXX XXXXXX XXXXX
XXXXXXXXX XXXXX, XXXXXXX 00000
WARRANT PURCHASE AGREEMENT
--------------------------
Fleet National Bank
Comerica Bank
LaSalle Bank National Association
SunTrust Bank
c/o Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dated as of: August 15, 2000
Ladies and Gentlemen:
The undersigned, Outsource International, Inc., a Florida
corporation (hereinafter, together with its successors and assigns, the
"COMPANY"), proposes to issue and sell to each of Fleet National Bank, Comerica
Bank, LaSalle Bank National Association and SunTrust Bank (together with their
respective successors and assigns, each a "BANK" and, collectively, the
"BANKS"), Common Stock Purchase Warrants of the Company in the form of EXHIBIT A
hereto, on the terms and subject to the conditions contained in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINED TERMS
As used herein, the following terms shall have the respective meanings
assigned to them in this Article I:
"ABLECO SECURITIES" shall mean all shares of Common Stock issuable upon
exercise of the Common Stock Purchase Warrant dated the date hereof issued to
Ableco Holding LLC for the purchase of up to 200,000 shares of Common Stock.
2
-2-
"ARTICLES OF INCORPORATION" shall have the meaning ascribed to that
term in ss.2.1(a) hereof.
"ASSIGNMENT AGREEMENT" means the Assignment of Remaining Principal
dated as of the date hereof made by the Banks in favor of the Refinancing
Lenders.
"BANK" shall have the meaning ascribed to that term in the preamble
hereto.
"BANK AFFILIATE" shall have the meaning ascribed to that term in
Article IX hereof.
"CLOSING" shall have the meaning ascribed to that term in Article IV
hereof.
"CLOSING DATE" means the date of the Closing.
"CLOSING PRICE" means, with respect to shares of Common Stock on any
day, (i) the last reported sales price on such day on the principal stock
exchange or Nasdaq National Market System or Nasdaq SmallCap Market on which
such Common Stock is then listed or admitted to trading, (ii) if no sale takes
place on such day on any such exchange, system or market, the average of the
last reported closing bid and asked prices on such day as officially quoted on
any such exchange, system or market, (iii) if the Common Stock is not then
listed or admitted to trading on any stock exchange, the Nasdaq National Market
System or the Nasdaq SmallCap Market, the average of the last reported closing
bid and asked prices on such day in the over-the-counter market, as furnished by
the National Association of Securities Dealers Automated Quotation System or the
National Quotation Bureau, Inc. (or any similar firm then engaged in such
business), or (iv) if such prices in the over-the-counter market are not
available, the fair market value set by, or in a manner established by, the
Board of Directors of the Company, acting in good faith.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" shall have the meaning ascribed to that term in
ss.2.1(a) hereof.
"COMPANY" shall have the meaning ascribed to that term in the preamble
hereto.
"DELAY FEE" shall have the meaning ascribed to that term in ss.7.1(g)
hereof.
"DEMAND REGISTRATION" has the meaning ascribed to such term in
ss.7.1(a) hereof.
"ELIGIBLE PERCENTAGE" means, in relation to the Investors in connection
with a particular issue of New Securities, the percentage obtained by dividing
(i) the total number of Investor Shares held or deemed held of record by all
such Investors on the relevant Offer Date, by (ii) the sum of (A) such total
number of Investor Shares, PLUS (B) the total number of shares of Common Stock
(exclusive of Investor Shares) issued and outstanding on such Offer Date or
issuable upon conversion of or upon exercise of rights under any other
securities of the Company outstanding on such Offer Date.
0
-0-
"XXXXXXXX XXX" means the Securities Exchange Act of 1934, as amended,
or any federal statute or code which is a successor thereto.
"EXISTING INDEBTEDNESS" means the outstanding principal amount of
indebtedness of the Company in respect of loans outstanding under the Existing
OI Credit Agreement. The term does not include letter of credit reimbursement
obligations.
"EXISTING OI CREDIT AGREEMENT" shall mean the Third Amended and
Restated Credit Agreement dated as of July 27, 1998, as heretofore amended,
among the Company, certain subsidiaries of the Company, Fleet National Bank, as
agent and certain other financial institutions party thereto.
"EXISTING REGISTRATION RIGHTS AGREEMENTS" means (a) the Registration
Rights Agreement dated as of February 21, 1997 among the Company,
Triumph-Connecticut Limited Partnership, Bachow Investment Partners III, L.P.
and shareholders of the Company, (b) the registration rights granted by the
Company to Xxxxxx Xxxxxxx pursuant to that certain Separation Agreement and
Release dated as of April 6, 2000 between the Company and Xx. Xxxxxxx and (c)
the Registration Rights Agreement dated as of the date hereof between the
Company and Ableco Holding LLC.
"FORM X-0","XXXX X-0" and "FORM S-8" means the forms so designated,
promulgated by the Commission for registration of securities under the
Securities Act, and any forms succeeding to the functions of such forms, whether
or not bearing the same designation.
"HOLDERS" means, collectively, all Investors, including all transferees
of Investors; and the term "Holder" shall mean any one of the Holders.
"INDEMNIFIED PARTY" shall have the meaning ascribed to that term in
ss.7.7(c) hereof.
"INDEMNIFYING PARTY" shall have the meaning ascribed to that term in
ss.7.7(c) hereof.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Subordination
Agreement dated as of the date hereof among the Ableco Finance LLC, in its
capacity as agent pursuant to the Senior Credit Agreement, the lenders who are
from time to time parties to the Senior Credit Agreement, Fleet National Bank,
in its capacity as agent pursuant to the Subordinated Credit Agreement, the
lenders who are from time to time parties to the Subordinated Credit Agreement,
the Company and the subsidiaries of the Company.
"INVESTOR CONSENT" means, at any particular date, the consent, approval
or vote of the Majority Investors.
4
-4-
"INVESTORS" means, collectively, (i) each of the Banks so long as such
Banks shall continue to own and hold of record any of the Securities, (ii) each
transferee of any of the Banks so long as such transferee shall continue to own
and hold of record any of the Securities and (iii) each transferee of any other
Investor so long as such transferee shall continue to own and hold of record any
of the Securities.
"INVESTOR PERCENTAGE" shall have the meaning ascribed to that term in
ss.8.1(c) hereof.
"INVESTOR SHARES" means, in relation to any Investor at any particular
date, (i) all shares of Common Stock held of record by such Investor on such
date, and (ii) all shares of Common Stock issuable by the Company to such
Investor upon conversion of or in exchange for or upon exercise of rights under
all other capital stock or other securities (including the Warrants and any
other warrants and options) of the Company held of record by such Investor on
such date; and, in this Agreement, each Investor shall be deemed to hold of
record on any particular date the total number of shares of Common Stock
issuable by the Company upon conversion of or in exchange for or upon exercise
of rights under all capital stock or other securities (including the Warrants
and any other warrants or options) of the Company then held of record by such
Investor.
"MAJORITY INVESTORS" means, in relation to the Investors at any
particular date, Investors holding of record or deemed to be holding of record,
at such date, at least fifty-one percent (51%) of the total number of all
Investor Shares then held or deemed held of record by all Investors on such
date.
"MAJORITY OF THE REGISTRABLE SECURITIES" means, in relation to any
registration, more than fifty percent (50%) of all Registrable Securities
included or to be included in such registration.
"MINIMUM NUMBER" means, in relation to a Demand Registration, more than
twenty-five percent (25%) of all Registrable Securities included or to be
included in such registration.
"NASDAQ" means the National Association of Securities Dealers automated
quotation system.
"NEW SECURITIES" shall mean any capital stock of the Company of any
class, whether now authorized or not, and any rights, options or warrants to
purchase any such capital stock, and securities (including, without limitation,
debt obligations) of any type whatsoever that are, or may become, convertible
into or exchangeable for any such capital stock; PROVIDED, HOWEVER, that the
term "NEW SECURITIES" shall not include: (i) the Warrants issued or issuable by
the Company pursuant to this Agreement and all Warrant Shares issuable on
exercise of rights under any of the Warrants; (ii) shares of Common Stock issued
to the Company's directors, officers and employees pursuant to the Company's
Stock Option Plan; PROVIDED that in no event shall the total number of shares
5
-5-
of Common Stock issued pursuant to such Stock Option Plan exceed 2,000,000;
(iii) shares of Common Stock issued to an existing shareholder of the Company
pursuant to such shareholder's exercise of any preemptive rights held by such
shareholder to the extent such right arises or derives from the exercise by any
of the Investors of its preemptive rights under ss.8.1 hereof; (iv) shares of
Common Stock issued upon the exercise of currently outstanding warrants to
purchase an aggregate of up to 1,250,422 shares of Common Stock; (v) shares of
Common Stock issued to Ableco Holding LLC upon the exercise of warrants to
purchase an aggregate of up to 200,000 shares of Common Stock pursuant to that
certain Common Stock Purchase Warrant dated as of the date hereof; (vi) shares
of capital stock, or rights, options or warrants to purchase any such capital
stock, or securities convertible into or exchangeable for any such capital
stock, issued as partial consideration for any debt financing or any debt
refinancing extended to the Company; or (vii) shares of Common Stock to be
offered and sold pursuant to any underwritten public offering pursuant to an
effective Registration Statement under the Securities Act.
