Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
August 10, 1998 (this "Agreement"), among PREFERRED EMPLOYERS HOLDINGS, INC.,
a Delaware corporation (the "Company"), and XXXXXX XXXXXX-XXXXXXXX, XXXXXX
XXXXX, XXXXXX XXXXX AND XXXXXXX X. XxXXXXXXX (each a "Holder" and
collectively, the "Holders").
W I T N E S S E T H:
WHEREAS, the Holders are parties to that certain Stock Purchase Agreement,
dated as of July 10, 1998 (the "Stock Purchase Agreement"), by and between the
Holders and Preferred Healthcare Staffing, Inc. (the "Staffing"), a Delaware
corporation and a wholly-owned subsidiary of the Company, pursuant to which
Holders have certain registration rights covering the Transaction Shares; and
WHEREAS, pursuant to the terms contained herein, the Company agrees to
undertake to register under the Securities Act (as defined in Section 1 below)
all of the Transaction Shares held by Holders.
NOW, THEREFORE, in consideration of the parties entering into the
agreements and carrying out the transactions herein described, and for other
good and valuable consideration, the parties agree as follows:
1. DEFINITIONS. (a) As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any other
United States agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, or any similar
United States statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or a government or any
department or agency thereof.
"Registrable Securities" means (i) any Transaction Shares held by each
Holder and (ii) any securities issued or issuable with respect to any such
Transaction Shares held by such Holder by way of stock dividend or stock split.
As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities (A) when (i) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement, (ii) they shall have been distributed pursuant to Rule 144 (or any
successor provision) under the Securities Act, (iii) they shall have been
otherwise transferred and the subsequent disposition of such Registrable
Securities shall not require registration or qualification under the Securities
Act or any similar state law then in force or (iv) they shall have ceased to be
outstanding or (B) on the second anniversary of the date hereof.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including (i) all registration,
filing and NASD fees, (ii) all fees and expenses of complying with securities or
"blue sky" laws, and (iii) the fees and disbursements of counsel for the Company
and of its independent public accountants.
"Securities Act" means the Securities Act of 1933, or any similar United
States statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect at the time.
(b) All capitalized terms used herein which are not otherwise
defined shall have the meaning given to such terms in the Stock Purchase
Agreement.
2. REGISTRATION UNDER SECURITIES ACT.
(a) REGISTRATION STATEMENT FILING. The Company shall use reasonable
efforts to file a Registration Statement (such Registration Statement and any
and all amendments and supplements thereto, the "Registration Statement") under
the Securities Act covering the sale of the Registrable Securities or otherwise
cause the sale of the Registrable Securities to be included in a previously
filed Registration Statement by no later than seventy-five (75) days from the
date hereof, and will use reasonable efforts to have the Registration Statement
declared effective as soon as practicable thereafter.
(b) REGISTRATION STATEMENT FORM. Any registration under this Section
2(a) shall be on such appropriate registration form of the Commission as shall
be selected by the Company and as shall permit the disposition of the
Registrable Securities to be registered. The Company agrees to include in any
such Registration Statement all information which the Holders of Registrable
Securities being registered shall reasonably request.
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(c) EXPENSES. The Company shall pay all Registration Expenses in
connection with any registration pursuant to Section 2(a). Each Holder of
Registrable Securities included in the Registration Statement shall promptly pay
those expenses allocated to the registration of such Holder's Registrable
Securities, on a pro-rata basis, including, but not limited to, fees and
expenses of such Seller's legal counsel. The Company shall not be responsible
for any commissions resulting from the sale by any Holder of Registrable
Securities.
