Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
August 9, 2002, by and among Xxxx, Xxxxxx & Associates, Inc., a Delaware
corporation (the "Company"), OnStaff, a California corporation ("OnStaff"),
Healthcare Staffing Resources, Inc., a California corporation ("Healthcare"),
and Xxxxxxxxxxxx.xxx, a California corporation ("Boardnetwork," and
collectively, with OnStaff and Healthcare, the "Shareholders" and individually,
a "Shareholder").
RECITALS
WHEREAS, the Company, OnStaff Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of the Company ("Buyer"), the Shareholders, and certain
other parties named therein are concurrently entering into Asset Purchase
Agreements dated as of even date herewith (the "Asset Purchase Agreements"),
pursuant to which Buyer will acquire substantially all the assets of the
Shareholders in exchange for the Shares (as defined herein) as partial
consideration.
WHEREAS, in connection with entering into the Asset Purchase Agreements,
the Company agrees to grant the Shareholders certain registration rights with
respect to the Shares.
NOW, THEREFORE, in consideration of the above Recitals, which are
incorporated into this Agreement below by reference as if fully set forth
therein, and in consideration of the Shareholders consummating the transactions
described in the Asset Purchase Agreements, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
Shareholders, the Company agrees with the Shareholders as follows:
1. Certain Definitions. All capitalized terms used and not defined herein
shall have the meanings set forth in the Asset Purchase Agreement. The following
terms shall have the following respective meanings:
"Commission" shall mean the U.S. Securities and Exchange Commission.
"Common Stock" shall mean the common stock of the Company, par value
$0.001.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" shall mean any Shareholder holding Registrable Securities and
any person holding Registrable Securities to whom the rights under this
Agreement have been transferred in accordance with Section 10 hereof.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
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"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 5 hereof, but excluding any attorneys' fees
incurred by any Holder participating in such registration if such Holder is not
represented by the Company's counsel.
"Registrable Securities" means the Shares; provided, however, the
Shares shall only be treated as Registrable Securities if and so long as they
have not been (A) sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, (B) sold or saleable in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale, (C) sold or transferred pursuant to Rule 144 under
the Securities Act, or (D) sold or transferred to a person or entity other than
pursuant to Section 10 of this Agreement.
"Restricted Securities" shall mean the securities of the Company
required to bear the legend referring to the Securities Act set forth in Section
3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and all fees and disbursements of counsel for the Holders.
"Shares" shall mean the shares of Common Stock issued to the
Shareholders pursuant to the Asset Purchase Agreements.
2. Restrictions. The Shares shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Agreement, which conditions
are intended to ensure compliance with the provisions of the Securities Act. The
Shareholders shall cause any proposed purchaser, assignee, transferee or pledgee
of the Shares to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Agreement.
3. Restrictive Legend. Each certificate representing (i) the Shares and
(ii) any other securities issued in respect of the Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
be stamped or otherwise imprinted with legends in the following form (in
addition to any legend required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER ANY STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS EITHER (i) IN THE ABSENCE OF SUCH
REGISTRATION THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE COMPANY IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE REGISTRATION
REQUIREMENTS OF ALL APPLICABLE STATE SECURITIES LAWS OR (ii) THE SALE IS EXEMPT
FROM SUCH
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REGISTRATION REQUIREMENTS PURSUANT TO THE SECURITIES AND EXCHANGE COMMISSION'S
RULE 144."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A REGISTRATION RIGHTS AGREEMENT BETWEEN THE COMPANY
AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
Each Shareholder and Holder consents to the Company making a notation
on its records and giving instructions to any transfer agent of the Restricted
Securities in order to implement the restrictions on transfer established in
this Section 3.
4. Notice of Proposed Transfers. Prior to any proposed sale, assignment,
transfer or pledge of any Restricted Securities, unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail and either (i) shall be accompanied at
such holder's expense by an unqualified written opinion of legal counsel who
shall be, and whose legal opinion shall be, reasonably satisfactory to the
Company in form and substance, addressed to the Company, to the effect that the
proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act and any applicable state securities law or
(ii) state that the proposed transfer, sale, assignment or pledge is exempt from
the Commission's Rule 144, whereupon the holder of such Restricted Securities
shall be entitled to transfer such Restricted Securities in accordance with the
terms of the notice delivered by the holder to the Company. Each certificate
evidencing the Restricted Securities transferred as above provided shall bear,
except if such transfer is made pursuant to Rule 144, the appropriate
restrictive legends referring to the Securities Act set forth in Section 3
above, except that such certificate shall not bear such restrictive legend if,
in the opinion of counsel for such holder and the Company, such legend is not
required in order to establish compliance with any provisions of the Securities
Act.