"NOTES" shall have the meaning for such term set forth in the
Subordinated Credit Agreement.
"OFFER DATE" shall have the meaning ascribed to that term in ss.8.1(a)
hereof.
"OFFER NOTICE" shall have the meaning ascribed to that term in
ss.8.1(a) hereof.
"PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.
"PIGGYBACK REGISTRATION" shall have the meaning ascribed to that term
in ss.7.2(a) hereof.
"PREFERRED STOCK" shall have the meaning ascribed to that term in
ss.2.1(a) hereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by any Prospectus supplement with respect
to the terms of the offering of any portion of the Registrable 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 in such prospectus.
"REFINANCING LENDERS" means Ableco Finance LLC, The CIT Group/Business
Credit, Inc. and the other lenders party to the Senior Credit Agreement.
"REGISTER, REGISTERED AND REGISTRATION" refers to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities Act and the declaration or ordering by the Commission of
effectiveness of such Registration Statement.
6
-6-
"REGISTRABLE SECURITIES" means, in relation to the Holders at any
particular time: (A) all shares of Common Stock issuable upon conversion of or
in exchange for or upon exercise of rights under any capital stock or other
securities (including, without limitation, options and warrants) of the Company
held of record by Holders at such time; and (B) all shares of Common Stock held
of record at such time by Holders.
"REGISTRATION EXPENSES" shall have the meaning ascribed to that term in
ss.7.6(a) hereof.
"REGISTRATION PERIOD" shall have the meaning ascribed to that term in
ss.7.1(g) hereof.
"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.
"RULE 144" means Rule 144 issued by the Commission under the Securities
Act, or any subsequent rule pertaining to the disposition of securities without
registration.
"SECURITIES" means the Warrants and the Warrant Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
federal statute or code which is a successor thereto.
"SENIOR CREDIT AGREEMENT" shall mean the Financing Agreement dated as
of the date hereof among the Refinancing Lenders, the Company, Outsource
International of America, Inc., Outsource Franchising, Inc., Guardian Employer
East, LLC and Guardian Employer West, LLC.
"SUBORDINATED CREDIT AGREEMENT" shall mean the Restructuring Agreement
dated as of the date hereof, as amended and in effect from time to time, among
the Company, Fleet National Bank, as agent and certain other financial
institutions party thereto.
"SUBSIDIARY" means, in relation to the Company at any particular time,
any other corporation at least fifty percent (50%) of the outstanding voting
shares in the capital of which shall be owned or controlled (whether directly or
indirectly) by the Company and/or by any one or more of the Company's other
Subsidiaries.
"TRADING DAY" shall mean any day on which trading takes place (a) if
the Common Stock is then listed or admitted to trading on the Nasdaq National
Market, on the Nasdaq National Market, (b) if the Common Stock is then listed or
admitted to trading on the Nasdaq SmallCap Market, on the Nasdaq SmallCap
Market, (c) if the Common Stock is
7
-7-
then listed or admitted to trading on a national securities exchange, on the
principal national securities exchange on which the Common Stock is then listed
or admitted to trading or (d) otherwise, in the over-the-counter market and
prices reflecting such trading are published by the National Association of
Securities Dealers Automated Quotation System or the National Quotation Bureau,
Inc.
"UNDERWRITERS' MAXIMUM NUMBER" shall have the meaning ascribed to that
term in ss.7.1(e) hereof.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" refers to any
registration in which securities of the Company are sold or to be sold pursuant
to a firm commitment underwriting.
"WARRANTS" shall have the meaning ascribed to that term in ss.2.2(a)
hereof and shall in any event include all other warrants delivered in exchange
or in substitution therefor.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of any of the Warrants.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Banks as follows:
SS.2.1. CAPITALIZATION OF COMPANY.
(a) The authorized capital stock of the Company consists of: (i)
10,000,000 shares of Preferred Stock, par value $.001 per share (the "PREFERRED
STOCK"), of which 1,000,000 shares are designated as Series A Participating
Preferred Stock, (the "SERIES A PREFERRED STOCK"); and (ii) 100,000,000 shares
of common stock, par value $.001 per share (the "COMMON STOCK"). The Common
Stock and the Preferred Stock have the voting powers, rights, and privileges
stated therefor in the Company's Articles of Incorporation (the "ARTICLES OF
INCORPORATION").
(b) The Company's issued and outstanding capital stock consists of
solely of 8,687,488 shares of Common Stock. All of such shares of Common Stock
have been duly and validly issued and are fully paid and non-assessable.
(c) Except for the Warrants and except as set forth on Schedule 5.2 of
the Subordinated Credit Agreement, the Company has not granted or issued any
options, warrants or other rights to acquire, or any securities convertible
into, any shares of Preferred Stock or Common Stock, and there are no agreements
of the Company for the purchase or sale of any shares of Preferred Stock or
Common Stock or securities exercisable for or convertible into shares of
Preferred Stock or Common Stock, other than
8
-8-
options granted under the Stock Option Plan exercisable for up to 2,000,000
shares of Common Stock (the "OUTSTANDING OPTIONS"). Except with respect to
Outstanding Options to purchase up to 20,000 shares of Common Stock, the
exercise price of all Outstanding Options is greater than or equal to $1.25 per
share.
(d) As of the Closing Date, after giving effect to the issuance of the
Warrants hereunder, (i) an aggregate of 10,485,303 shares of Common Stock are
issued outstanding on a fully-diluted basis and (ii) the Warrant Shares
constitute 5% of the issued and outstanding Common Stock on a fully-diluted
basis. As used in this Section 2.1(d), the issued and outstanding Common Stock
"on a fully-diluted basis" shall mean the outstanding Common Stock as diluted by
the issuance of all shares of Common Stock issuable as of the Closing Date upon
the exercise of all then outstanding and exercisable warrants, options or
convertible securities pursuant to which the Company is then obligated to issue
Common Stock, but specifically excluding all Common Stock issuable upon exercise
of Outstanding Options for which the exercise price is greater than or equal to
$1.25 per share.
SS.2.2. AUTHORIZATION OF WARRANTS.
(a) The Board of Directors of the Company has duly and properly
authorized (i) the issuance to the Banks of the Company's Common Stock Purchase
Warrants in the form of EXHIBIT A annexed hereto (the "WARRANTS") evidencing
rights to subscribe for and purchase from the Company 524,265 shares of the
Company's Common Stock and (ii) the issuance to the holders of the Warrants of
the shares of Common Stock issuable by the Company upon exercise of the
Warrants. Upon the issuance of the shares of Common Stock issuable by the
Company upon exercise of the Warrants in accordance with the terms thereof, such
shares shall be duly and validly issued, fully paid and nonassessable.
(b) The Warrants will be exercisable at any time and from time to time
prior to the expiration of the Warrants as set forth in clause (c) below at a
price, subject to adjustment as therein provided, of $.001 per Warrant Share.
The Warrants will be in the form of EXHIBIT A annexed to this Agreement.
(c) The Warrants shall expire upon the earliest to occur of (i)
exercise in full or (ii) August 15, 2010.
SS.2.3. APPROVALS; NO CONFLICTS, ETC.
(a) No approval, consent, authorization or other order of, and no
designation, filing, registration, qualification or recording with, any
governmental authority, domestic or foreign, stock exchange or Nasdaq National
Market System or similar governing body is required for the Company's
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than approvals, filings and registrations with the
Commission, Nasdaq and similar governmental authorities or governing bodies in
connection with the exercise of registration rights under Article VII hereof.
9
-9-
(b) The execution and delivery of this Agreement by the Company, and
the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby, do not result in any breach or violation of,
or any default under, any term or provision of (i) the Company's Articles of
Incorporation or By-laws, (ii) any indenture, mortgage, deed of trust, voting
trust agreement, stockholders agreement, note agreement, debt instrument or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its property is subject, or (iii) any statute, judgment, decree,
order, rule or regulation applicable to the Company or of any arbitrator, court,
regulatory body, administrative agency or any other governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
respective activities or properties.