(d) REGISTRATION PROCEDURES. Whenever the Company is required to use
reasonable efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2(a), the Company will as
expeditiously as possible:
(i) use reasonable efforts to cause such Registration Statement
to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and any prospectus used in
connection therewith as may be necessary to keep such Registration
Statement continuously effective for a period of either nine (9) months or
such shorter period as will terminate when all of the Registrable
Securities covered by such Registration Statement have been disposed of,
and to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement until such time as all of such securities have been disposed of
by the Holder or Holders thereof set forth in such Registration Statement;
(iii) furnish to each Holder such number of conformed copies of
such Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits, but only one copy thereof to
each such Holder), such number of copies of any prospectus contained in
such Registration Statement (including each preliminary prospectus and any
summary prospectus) and any final prospectus filed under Rule 424 under the
Securities Act (the "Final Prospectus"), in conformity with the
requirements of the Securities Act, and such other documents in order to
facilitate the disposition of the Registrable Securities owned by such
Holders, as such Holder may reasonably request;
(iv) use reasonable efforts to register or qualify such
Registrable Securities under securities or "blue sky" laws of such
jurisdictions as each Holder thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such Registration
Statement remains in effect, and to take any other action which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the securities owned by such Holder;
PROVIDED, that the Company shall not for any such purpose be required to
(A) qualify generally to do business as a foreign corporation in any
jurisdiction where it would not otherwise be required to qualify but for
the requirements of
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this clause (iv), (B) consent to general service of process in any such
jurisdiction or (C) subject itself to taxation in such jurisdiction;
(v) use reasonable efforts to cause all Registrable Securities
covered by such Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be reasonably
necessary by virtue of the business and operations of the Company to enable
the Holder or Holders thereof to consummate the disposition of such
Registrable Securities;
(vi) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission;
(vii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration
Statement from and after a date not later than the effective date of such
Registration Statement;
(viii) promptly notify each Holder of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the discovery of the
happening of any event as a result of which the Final Prospectus included
in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein
not misleading in the light of the circumstances under which they were
made; and
(ix) use reasonable efforts to secure the designation of all such
Registrable Securities covered by such Registration Statement as a Nasdaq
SmallCap Market security or a security on any other securities exchange on
which the Company's Common Stock is then currently listed.
The Company may require each Holder of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such Holder and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (viii) of this Section 2(d), such Holder will forthwith discontinue such
Holder's disposition of Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause
(viii) of this Section 2(d) and, if so directed by the Company, such Holder will
use its best efforts to deliver to the Company (at the Company's expense) all
copies, other than permanent file copies
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then in such Holder's possession, of the Prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
3. INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. The Company
agrees to, indemnify and hold harmless each Holder of such Registrable
Securities against any losses, claims, damages or liabilities, joint or several,
to which such Holder may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (A) any untrue statement or alleged untrue statement of any
material fact contained (x) the Registration Statement under which the
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, Final Prospectus or summary prospectus contained therein or used in
connection with the offering of securities covered thereby, or any amendment or
supplement thereto or any document included by reference therein, or (y) in any
application or other document or communication (in this Section 3 collectively
called an "application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify any securities covered by such Registration
Statement under the "blue sky" or securities laws thereof, or (B) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; PROVIDED,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or omission or alleged omission, arising out of such Registration Statement, any
such preliminary prospectus, Final Prospectus, summary prospectus, amendment or
supplement, or in any application, which was in connection with, in reliance
upon, or in conformity with information prepared or furnished to the Company by
such Holder for use in the preparation thereof which information contained any
untrue statement of any material fact or omitted to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Holder. The Company shall not
be obligated to pay the fees and expenses of any counsel or firm of counsel for
any parties indemnified in respect of a claim unless in the reasonable judgment
of any such indemnified party a conflict of interest may exist between such
indemnified party and any other indemnified party in respect of such claim.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder of Registrable Securities
agrees to indemnify and hold harmless (in the same manner and to the same extent
as set forth in clause (a) of this Section 3) the Company, each director of the
Company, each officer of the Company and each other Person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such Registration Statement, any preliminary prospectus, Final Prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any application, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with information prepared
and furnished to the Company by such Holder for use in the preparation of such
Registration Statement, preliminary prospectus, Final Prospectus, summary
prospectus, amendment or supplement, or such
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application, which information contained any untrue statement of any material
fact or omitted to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling Persons
and shall survive the transfer of such securities by such Holder. The indemnity
provided by each Holder of securities under this Section 3(b) shall be provided
jointly and severally with any other Holder of Registrable Securities.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 3, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
PROVIDED, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 3, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, but the fees and expenses of such counsel shall be the
responsibility of the indemnified party. No indemnifying party shall, without
the consent of the 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. Notwithstanding anything
to the contrary, the indemnifying party shall not be liable for any settlement
of any such claim or action effected without its written consent, which consent
shall not be unreasonably withheld.