5. Piggyback Registration.
(a) Notice of Registration. If at any time or from time to time, the
Company shall determine to register any of its securities for its own account
other than (i) a registration relating solely to employee benefit plans or (ii)
a registration relating solely to a Commission Rule 145 transaction, the Company
shall:
(1) promptly give to each Holder written notice thereof, and
(2) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests made within fifteen (15) days after receipt of such written notice
from the Company by any Holder, but only to the extent that such inclusion
will not diminish the number of securities included in the registration by
the Company.
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(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 5(a). In such event, the right of any Holder to registration
pursuant to this Section 5 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
the other holders distributing their securities through such underwriting) enter
into an underwriting agreement in reasonable and customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 5, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares or other securities to be underwritten, the managing underwriter may
limit the number of Registrable Securities to be included in the registration
and underwriting, on a pro rata basis based on the total number of securities
(including, without limitation, Registrable Securities) entitled to registration
pursuant to registration rights granted to the participating Holders by the
Company. The number of shares or other securities that may be included in the
registration and underwriting shall be allocated as follows: (i) first, to the
Company and (ii) second, to the shareholders of the Company electing to
participate in such registration such that each shareholder may include in such
registration that number of shares equal to: (A) the number of shares such
shareholder wants to register multiplied by (B) the quotient obtained by
dividing the number of shares owned by such shareholder by the number of shares
owned by all shareholders participating in the registration.
(c) Withdrawal; Lock-Up. If any Holder or other holder disapproves of
the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the managing underwriter no later than five
(5) business days prior to the date of the registration statement with respect
to the registration, is declared effective. Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration, and shall not
be offered, sold, loaned, granted any option for the purchase of, or otherwise
disposed of during the period of time (not to exceed 180 days) determined by the
Board of Directors of the Company upon advice of its managing underwriting, from
and after the effective date of the registration statement.
(d) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 5
prior to the effectiveness of such registration, whether or not any Holder has
elected to include securities in such registration. In such case, the Company
shall be deemed not to have effected a registration pursuant to Section 5 of
this Agreement.
(e) Not Demand Registration. Registration pursuant to this Section 5
shall not be deemed to be a requested registration. No Holder shall have the
right to demand registration of its Registrable Securities, nor shall any
provision in this Agreement be construed to provide any Holder such demand
rights.
6. Expenses of Registration. All Registration Expenses incurred in
connection with any registration pursuant to Section 5 shall be borne by the
Company. Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Holders and all other registration expenses incurred
in connection with registration pursuant to this Agreement shall be
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borne by the Holders of the registered securities included in such registration
pro rata on the basis of the number of shares so registered.
7. Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company shall:
(a) Prepare and file with the Commission a registration statement with
respect to such securities, including any amendments and supplements to the
registration statement and the prospectus contained therein, and use
commercially reasonable efforts to cause such registration statement to
become and remain effective for at least ninety (90) days.
(b) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number
of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably
request in order to facilitate the public offering of such securities.
(c) Use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such states or
jurisdictions.
(d) Notify each Holder of Registrable Securities covered by such
registration statement 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, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
8. Suspension of Registration. Following the effectiveness of a
registration statement (and the making of any required filings with any state
securities commissions), the Company may direct the Holders to suspend sales of
its Registrable Securities (the "Suspension Notice") and such Holders shall
immediately cease any sales of its Registrable Securities pursuant to the
registration statement, if one or more of the following events (each, a
"Suspension Event") occurs pending negotiations relating to, or consummation of,
a transaction or the occurrence of an event:
(a) that would require additional disclosure of material information
by the Company, the absence of which would make the registration statement
materially misleading,
(b) as to which the Company has a bona fide business purpose for
preserving confidentiality, or
(c) which renders the Company unable to comply with Commission
requirements;
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in each case under circumstances that would make it impracticable or
inadvisable (i) to take any action with respect to the registration statement,
the effectiveness or continued effectiveness thereof, or (ii) to promptly amend
or supplement the registration statement on a post-effective basis, as
applicable. Upon termination of a Suspension Event, the Holders may commence
effecting sales of the Registrable Securities pursuant to the registration
statement, accompanied by any required supplemental or amended prospectus
necessary to resume such sales, following a written notice to such effect from
the Company (the "Termination Notice"). If the Company is not able to terminate
a Section 8(b) or 8(c) Suspension Event, then, at the election of the holders of
a majority of the Registrable Shares included in the suspended registration
statement, the duration of the suspended registration statement shall be
extended for a period of time equal to the duration of the suspension.
9. Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders, the Registrable Securities held by them and
the distribution proposed by such Holder or Holders as the Company may request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 9.