(c) There is no action, suit, proceeding or investigation pending or,
to the knowledge of the Company, threatened, against the Company before or by
any court, regulatory body or administrative agency or any other governmental
agency or body, domestic or foreign, which challenges the validity of any action
taken or to be taken pursuant to or in connection with this Agreement or the
issuance of the Warrants or the Warrant Shares.
SS.2.4. OFFERING. Subject to the representations and warranties of the
Banks in Article V hereof, the offer, sale and issuance of the Securities as
contemplated by this Agreement are not subject to the registration requirements
of the Securities Act, and neither the Company, nor anyone acting on its behalf,
has taken or will take any action that would cause such registration
requirements to be applicable.
SS.2.5. REGISTRATION RIGHTS. Except for the Existing Registration
Rights Agreements, the Company is not under any obligation to register under the
Securities Act any of its currently outstanding securities or any of its
securities which may hereafter be issued.
SS.2.6. FORM 10-K AND FORM 10-Q. The Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1999 and the Quarterly Report on
Form 10-Q of the Company for the fiscal quarter ending March 31, 2000 each
complied as to form in all material respects with the applicable requirements of
the Exchange Act and does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading.
10
-10-
ARTICLE III
SALE AND PURCHASE
OF WARRANTS
SS.3.1. SALE AND PURCHASE OF WARRANTS. At the Closing hereunder, the
Company will issue and sell to the Banks or their designees, and, subject to the
terms and conditions hereof and in reliance upon the written representations and
warranties of the Company, the Banks or their designees will severally purchase
from the Company, for the aggregate purchase price specified in Section 3.2
below, the Warrants, in the respective amounts set forth below:
Number of shares of
Common Stock for which
the Warrants are Exercisable
----------------------------
Fleet National Bank 215,874
Comerica Bank 123,356
LaSalle Bank National 123,356
Association
SunTrust Bank 61,679
TOTAL: 524,265
SS.3.2. PURCHASE PRICE. The purchase price for the Warrants shall
consist of (a) the forgiveness by the Banks of a portion of the Existing
Indebtedness at the Closing pursuant to the Subordinated Credit Agreement and
(b) the assignment by the Banks at the Closing, pursuant to the terms of the
Assignment Agreement and at the request of the Company, to the Refinancing
Lenders or their nominees, of the Existing Indebtedness remaining after giving
effect to (i) the payment to the Banks in cash at the Closing of a portion of
the Existing Indebtedness, (ii) the exchange of a portion of the Existing
Indebtedness at the Closing for the Notes pursuant to the Subordinated Credit
Agreement and (iii) the forgiveness by the Banks of a portion of the Existing
Indebtedness at the Closing as contemplated by the foregoing clause (a).
ARTICLE IV
THE CLOSING
The closing under this Agreement (the "CLOSING") will take place at
9:00 a.m., local time, on August 15, 2000, or at such other time and on such
other date as may be mutually agreed upon in writing by the Banks and the
Company. At the Closing, the Company will (among other things) deliver to the
Banks the Warrants purchased by the Banks hereunder, duly executed by the
Company, and the Banks will deliver to the Company the total purchase price
payable by the Banks for the Warrants by executing and delivering to the Company
the Assignment Agreement. In addition, at the Closing, the
11
-11-
Company will deliver to the Banks an opinion of counsel in form and substance
reasonably satisfactory to the Banks.
ARTICLE V
REPRESENTATIONS OF THE BANKS
Each of the Banks severally represents and warrants to the Company
that:
(a) Such Bank is purchasing Warrants from the Company in accordance
with the terms hereof for such Bank's own account without a view to any
distribution thereof in violation of the Securities Act, but, SUBJECT,
NEVERTHELESS, to any requirement of law that the disposition of such Bank's
property shall at all times be within such Bank's control. Such Bank has been
informed and understands that the Securities have not been registered pursuant
to the provisions of Section 5 of the Securities Act and must be held
indefinitely unless such Securities are subsequently registered under the
provisions of the Securities Act or an exemption from such registration is
available.
(b) Such Bank is an "accredited investor" within the meaning of Rule
501(a) promulgated under the Securities Act.
(c) Such Bank understands that each stock certificate or instrument
representing or evidencing any Securities shall bear a legend in or
substantially in the following form:
"THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, and may not be
sold or transferred IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE SECURITIES LAW.
thIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED IN A WARRANT PURCHASE AGREEMENT DATED AS OF
August 15, 2000 AMONG THE COMPANY AND CERTAIN HOLDERS OF WARRANTS OF
THE cOMPANY. UPON WRITTEN REQUEST TO THE COMPANY'S SECRETARY, A COPY OF
THE WARRANT PURCHASE AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO
APPROPRIATELY INTERESTED PERSONS."
12
-12-
ARTICLE VI
COVENANTS OF COMPANY
The Company hereby covenants with each of the Investors that until all
of the Warrants have been exercised in full, except as otherwise expressly
permitted or provided, in any particular instance, by a written Investor
Consent:
SS.6.1. RECORDS AND ACCOUNTS. The Company will (i) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made and (ii) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of its properties and the properties of
its Subsidiaries, contingencies, and other reserves.
SS.6.2. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Company
will deliver to each of the Investors:
(a) as soon as practicable, but in any event not
later than ninety (90) days after the end of each fiscal year
of the Company, the consolidated balance sheet of the Company
and its Subsidiaries and the consolidating balance sheet of
the Company and its Subsidiaries, each as at the end of such
year, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow
for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such consolidated
and consolidating statements to be in reasonable detail,
prepared in accordance with generally accepted accounting
principles, and certified by Deloitte & Touche LLP or by other
independent certified public accountants of nationally
recognized standing selected by the Company;
(b) as soon as practicable, but in any event not
later than forty-five (45) days after the end of each of the
fiscal quarters of the Company, copies of the unaudited
consolidated balance sheet of the Company and its Subsidiaries
and the unaudited consolidating balance sheet of the Company
and its Subsidiaries, each as at the end of such quarter, and
the related consolidated statement of income and consolidated
statement of cash flow and consolidating statement of income
and consolidating statement of cash flow for the portion of
the Company's fiscal year then elapsed, all in reasonable
detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the
principal financial or accounting officer of the Company that
the information contained in such financial statements fairly
presents the financial position of the Company and its
Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within
thirty (30) days after the end of each month in each fiscal
year of the Company, unaudited monthly consolidated financial
statements of the Company and its Subsidiaries for such month
and unaudited monthly consolidating financial statements of
the Company and its Subsidiaries for such month, each
13
-13-
prepared in accordance with generally accepted accounting
principles, together with a certification by the principal
financial or accounting officer of the Company that the
information contained in such financial statements fairly
presents the financial condition of the Company and its
Subsidiaries on the date thereof (subject to year-end
adjustments);
(d) contemporaneously with the filing or mailing
thereof, copies of all materials filed with the Commission or
sent to the stockholders of the Company; and
(e) from time to time such other financial data and
information (including accountants' management letters) as any
Investor may reasonably request.
So long as the Subordinated Credit Agreement remains in effect, the
Company may satisfy its obligations under this ss.6.2 by delivering to each
Investor the information which it is required to deliver to the Bank under the
corresponding covenants contained in the Subordinated Credit Agreement at the
times required by such covenants.
ARTICLE VII
REGISTRATION RIGHTS
The Company hereby grants to the Investors certain rights to require
the Company to register Common Stock of the Company in compliance with the
Securities Act and certain rights to participate with the Company in any
registration by the Company of Common Stock under the Securities Act. The
provisions governing such registration rights are set out in this Article VII.
The Company and the Investors hereby absolutely and unconditionally agree to be
bound and governed by, and specifically make and adopt, all of the terms and
provisions contained in this Article VII. A Holder shall, for all purposes of
this Article VII, unless the context shall otherwise require, be deemed to hold,
at any particular time, all shares of Common Stock issuable upon conversion of
or in exchange for or upon exercise of rights under all capital stock or other
securities (including, without limitation, options and warrants) of the Company
held of record by such Holder at such time.
SS.7.1. DEMAND REGISTRATIOn.
(a) REQUESTS FOR DEMAND REGISTRATION.
(i) Subject to the limitations contained in the following
paragraphs of this ss.7.1, the Holders of a majority of the Registrable
Securities at any time outstanding may at any time and from time to
time give to the Company, pursuant to this clause (i), a written
request for the registration by the Company under the
14
-14-
Securities Act of all or any part of the Registrable Securities of such
Holders (such registration being herein called a "DEMAND
REGISTRATION"). Within ten (10) days after the receipt by the Company
of any such written request, the Company will give written notice of
such registration request to all Holders of Registrable Securities.