(d) CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances under which the indemnity contemplated by this Section 3 is for
any reason not available, the parties required to indemnify by the terms hereof
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company and any Holder of Registrable Securities, except to the extent that
contribution is not permitted under Section 11(f) of the Securities Act. In
determining the amounts which the respective parties shall contribute, there
shall be considered the relative benefits received by each party from the
offering of the Registrable Securities (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission and
any other equitable considerations appropriate under the circumstances. The
Company and each Holder of Registrable Securities agree that no Holder shall be
required to contribute any amount in excess of the amount such Holder would have
been required to pay to an indemnified party if the indemnities under clauses
(a) and (b) above of this Section 3 were available. For purposes
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of this clause (d), and each director and each officer of the Company who signed
the Registration Statement, and each Person, if any, who controls the Company or
a Holder of Registrable Securities within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Company or a
Holder of Registerable Securities, as the case may be.
4. RULE 144. The Company will file the reports required to be filed by
it under the Exchange Act and the rules and regulations promulgated by the
Commission thereunder and will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the Commission.
5. AMENDMENTS AND WAIVERS. This Agreement may be amended or waived only
with the prior written agreement signed by the Company and Holders of at least a
majority of all Registrable Securities at the time outstanding, and no course of
conduct or failure or delay in enforcing the provisions of this Agreement shall
affect the validity, binding effect or enforceability of this Agreement.
6. NOTICES. All communications provided for hereunder shall be in
writing and shall be delivered personally or sent by first-class mail (return
receipt requested) and addressed as follows:
(a) If to the Company, one copy to:
Preferred Employers Holdings, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Mr. Xxx Xxxxxx
with a copy to:
Xxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
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(b) If to a Holder, one copy to such Holder as follows:
(i) If to Xxxxxx Xxxxxx-Xxxxxxxx to:
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx-Xxxxxxxx
(ii) If to Xxxxxx Xxxxx:
0000 Xxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxx
(iii) If to Xxxxxx Xxxxx:
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxxx Xxxxx
(iv) If to Xxxxxxx X. XxXxxxxxxx:
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. XxXxxxxxxx
(v) with a copy in each case to:
Akerman, Senterfitt & Xxxxxx, P.A.
SunTrust International Center
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Any party by notice given in accordance with this Section 6 to the other
parties may designate another address or person for receipt of notices
hereunder. Notices by a party may be given by counsel to such party.
7. BINDING AGREEMENT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
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8. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. GOVERNING LAWS: SUBMISSION TO JURISDICTION. (i) THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
(ii) EACH OF THE PARTIES HERETO CONSENTS AND AGREES TO THE
JURISDICTION OF ANY COURTS OF THE STATE OF DELAWARE OR OF THE UNITED STATES
DISTRICT COURT FOR DELAWARE, AND WAIVES AND AGREES NOT TO PLEAD, OR CLAIM, IN
ANY SUCH COURT ANY OBJECTION BASED UPON VENUE OR FORUM NON CONVENIENS WITH
RESPECT TO ANY ACTION INSTITUTED THEREIN.
10. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
of Registrable Securities shall be enforceable to the fullest extent permitted
by law.
12. ENTIRE AGREEMENT. This Agreement is intended by the parties hereto as
a final expression of their agreement and intended to be a complete and
exclusive statement of their agreement and understanding in respect to the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
[Remainder Of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first above written.
PREFERRED EMPLOYERS HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Senior Vice President,
Chief Financial Officer and Secretary
/s/ Xxxxxx Xxxxxx-Xxxxxxxx
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XXXXXX XXXXXX-XXXXXXXX
/s/ Xxxxxxxx Xxxxxx as attorney in fact
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XXXXXX XXXXX
/s/ Xxxxxxxx Xxxxxx as attorney in fact
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XXXXXX XXXXX
/s/ Xxxxxx X. XxXxxxxxxx
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XXXXXX X. XxXXXXXXXX
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