10. Transfer of Registration Rights. This Agreement, and the rights and
obligations of each Shareholder hereunder, may only be assigned by such
Shareholder to:
(a) any shareholder of Shareholder, if Shareholder is a closely held
corporation;
(b) any spouse, direct descendant or trust for the benefit of the
Shareholder or such Shareholder's spouse or direct descendant, if Shareholder is
an individual; and
(c) any entity controlled by, controlling or under common control with the
Shareholder;
provided that (i) such transfer may otherwise be effected in accordance
with applicable securities laws, (ii) written notice of such assignment is given
to the Company, including the name and notice information of the transferee, and
(iii) the transferee agrees to be bound by the terms of this Agreement.
11. Termination of Rights. The registration rights of any particular Holder
under Section 5 shall terminate with respect to such Holder on the earlier of
(i) the first anniversary of the effective date of this Agreement or (ii) with
respect to any holder of Registrable Securities, at such time as the Holder is
able to dispose its Registrable Securities pursuant to Rule 144.
12. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California, without giving effect to
the principles of conflicts of law thereof. In the event that arbitration is
unavailable with respect to any action to enforce or that arises out of or in
any way relates to any of the provisions of this Agreement, such action shall be
brought and prosecuted exclusively in a Federal or state court located in Los
Angeles County, California, and the parties hereto hereby consent to the
jurisdiction of any such court and to the service of process by registered mail,
return receipt requested, or by any other manner provided by the laws of such
State.
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13. Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
14. Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
15. Entire Agreement; Amendment. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subject
matter hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought; provided, however, that holders of more than fifty
percent (50%) of the outstanding Registrable Securities may waive or amend, on
behalf of all Shareholders and other Holders of Shares, any provisions hereof
benefiting the Shareholders so long as the effect thereof will be that all such
Shareholders and other Holders of Shares will be treated equally.
16. Effect of Amendment or Waiver. The Shareholders and their successors
and assigns acknowledge that by the operation of Section 15 hereof the holders
of a majority of the outstanding Registrable Securities, acting in conjunction
with the Company, will have the right and power to diminish or eliminate any or
all rights or increase any or all obligations pursuant to this Agreement.
17. Rights of Holders Not Exclusive. Nothing contained in this Agreement
shall prohibit the Company from granting to any holder or prospective holder of
any securities of the Company registration rights which would allow such holder
or prospective holder to include securities of the Company in any registration
statement filed by the Company.
18. Notices, Etc. All notices and other communications hereunder shall be
in writing and shall be effective if it is delivered personally, couriered,
faxed or mailed (United States registered or certified mail, postage prepaid),
and shall be deemed to have been duly given (i) when received, if delivered
personally, (ii) when sent by facsimile upon receipt of confirmation, (iii) when
sent by express courier service (receipt requested) or (iv) five (5) calendar
days after being so mailed and received, as follows:
(a) If to Company, to: with copies to:
(which shall not constitute
notice)
Xxxx, Xxxxxx & Associates, Inc. Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 0000 Xxxx Xxxx Xxxx
Xxx Xxxx, XX 00000-0000 Xxxx Xxxx, XX 00000
Attn: Chief Executive Officer Attn: Xxxxx Xxxxx, Esq.
Telecopier No.: (000) 000-0000 Telecopier No.: (000) 000-0000
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(b) If to the Shareholders, to: with copies to:
(which shall not constitute notice)
c/o Xxxxxxx Xxxxxxxx Weinstock, Manion, Xxxxxxx,
0000 Xxxxxxxxxx Xxxx Xxxxx & Xxxxxxx
Xxxxxx, XX 00000 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Telecopier No.: (000) 000-0000 Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
or at such other address as any of the parties to this Agreement may hereafter
designate by written notice to the other parties.
19. Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to any holder of any Shares or to the Company upon any breach
or default under this Agreement shall impair any such right, power or remedy of
such holder or of the Company, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder or of the Company of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing or as
provided in this Agreement. All remedies, either under this Agreement or by law
or otherwise afforded to any holder, shall be cumulative and not alternative.
20. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. Severability of this Agreement. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties agree to replace such provision
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such provisions; provided
that no such severability will be effective against a party if it materially and
adversely changes the economic benefits of this Agreement to such party.
22. Headings, Etc. The headings of the Sections of this Agreement, and the
headings on the signature pages of this Agreement categorizing the signatories
hereto, have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms and provisions hereof.
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THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
COMPANY
XXXX, XXXXXX & ASSOCIATES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name:
Its:
SHAREHOLDERS
ONSTAFF, a California corporation
By: /s/ Xxxxxxx X. Xxxxx
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Name:
Its:
HEALTHCARE STAFFING RESOURCES, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name:
Its:
XXXXXXXXXXXX.XXX, a California
corporation
By: /s/ Xxxxx Xxxxxx Xxxxxxxx
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Name:
Its:
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