(ii) Subject to the limitations contained in the following
paragraphs of this ss.7.1, after the receipt of each such written
request for a Demand Registration, (A) the Company will be obligated
and required to include in such Demand Registration all Registrable
Securities with respect to which the Company shall receive from Holders
of Registrable Securities, within thirty (30) days after the date on
which the Company shall have given to all Holders a written notice of
registration request pursuant to ss.7.1(a)(i) hereof, the written
requests of such Holders for inclusion in such Demand Registration, and
(B) the Company will use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. All
written requests made by Holders of Registrable Securities pursuant to
this clause (ii) will specify the number of shares of Registrable
Securities to be registered and will also specify the intended method
of disposition thereof.
(b) LIMITATIONS ON DEMAND REGISTRATION.
(i) The Holders of Registrable Securities will not be entitled
to require the Company to effect more than one Demand Registration on
Form S-1 (or other comparable form adopted by the Commission). The
foregoing limitation shall not apply to Demand Registrations on Form
S-3 (or other comparable form adopted by the Commission), which shall
be unlimited in number.
(ii) The Company shall not be obligated or required to effect
any Demand Registration of any Registrable Securities pursuant to
ss.7.1(a) hereof unless and until the Holders shall have requested,
pursuant to ss.7.1(a)(ii) hereof, the inclusion in such Demand
Registration of not less than the Minimum Number of Registrable
Securities applicable to such Demand Registration.
(iii) Any registration initiated by Holders of Registrable
Securities as a Demand Registration pursuant to ss.7.1(a) hereof shall
not, for purposes of this ss.7.1, count as a Demand Registration unless
and until such registration shall have become effective and such
registration remains current and effective for a minimum period of one
year such that all such Registrable Securities included in such
registration which remain unsold may be sold pursuant thereto.
(iv) The Company shall not be obligated or required to effect
any Demand Registration of any Registrable Securities pursuant to
ss.7.1(a) hereof during the period commencing on the date falling sixty
(60) days prior to the Company's estimated date of filing of, and
ending on the date ninety (90) days
15
-15-
following the effective date of, any Registration Statement pertaining
to any underwritten registration initiated by the Company, for the
account of the Company, if the written request of Holders for such
Demand Registration pursuant to ss.7.1(a)(i) hereof shall have been
received by the Company after the Company shall have given to all
Holders of Registrable Securities a written notice stating that the
Company is commencing an underwritten registration initiated by the
Company; PROVIDED, HOWEVER, that the Company will use its best efforts
in good faith to cause any such Registration Statement to be filed and
to become effective as expeditiously as shall be reasonably possible.
(c) EFFECTIVE REGISTRATION - EXPENSES. In any registration initiated by
the Holders as a Demand Registration pursuant to ss.7.1(a) hereof, the Company
will pay all Registration Expenses of each such registration regardless of
whether such registration constitutes a Demand Registration for purposes of this
ss.7.1.
(d) LIMITATION ON RIGHTS TO PIGGYBACK ON DEMAND REGISTRATIONS.
(i) Neither the Company nor any of its securityholders (other
than Holders of Registrable Securities in their capacity as Holders and
the holder(s) of the Ableco Securities) shall have the right or
otherwise be entitled to include any of the Company's securities in any
registration initiated by Holders of Registrable Securities as a Demand
Registration pursuant to ss.7.1(a) hereof, unless (A) such securities
are of the same class as the Registrable Securities to be included in
such Demand Registration, and (B) if such Demand Registration is an
underwritten offering, the Company or (as the case may be) such
securityholders shall have duly and properly agreed in writing to sell
their securities on the same terms and conditions as shall apply to the
Registrable Securities to be included in such Demand Registration.
(ii) The Company will not grant or agree to grant to any
Persons any registration rights which will conflict or be inconsistent
in any respect with any of the provisions of clause (i) of this
ss.7.1(d). In the event of any such conflict or inconsistency, the
provisions of such clause (i) shall in any case prevail and be
controlling.
(e) PRIORITY ON DEMAND REGISTRATIONS. If any Demand Registration is an
underwritten offering, and the managing underwriters shall give written advice
to the Company and the Holders of Registrable Securities to be included in such
registration that, in the reasonable opinion of such managing underwriters,
marketing factors require a limitation on the total number of securities to be
underwritten (the "UNDERWRITERS' MAXIMUM NUMBER"), then: (i) the Company will be
obligated and required to include in such registration that number of
Registrable Securities and Ableco Securities requested by the holders thereof to
be included in such registration which does not exceed the Underwriters' Maximum
Number, and such number of Registrable Securities and Ableco Securities shall be
allocated PRO RATA among the holders of such Registrable Securities and
16
-16-
Ableco Securities on the basis of the number of Registrable Securities and
Ableco Securities requested to be included therein by each such holder; (ii) if
the Underwriters' Maximum Number exceeds the number of Registrable Securities
and Ableco Securities requested by the holders thereof to be included in such
registration, then the Company will be entitled to include in such registration
that number of securities which shall have been requested by the Company to be
included in such registration for the account of the Company and which shall not
be greater than such excess; and (iii) if the Underwriters' Maximum Number
exceeds the sum of the number of Registrable Securities and Ableco Securities
which the Company shall be required to include in such Demand Registration and
the number of securities which the Company proposes to offer and sell for its
own account in such registration, then the Company may include in such
registration that number of other securities which Persons (other than the
Holders as such) shall have requested be included in such registration and which
shall not be greater than such excess.
(f) SELECTION OF UNDERWRITERS. The holders of a Majority of the
Registrable Securities to be included in any Demand Registration shall determine
whether or not such Demand Registration shall be underwritten. If any Demand
Registration is an underwritten offering, or a best efforts underwritten
offering, the investment bankers and managing underwriters in such registration
will be selected by holders of a Majority of the Registrable Securities to be
included in such Demand Registration, subject to the approval of the Company,
not to be unreasonably withheld.
(g) FAILURE TO TIMELY COMPLETE DEMAND REGISTRATION. In the event that
the Company (i) fails to cause to be registered in accordance with this ss.7.1
(but subject to the limitations in clause (b) above) all of the Registrable
Securities subject to a written request for Demand Registration within 150 days
after the date of such written request (the "REGISTRATION PERIOD") or (ii) fails
to maintain, as current and effective, any Registration Statement filed and made
effective pursuant to a Demand Registration until the earlier of (i) such time
as all Registrable Securities included in such registration, and which were
actually offered for sale by the holder thereof, shall have been actually sold
or (ii) one (1) year from the effective date of such Registration Statement, the
Company shall, without prejudice to any other rights and remedies available to
the holders of Registrable Securities, pay ratably to the holders of the
Registrable Securities $50,000 for each month (pro rated for portions of a
month) during which such failure continues after the Registration Period or the
date on which the Registration Statement ceased to be current and effective (as
applicable) (the "DELAY FEE"). The Delay Fee, if any, shall be due and payable
on a monthly basis on the last day of each applicable month. In the event that
the Delay Fee or any portion thereof is not paid when due, the unpaid portion of
the Delay Fee shall bear interest compounded quarterly and payable on demand at
a rate per annum equal to five and one-half percent (5 1/2%) above the Base Rate
(as such term is defined in the Subordinated Credit Agreement). The Company
shall pay all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs) incurred by any holder of Registrable
Securities in connection with the collection of any Delay Fee payments or any
interest payable thereon. Notwithstanding the foregoing provisions of this
Section 7.1(g), the obligations of the Company under this Section 7.1(g) to make
any
17
-17-
payments of the Delay Fee, any interest thereon and any collection costs
associated therewith are subordinated to the prior payment in full of Senior
Indebtedness (as such term is defined in the Intercreditor Agreement) pursuant
to, and to the extent provided in, the Intercreditor Agreement.
SS.7.2. PIGGYBACK REGISTRATIONS.
(a) RIGHTS TO PIGGYBACK.
(i) If (and on each occasion that) the Company proposes to
register any of its securities under the Securities Act (other than
pursuant to a Demand Registration), either for the Company's own
account or for the account of any of its securityholders (other than
the Holders of Registrable Securities in their capacity as Holders)
(each such registration being herein called a "PIGGYBACK
REGISTRATION"), the Company will give written notice to all Holders of
Registrable Securities of the Company's intention to effect such
Piggyback Registration not later than the earlier to occur of (A) the
tenth day following the receipt by the Company of notice of exercise of
any registration rights by any Persons (other than the Holders of
Registrable Securities in their capacities as Holders), and (B) thirty
(30) days prior to the anticipated filing date of such Piggyback
Registration.
(ii) Subject to the provisions contained in paragraphs (c) and
(d) of this ss.7.2 and in the last sentence of this clause (ii), (A)
the Company will be obligated and required to include in each Piggyback
Registration all Registrable Securities with respect to which the
Company shall receive from Holders of Registrable Securities, within
thirty (30) days after the date on which the Company shall have given
written notice of such Piggyback Registration to all Holders of
Registrable Securities pursuant to ss.7.2(a)(i) hereof, the written
requests of such Holders for inclusion in such Piggyback Registration,
and (B) the Company will use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. The
Holders of Registrable Securities shall be permitted to withdraw all or
any part of the Registrable Securities of such Holders from any
Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. Any registration of Registrable Securities
pursuant to this ss.7.2 shall not be counted as a Demand Registration
pursuant to ss.7.1 hereof. The Company will not be obligated or
required to include any Registrable Securities in any registration
effected solely to implement an employee benefit plan or a transaction
to which Rule 145 of the Commission is applicable.
(b) PIGGYBACK REGISTRATION EXPENSES. The Company will pay all
Registration Expenses of each Piggyback Registration attributable to Registrable
Securities or otherwise incurred or sustained in connection with or arising out
of the inclusion in each such Piggyback Registration of Registrable Securities.
18
-18-
(c) PRIORITY ON PIGGYBACK REGISTRATIONS. If a Piggyback Registration is
an underwritten registration, and the managing underwriters shall give written
advice to the Company of an Underwriters' Maximum Number, then: (i) the Company
shall be entitled to include in such registration that number of securities
which the Company proposes to offer and sell for its own account in such
registration and which does not exceed the Underwriters' Maximum Number; (ii) if
the Underwriters' Maximum Number exceeds the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company will be obligated and required to include in such registration
that number of Registrable Securities and Ableco Securities requested by the
holders thereof to be included in such registration and which does not exceed
such excess and such Registrable Securities and Ableco Securities shall be
allocated PRO RATA among the holders thereof on the basis of the number of
Registrable Securities and Ableco Securities requested to be included therein by
each such holder; and (iii) if the Underwriters' Maximum Number exceeds the sum
of the number of securities which the Company shall be required to include in
such registration pursuant to clause (ii) and the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company may include in such registration that number of other
securities which persons shall have requested be included in such registration
and which shall not be greater than such excess.
(d) SELECTION OF UNDERWRITERS. In any Piggyback Registration, the
Company shall (unless the Company shall otherwise agree) have the right to
select the investment bankers and managing underwriters in such registration.
SS.7.3. LOCKUP AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
Each Holder of Registrable Securities, any of whose Registrable Securities are
included in any underwritten registration of the Company's securities, if the
Company or the managing underwriters so request in connection with such
registration, will not, without the prior written consent of the Company or such
underwriters, effect any public sale or other distribution of any equity
securities of the Company, including any sale pursuant to Rule 144, during the
seven (7) days prior to, and during the one hundred eighty (180) day period
commencing on, the effective date of such underwritten registration, except in
connection with such underwritten registration, except, in each case, to the
extent such Holder is prohibited by applicable law or exercise of fiduciary
duties from agreeing to withhold Registrable Securities from sale or is acting
in its capacity as a fiduciary or investment adviser; PROVIDED that each officer
and director of the Company and each holder of more than three percent (3%) of
the issued and outstanding shares of Common Stock shall enter into similar
agreements; and PROVIDED FURTHER, that in the event that the Company is unable
to complete an underwritten registration solely as a result of one or more
Holders declining to agree to withhold Registrable Securities from sale in the
exercise of such Holders' fiduciary duties or in such Holders' capacity as a
fiduciary or investment adviser, the Company shall not be deemed to have
breached its obligations to register Registrable Securities under this Article
VII with respect to such proposed
19
-19-
underwritten registration. Without limiting the scope of the term "fiduciary", a
Holder shall be deemed to be acting as a fiduciary or an investment adviser if
its actions or the Registrable Securities to be sold are subject to the Employee
Retirement Income Security Act of 1974, as amended, or the Investment Company
Act of 1940, as amended, or if such Registrable Securities are held in a
separate account under applicable insurance law or regulation.
(b) RESTRICTIONS ON PUBLIC SALE BY COMPANY. The Company agrees not to
effect any public sale or other distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such equity
securities, during the period commencing on the seventh day prior to, and ending
on the one hundred and eightieth day following, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration,
except in connection with any such underwritten registration and except for any
offering pursuant to an employee benefit plan and registered on Form S-8.
SS.7.4. REGISTRATION PROCEDURES. Whenever the Holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, 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, and pursuant thereto the Company will as
expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective (PROVIDED, that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company will furnish to counsel selected by the Holders of Registrable
Securities covered by such Registration Statement, copies of all such documents
proposed to be filed, which documents will be subject to the timely review of
such counsel and (i) in case of any Demand Registration, the Company will not
file any Registration Statement or amendment thereto or any Prospectus or any
supplement thereto, including documents incorporated by reference, to which the
Holders of a Majority of the Registrable Securities covered by such Registration
Statement shall reasonably object and (ii) in case of any Piggyback
Registration, the Company will not file any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto to which, as to any
information regarding the Holders of the Registrable Securities contained
therein, the Holders of a Majority of the Registrable Securities covered by such
Registration Statement shall reasonably object);
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
not more than six (6) months (one (1) year in case of a Demand Registration) and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during such effective
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement and cause the
20
-20-
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act;
(c) upon request, furnish to each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus and each Prospectus filed under Rule 424 of the
Securities Act) and such other documents as each such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by each such seller (it being understood that the Company consents to the
use of the Prospectus and any amendment or supplement thereto by such seller in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto);
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests, use its best efforts to keep each such
registration or qualification effective, including through new filings,
amendments or renewals, during the period such Registration Statement is
required to be kept effective, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; PROVIDED that the Company will not be required (i) to qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph (d), (ii) to subject itself to taxation in any
such jurisdiction or (iii) to consent to general service of process in any such
jurisdiction;
(e) notify each seller of such Registrable Securities, at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company will promptly prepare (and, when
completed, give notice to each seller of Registrable Securities) 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 fact necessary to make the
statements therein not misleading; PROVIDED that upon such notification by the
Company, each seller of such Registrable Securities will not offer or sell such
Registrable Securities until the Company has notified such seller that it has
prepared a supplement or amendment to such Prospectus and delivered copies of
such supplement or amendment to such seller;
(f) cause all such Registrable Securities to be listed, prior to the
date of the first sale of such Registrable Securities pursuant to such
registration, on each securities exchange or automatic quotation system, if any,
on which similar securities issued by the Company are then listed;
21
-21-
(g) provide a transfer agent for all such Registrable Securities not
later than the effective date of such Registration Statement;
(h) enter into all such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders of
a Majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;
(i) make available for inspection on a confidential basis by any
seller, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter (in each case after reasonable prior notice), all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees and independent
accountants to supply on a confidential basis all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(j) permit any Holder of Registrable Securities which Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company within the meaning of Section 15 of the
Securities Act, to participate in the preparation of such registration or
comparable statement and to permit the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Holder and
its counsel should be included, provided that such material shall be furnished
under such circumstances as shall cause it to be subject to the indemnification
provisions provided pursuant to ss.7.7(b) hereof;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order;
(l) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities in connection with any sale pursuant to a
Registration Statement, promptly incorporate in a Prospectus supplement or
post-effective amendment such information relating to such underwriting as the
managing underwriter or underwriters or such Holder reasonably requests to be
included therein, and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters incorporated in such Prospectus supplement or post-effective amendment;
(m) cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be sold under such registration, and
enable such Registrable Securities to be in such
22
-22-
denominations and registered in such names as the managing underwriter or
underwriters, if any, or such Holders may request;
(n) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
within the United States and having jurisdiction over the Company as may
reasonably be necessary to enable the seller or sellers thereof or the
underwriter or underwriters, if any, to consummate the disposition of such
Registrable Securities;
(o) use its best efforts to obtain:
(i) at the time of effectiveness of each registration, a
"comfort letter" from the Company's independent certified public
accountants covering such matters of the type customarily covered by
"cold comfort letters" as the Holders of a Majority of the Registrable
Securities covered by such registration and the underwriters reasonably
request; and
(ii) at the time of any underwritten sale pursuant to a
Registration Statement, a "bring-down comfort letter", dated as of the
date of such sale, from the Company's independent certified public
accountants covering such matters of the type customarily covered by
comfort letters as the Holders of a Majority of the Registrable
Securities covered by such Registration Statement and the underwriters
reasonably request;
(p) use its best efforts to obtain, at the time of effectiveness of
each Piggyback Registration and at the time of any sale pursuant to each
registration, an opinion or opinions, favorable in form and scope to the Holders
of a Majority of the Registrable Securities covered by such registration, from
counsel to the Company in customary form; and
(q) otherwise comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders (as contemplated
by Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover said twelve month period.
SS.7.5. COOPERATION BY PROSPECTIVE SELLERS, ETC.
(a) INFORMATION REQUESTS. Each prospective seller of Registrable
Securities will furnish to the Company in writing such information as the
Company may reasonably require from such seller in connection with any
Registration Statement with respect to such Registrable Securities.
23
-23-
(b) FAILURE TO COOPERATE. The failure of any prospective seller of
Registrable Securities to furnish any information or documents in accordance
with any provision contained in this Article VII shall not affect the
obligations of the Company under this Article VII to any remaining sellers who
furnish such information and documents unless, in the reasonable opinion of
counsel to the Company or the underwriters, such failure impairs or may impair
the viability of the offering or the legality of the Registration Statement or
the underlying offering.
(c) SUSPENSION OF SALES. The Holders of Registrable Securities included
in any Registration Statement will not (until further notice) effect sales
thereof after receipt of telegraphic or written notice from the Company to
suspend sales to permit the Company to correct or update such Registration
Statement or Prospectus; but the obligations of the Company with respect to
maintaining any Registration Statement current and effective shall be extended
by a period of days equal to the period such suspension is in effect.
(d) REMOVAL OF SHARES FROM REGISTRATION. At the end of any period
during which the Company is obligated to keep any Registration Statement current
and effective as provided by ss.7.4 hereof (and any extensions thereof required
by the preceding paragraph (c) of this ss.7.5), the Holders of Registrable
Securities included in such Registration Statement shall discontinue sales of
shares pursuant to such Registration Statement upon receipt of notice from the
Company of its intention to remove from registration the shares covered by such
Registration Statement which remain unsold, and such Holders shall notify the
Company of the number of shares registered which remain unsold promptly after
receipt of such notice from the Company.
(e) WARRANTS OR OPTIONS. Notwithstanding any other provision herein to
the contrary, no Holder of Registrable Securities which constitute warrants or
options shall be required to exercise such warrants or options in connection
with any registration prior to the applicable Registration Statement becoming
effective.
SS.7.6. REGISTRATION EXPENSES.
(a) EXPENSES BORNE BY THE COMPANY. All costs and expenses incurred or
sustained in connection with or arising out of each registration pursuant to
ss.7.1 or ss.7.2 hereof, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or Blue Sky laws
(including reasonable fees and disbursements of counsel for the underwriters in
connection with the Blue Sky qualification of Registrable Securities), printing
expenses, messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and of counsel for the sellers of Registrable Securities
(subject to the limitations contained in paragraph (b) of this ss.7.6), fees and
disbursements of all independent certified public accountants (including the
expenses relating to the preparation and delivery of any special audit or "cold
comfort" letters required by or incident to such registration), and fees and
disbursements of underwriters (excluding discounts and commissions, but
including underwriters' liability insurance if the Company or if the
underwriters so require), the reasonable fees and
24
-24-
expenses of any special experts retained by the Company of its own initiative or
at the request of the managing underwriters in connection with such
registration, and fees and expenses of all (if any) other Persons retained by
the Company (all such costs and expenses being herein called, collectively, the
"REGISTRATION EXPENSES"), will be borne and paid by the Company. The Company
will, in any case, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the expense of liability
insurance referred to above, and the fees and expenses incurred in connection
with the listing of the securities to be registered on each securities exchange
or other trading market or system on which similar securities of the Company are
then listed.
(b) ATTORNEYS' FEES; TAXES. In connection with each registration of
Registrable Securities pursuant to this Article VII, the Company will reimburse
the Holders of Registrable Securities being registered in such registration for
the reasonable fees and disbursements of one law firm which acts as counsel
chosen by the Holders of a Majority of the Registrable Securities. The Company
will not bear the cost of nor pay for any stock transfer taxes imposed in
respect of the transfer of any Registrable Securities to any purchaser thereof
by any Holder of Registrable Securities in connection with any registration of
Registrable Securities pursuant to this Article VII.
(c) PAYMENT BY HOLDER. To the extent that Registration Expenses
incident to any registration are, under the terms of this Article VII, not
required to be paid by the Company, each Holder of Registrable Securities
included in such registration will pay all Registration Expenses which are
clearly solely attributable to the registration of such Holder's Registrable
Securities so included in such registration, and all other Registration Expenses
not so attributable to one Holder will be borne and paid by all sellers of
securities included in such registration in proportion to the number of
securities so included by each such seller.
SS.7.7. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company will indemnify each Holder
requesting or joining in a registration and each underwriter of the securities
so registered, the officers, directors and partners of each such Person and each
Person who controls any thereof (within the meaning of the Securities Act),
against any and all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of any material fact contained in any Prospectus, offering
circular or other document incident to any registration, qualification or
compliance (or in any related Registration Statement, notification or the like)
or any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which the statements therein were made, not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
any action or inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such
25
-25-
Holder, officer, director, partner, controlling Person, and underwriter for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company in an instrument duly executed by such Holder, officer, director,
partner, controlling Person, or underwriter and stated to be exclusively and
specifically for use therein.
(b) INDEMNIFICATION BY EACH HOLDER. Each Holder requesting or joining
in a registration will indemnify each underwriter of the securities so
registered, the Company and its officers and directors and each Person, if any,
who controls any thereof (within the meaning of the Securities Act) and their
respective successors in title and assigns against any and all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of any material fact
contained in any Prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related Registration
Statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which the
statements therein were made, not misleading, and such Holder will reimburse
each underwriter, the Company and each other Person indemnified pursuant to this
paragraph (b) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; PROVIDED, HOWEVER, that this paragraph (b) shall apply only
if (and only to the extent that) such statement or omission was made in reliance
upon information furnished to the Company in any instrument duly executed by
such Holder and stated to be specifically for use in such Prospectus, offering
circular or other document (or related Registration Statement, notification or
the like) or any amendment or supplement thereto. The maximum liability under
this paragraph (b) of each Holder joining in any registration shall be limited
to the aggregate amount of all sales proceeds actually received by such Holder
upon the sale of such Holder's Registrable Securities in connection with such
registration.
(c) INDEMNIFICATION PROCEEDINGS. Each party entitled to indemnification
pursuant to this ss.7.7 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide indemnification pursuant to this ss.7.7 (the "INDEMNIFYING
PARTY") promptly after such Indemnified Party acquires actual knowledge of any
claim as to which indemnity may be sought, and shall permit the Indemnifying
Party (at its expense) to assume the defense of any claim or any litigation
resulting therefrom; PROVIDED that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be acceptable to the
Indemnified Party, and the Indemnified Party may participate in such defense at
such party's expense; and PROVIDED FURTHER, that if any Indemnified Party shall
have reasonably concluded that there may be one or more legal defenses available
to such Indemnified Party which are different from or additional to and are
inconsistent with those available to the Indemnifying Party, or that such claim
or litigation involves or could have
26
-26-
an effect upon matters beyond the scope of the indemnity agreement provided in
this ss.7.7, the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party and such Indemnifying
Party shall reimburse such Indemnified Party and any Person controlling such
Indemnified Party for that portion of the fees and expenses of any counsel
retained by the indemnified which are reasonably related to the matters covered
by the indemnity agreement provided in this ss.7.7; and PROVIDed, FURTHer, that
the failure by any Indemnified Party to give notice as provided in this
paragraph (c) shall not relieve the Indemnifying Party of its obligations under
this ss.7.7 except to the extent that the failure results in a failure of actual
notice to the Indemnifying Party and such Indemnifying Party is damaged (or the
indemnification liability of such Indemnifying Party hereunder would be
increased) solely as a result of the failure to give notice. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. The reimbursement required
by this ss.7.7 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
(d) CONTRIBUTION IN LIEU OF INDEMNIFICATION. If the indemnification
provided for in this ss.7.7 from the Indemnifying Party is unavailable to an
Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expense (or actions in respect thereof) referred to therein, then
the 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, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying and indemnified parties
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact,
has been made by, or relates to information supplied by, such Indemnifying Party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action; PROVIDED,
HOWEVER, that in no event shall the liability of any Holder hereunder be greater
in amount than the difference between the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
contribution obligation and all amounts previously contributed by such Holder
with respect to such losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this ss.7.7(d) were determined by PRO RATA allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the
27
-27-
immediately preceding paragraph. 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.
SS.7.8. RULE 144 REQUIREMENTS; FORM S-3. The Company will use its best
efforts to take such steps as are necessary to allow the Company to become, and
remain, eligible to register securities on Form S-3 (or any comparable form
adopted by the Commission) for resale purposes, and to make publicly available
and available to the Holders of Registrable Securities, pursuant to Rule 144 or
Rule 144A of the Commission under the Securities Act, such information as shall
be necessary to enable the Holders of Registrable Securities to make sales of
Registrable Securities pursuant to such Rules. The Company will furnish to any
Holder of Registrable Securities, upon request made by such Holder at any time,
a written statement signed by the Company, addressed to such Holder, as to
whether the Company has complied with the current public information
requirements of Rule 144 or Rule 144A. The Company will, at the request of any
Holder of Registrable Securities, upon receipt from such Holder of a certificate
certifying (i) that such Holder has held such Registrable Securities for a
period of not less than one (1) year, and (ii) that such Holder has not been an
affiliate (as defined in Rule 144) of the Company for more than the ninety (90)
preceding days, remove from the stock certificates representing such Registrable
Securities that portion of any restrictive legend which relates to the
registration provisions of the Securities Act.
SS.7.9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration pursuant to this Article VII unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled, under the
provisions contained in this Article VII, to approve such arrangements, and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required by the terms of
such underwriting arrangements, PROVIDED, HOWEVER, that no such indemnities or
underwriting agreements shall provide for indemnification or contribution
obligations of any Holder to a greater extent than the obligations of such
Holder set forth in ss.7.7(b) hereof. Any Holder of Registrable Securities to be
included in any underwritten registration shall be entitled at any time to
withdraw such Registrable Securities from such registration in the event that
such Holder shall disapprove of any of the terms of the related underwriting
agreement.
SS.7.10. NO INCONSISTENT AGREEMENTS. The Company will not, at any time
after the effective date of this Agreement, enter into, any agreement or
contract (whether written or oral) with respect to any of its securities which
is inconsistent in any respect with the registration rights granted by the
Company to Investors pursuant to Article VII of this Agreement or otherwise
conflicts with the provisions hereof.
SS.7.11. REGISTRABLE SECURITIES HELD BY THE COMPANY. Whenever the
consent or approval of Holders of Registrable Securities is required pursuant to
this Article VII, Registrable Securities held by the Company shall not be
counted in determining whether
28
-28-
such consent or approval was duly and properly given by such Holders pursuant to
and in compliance with any of the terms of Article VII of this Agreement.
SS.7.12. TERM. The agreements of the Company contained in this Article
VII shall continue in full force and effect so long as any Holder holds any
Registrable Securities.
ARTICLE VIII
GRANT OF PREEMPTIVE RIGHTS
The Company hereby grants to each of the Investors preemptive rights to
purchase a portion of New Securities that the Company may from time to time
after the effective date hereof propose to issue to any Person or Persons. The
preemptive rights granted to each of the Investors by this Article VIII shall be
governed by and subject to all of the terms and provisions contained in this
Article VIII:
SS.8.1. PREEMPTIVE RIGHTS.
(a) PROCEDURE FOR EXERCISING PREEMPTIVE RIGHTS. In the event (and on
each occasion) that the Company shall decide to undertake an issuance of New
Securities, the Company will give to each of the Investors written notice (an
"OFFER NOTICE") of the Company's decision, describing the type of New
Securities, the price, and the general terms upon which the Company has decided
to issue the New Securities. Each Investor shall have thirty (30) days from the
date on which the Company shall give the written Offer Notice to the Investors
(the "OFFER DATE") to agree to purchase such New Securities for the price and
upon the general terms specified in the Offer Notice, and in compliance with
paragraphs (c) and (d) of this ss.8.1, by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased by such
Investor. If, in connection with such a proposed issuance of New Securities, any
Investor shall for any reason fail or refuse to give such written notice to the
Company within such period of thirty (30) days, such Investor shall, for all
purposes of this Article VIII, be deemed to have refused (in that particular
instance only) to purchase any of such New Securities and to have waived (in
that particular instance only) all rights of such Investor under this Article
VIII to purchase any of such New Securities.
(b) FAILURE TO EXERCISE PREEMPTIVE RIGHTS. In the event that any
Investors shall fail or refuse to exercise in full their rights of first refusal
within said thirty (30) day period, the Company shall have one hundred twenty
(120) days thereafter to sell the quantity of New Securities which the Investors
did not agree to purchase pursuant to paragraphs (c) and (d) of this ss.8.1, at
a price and upon general terms no more favorable to the purchasers thereof than
specified in the Company's Offer Notice to each of the Investors. In the event
the Company has not sold the New Securities within said period of one hundred
twenty (120) days, the Company will not thereafter issue or sell any New
Securities without first offering such securities to each of the Investors in
the manner provided by the foregoing provisions of this Article VIII.
Notwithstanding the foregoing,
29
-29-
in the event that the New Securities consist of Common Stock or securities
convertible into or exercisable for Common Stock, any Investors that fail or
refuse to exercise in full their preemptive rights under ss.8.1(a) shall be
entitled to participate in the sale of New Securities by selling a pro-rata
portion (based on the number of shares of Common Stock held by such Investor
(determined on a fully-diluted basis) divided by the total number of shares of
Common Stock outstanding (determined on a fully-diluted basis) prior to the
issuance of the New Securities) of the total number of securities that would
otherwise be included in the New Securities proposed to be sold; PROVIDED, that
the provisions of the foregoing sentence shall not apply to the extent that a
Registration Statement is then in effect with respect to shares of Common Stock
held by such Investor. The Company will use its best efforts to obtain the
agreement of the prospective purchaser(s) of the New Securities to the
participation of such Investors in any contemplated sale.
(c) ALLOCATION OF NEW SECURITIES. Unless each of the Investors shall
otherwise agree in writing, New Securities to be issued by the Company on any
particular occasion shall be allocated among the Investors on the basis set
forth below in this paragraph (c) and in paragraph (d) of this ss.8.1. Each
Investor shall be entitled to purchase its Investor Percentage of any New
Securities to be issued by the Company at any time after the date hereof. As
used in this paragraph (c), in relation to any particular Investor and any
particular issue of New Securities, the term "INVESTOR PERCENTAGE" shall mean
the percentage obtained by multiplying:
(i) the percentage obtained by dividing (X) the total number
of Investor Shares held or deemed held of record on the Offer Date by
such Investor, by (Y) the total number of Investor Shares held or
deemed held of record on the Offer Date by all Investors; by
(ii) the Eligible Percentage applicable to that particular
issue of New Securities.
(d) ALLOCATION OF UNPURCHASED NEW SECURITIES. If any Investor shall
agree to purchase less than such Investor's PRO RATA portion of that part of an
issue of New Securities allocable to the Investors (as determined pursuant to
paragraph (c) of this ss.8.1), each Investor who shall be willing to purchase
more than such Investor'S PrO RAta portion of the New Securities allocable to
the Investors shall be entitled to such portion of the unallocated New
Securities as the total number of Investor Shares held or deemed held of record
by such Investor on the Offer Date bears to the total number of Investor Shares
held of record on the Offer Date by all of the Investors who shall be willing to
purchase more than their original PRO RATA portion of the New Securities
allocable to the Investors (as determined pursuant to paragraph (c) of this
ss.8.1). The procedure described in the preceding sentence for allocating New
Securities among Investors willing to purchase such New Securities shall be
repeated until all unallocated New Securities allocable to the Investors shall
have been allocated among Investors willing to purchase such unallocated New
Securities, all in compliance with the provisions contained in the preceding
sentence of this paragraph (d).
30
-30-
(e) COVENANT OF INVESTORS. Each Investor covenants with the Company and
each of the other Investors that each written notice given to the Company by
such Investor pursuant to paragraph (a) of this ss.8.1 shall be consistent and
in compliance with the terms of paragraphs (c) and (d) of this ss.8.1.
(f) DESIGNATION RIGHTS. Each Investor may designate any transferee of
such Investor to exercise any preemptive rights of such Investor under this
Article VIII.
SS.8.2. NO INCONSISTENT AGREEMENTS. The Company has not entered into,
and will not, at any time after the Closing Date of this Agreement, enter into,
any agreement or contract (whether written or oral) which is inconsistent in any
respect with the preemptive rights granted by the Company to the Investors
pursuant to Article VIII of this Agreement.
ARTICLE IX
REGULATORY RESTRICTIONS
Any other provisions hereof to the contrary notwithstanding, no Person
which is a bank holding company or a subsidiary of a bank holding company (a
"BANK AFFILIATE") as defined in the Bank Holding Company Act of 1956, as
amended, or other applicable banking laws of the United States of America and
the rules and regulations promulgated thereunder shall be entitled to exercise
the right under the Warrants to purchase any share or shares of Common Stock if,
under any law or under any regulation, rule or other requirement of any
governmental authority at any time applicable to such Bank Affiliate, (a) as a
result of such purchase, such Bank Affiliate would own, control or have power to
vote a greater quantity of securities of any kind than the Bank Affiliate shall
be permitted to own, control or have power to vote, or (b) such purchase would
not be permitted. For purposes of this Article IX, a written statement of the
Bank Affiliate exercising the Warrant, delivered upon surrender of the Warrant
pursuant to the terms thereof, to the effect that the Bank Affiliate is legally
entitled to exercise its rights under the Warrant to purchase securities and
that such purchase will not violate the prohibitions set forth in the preceding
sentence, shall be conclusive and binding upon the Company and shall obligate
the Company to deliver certificates representing the shares of Common Stock so
purchased in accordance with the other provisions hereof and shall relieve the
Company of any liability under this Article IX.
ARTICLE X
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
SS.10.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties of the Company and of the Banks and the Investors contained in this
Agreement, or any agreement, instrument or document delivered pursuant to any of
the provisions of this
31
-31-
Agreement, shall survive the execution and delivery of this Agreement, any
examination or investigation conducted by or on behalf of the Company or the
Banks, and the Closing hereunder.
SS.10.2. INDEMNIFICATION FOR MISREPRESENTATIONS. The Company agrees to
indemnify and hold each of the Banks harmless from and against, and to pay to
each of the Banks, on demand by any Bank from time to time, the full amount of
any loss, claim, damage, liability, cost or expense (including reasonable
attorneys' fees) resulting to any Bank from any false, incorrect or misleading
representation or warranty of the Company contained in this Agreement, or any
agreement, instrument or document delivered by the Company to any Bank pursuant
to any of the provisions of this Agreement.
SS.10.3. EXPENSES. Whether or not all or any of the arrangements or
transactions contemplated by this Agreement or by any of the Warrants shall be
consummated, the Company agrees to pay to the Investors, on demand by the
Investors: (a) all of the reasonable legal fees, PLUS all reasonable
out-of-pocket expenses and disbursements, of Xxxxxxx Xxxx LLP, special counsel
for Fleet National Bank, which have been or shall be incurred or sustained at
any time in connection with the preparation, negotiation, execution or delivery
of this Agreement, any of the Warrants or any other agreements, instruments or
documents relating thereto; and (b) all reasonable out-of-pocket costs and
expenses which shall be incurred or sustained by any Investor at any time in
connection with any modifications or amendments to or consents, approvals or
waivers under this Agreement or any of the Warrants, or in connection with any
litigation, proceeding or dispute arising out of or relating to this Agreement
or any of the Warrants or relationships created thereby, or in connection with
any action or proceeding taken by any Investor to protect or preserve all or any
of the rights, remedies, powers or privileges of such Investor under any of such
documents or to enforce any of the covenants, agreements or obligations of the
Company under any of such documents (including, without limitation, all of the
reasonable fees and disbursements of legal counsel for each Investor).
ARTICLE XI
MISCELLANEOUS
SS.11.1. NOTICES.
(a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in hand, mailed by United States
registered or certified first-class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and confirmed by
delivery via courier or postal service, addressed as follows:
(i) if to the Company, at the address of the Company set forth
on the first page hereof, or at such other address as shall have been
furnished to each of the Investors in writing by the Company, and a
copy thereof shall in any event be simultaneously transmitted to Xxxx
X. Xxxxxx, Esq., Akerman, Senterfitt & Xxxxxx,
32
-32-
P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000-0000; or
(ii) if to any Investor, at such addresses (in each case) as
shall have been furnished to the Company and to the other Investors by
such Investor in writing, and a copy thereof shall in any event be
simultaneously transmitted to Xxxxx X. Xxxxx, Esq., Xxxxxxx Xxxx LLP,
000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000.
(b) Any notice or other communication pursuant to this Agreement shall
be deemed to have been duly given or made and to have become effective (i) if
delivered by hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of receipt thereof by such
officer or the sending of such facsimile or (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third business day following
the mailing thereof.
SS.11.2. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A
SEALED INSTRUMENT. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.
SS.11.3. AMENDMENTS AND WAIVERS.
(a) Except as otherwise provided by paragraph (b) of this ss.11.3, and
except as otherwise expressly required by any other provisions of this
Agreement, none of the terms or provisions contained in this Agreement, and none
of the agreements, obligations or covenants of the Company contained in this
Agreement, may be amended, modified, supplemented, waived or terminated unless
(i) the Company shall execute an instrument in writing agreeing or consenting to
such amendment, modification, supplement, waiver or termination, and (ii) the
Company shall receive a prior written Investor Consent therefor.
(b) Each of the terms and provisions contained in this ss.11.3 or in
the definitions oF INVESTor CONSEnt or MAJORITY INVESTORS contained in Article I
hereof may be amended, modified, supplemented, waived or terminated only by a
written instrument or consent signed by the Company and by each of the Investors
holding of record any Securities at the effective date thereof.
(c) In connection with any action taken or to be taken pursuant to
paragraph (a) of this ss.11.3, there shall be no obligation or requirement on
the part of the Company, any of the Investors or any other Persons (i) to
solicit or to attempt to solicit from all of the Investors the consent or
approval of all of the Investors for such action, or (ii) to submit any notices
of any kind to all of the Investors in advance of any action proposed to be
taken pursuant to paragraph (a) of this ss.11.3. However, copies of all written
consents or approvals given by Investors in connection with any action taken or
to be taken pursuant to and in compliance with paragraph (a) of this ss.11.3
shall be sent by the Company,
33
-33-
promptly after the receipt thereof by the Company, to each Investor who shall
have failed or refused to give a written consent or approval for such action.
(D) Any action taken pursuant to and in compliance with paragraph (a)
of this ss.11.3 shall be binding upon the Company and upon all of the Investors,
including all of the Investors who shall have failed or refused to give a
written consent or approval for such action.
SS.11.4. PROPORTIONAL ADJUSTMENTS. There are references in this
Agreement to a specific price per share of the Company's Common Stock or to a
specific number of shares in the capital of the Company. The specific price per
share and the specific number of shares so stated are effective as of the
Closing Date. The specific price per share and the specific number of shares so
stated shall (in each case) be proportionally adjusted from time to time if (and
on each occasion that) there shall be effected by the Company any stock
dividend, stock split, subdivision of shares, combination of shares,
reclassification, recapitalization or other similar corporate reorganization
affecting the capital structure of the Company. The exact amount and the
effective date of each adjustment effected pursuant to this ss.11.4 shall be
determined in good faith and on a reasonable basis by the Board of Directors of
the Company. The Company shall promptly notify each Investor in writing of each
such adjustment.
SS.11.5. INTEGRATION. Annexed to this Agreement iS EXHIBiT A. SucH
EXHIBit is an integral part of this Agreement and is hereby incorporated by
reference.
SS.11.6. RIGHTS AND OBLIGATIONS SEVERAL. The rights and obligations of
each of the parties hereto shall be several (and not joint), except as otherwise
expressly provided by this Agreement.
SS.11.7. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of any Investor in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SS.11.8. ENTIRE AGREEMENT. This Agreement and the Warrants constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes any prior understandings or agreements concerning the
subject matter hereof.
SS.11.9. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
SS.11.10. BINDING EFFECT. All of the covenants and agreements of the
Company contained in, and all of the rights granted by the Company pursuant to,
this Agreement,
34
-34-
shall inure to the benefit of each Investor, including each of the transferees
of such Investor. Each Investor may assign or transfer any of such rights to any
such transferee.
SS.11.11. COUNTERPARTS. This Agreement may be executed simultaneously
in several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement. In making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart signed by each of the parties hereto.
35
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return such
counterpart to the undersigned, whereupon this Agreement, as so accepted by you,
shall become a binding agreement under seal between you and the undersigned.
Very truly yours,
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Xxx X. Xxxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxxx
Title: Vice President
Attest
------------------------
Dated as of: August 15, 2000
The foregoing Warrant Purchase Agreement with Outsource International,
Inc. is hereby accepted by the undersigned on and as of the date thereof.
INVESTORS:
FLEET NATIONAL BANK
By: /s/ C. Xxxxxxxxxxx Xxxxx
-------------------------------
Name: C. Xxxxxxxxxxx Xxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
36
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: First Vice President
SUNTRUST BANK
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
