1
EXHIBIT 99.7
(SCHEDULE OF DIFFERENCES ATTACHED)
PRIVATE SECURITIES SUBSCRIPTION AGREEMENT
COMFORCE CORPORATION/GLOBAL GROWTH LIMITED
February 27, 1997
THIS PRIVATE SECURITIES SUBSCRIPTION AGREEMENT (hereinafter the
"Agreement") has been executed by the undersigned in connection with the sale
in a private placement pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the "Securities Act"), of certain Subordinated Convertible
Debentures (hereinafter the "Debentures") of COMFORCE Corporation, 0000 Xxxxxx
Xxxxxx, Xxxx Xxxxxxx, Xxx Xxxx, 00000, a corporation organized under the laws
of Delaware (hereinafter "SELLER") to Global Growth Limited, located at 00
Xxxxxxxxxx Xxxx, Xxxx, Xxxxxxx, a corporation organized under the laws of
Nevis, West Indies (hereinafter "BUYER"). SELLER and BUYER (hereinafter
collectively the "parties") each hereby represents, warrants and agrees as
follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
(i) SELLER and BUYER are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded
by Rule 506 under Regulation D ("Regulation D") as promulgated by the
United States Securities and Exchange Commission under the Securities
Act;
(ii) BUYER hereby subscribes for Five Hundred Thousand Dollars
($500,000) U.S. principal amount of Debentures, redeemable at the
option of SELLER or convertible into shares of SELLER'S common stock
or cash by BUYER in accordance with the terms set forth in the form of
Debenture attached as Exhibit A to this Agreement. BUYER'S
subscription is part of a maximum placement of up to Twenty-Five
Million U.S. Dollars ($25,000,000) aggregate principal amount of
Debentures, which amount is inclusive of up to Three Million Seven
Hundred Thirty-Seven Thousand Five Hundred U.S. Dollars ($3,737,500)
of Debentures which may be issued by SELLER in connection with the
repurchase by SELLER of SELLER'S outstanding Series F Convertible
Preferred Shares.
(iii) In addition to the Debentures, BUYER may receive a number of
three year warrants ("Warrants") to purchase shares of the common
stock of SELLER, as provided in Section 5 hereof. The shares of
SELLER'S common stock underlying the Debentures and the Warrants are
hereinafter collectively referred to as the "Common Shares." The
Debentures, Warrants, and the Common Shares
2
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 2
underlying the Debentures and Warrants are collectively referred to as
the "Securities".
(iv) BUYER shall pay the purchase price by delivering to an escrow
agent, at the Closing, as defined in Section 8 hereof, either:
a) Same day funds payable in United States Dollars, to
be delivered to the order of SELLER upon delivery of the
Debentures; or
b) Original Series F Convertible Preferred Share
certificate(s) in the name of BUYER, having an aggregate face
value equal to $ _________, to be delivered to SELLER upon
delivery of the Debentures. Any accrued but unpaid dividends
on said Series F certificates will be paid to BUYER in cash
upon the later of Closing or March 1, 1997.
2. BUYER'S REPRESENTATIONS AND AGREEMENTS
BUYER represents, warrants and agrees as follows:
(i) BUYER understands that the Securities have not been registered
under the Securities Act, or any other applicable securities law, and,
accordingly, that they may not be offered, sold, transferred, pledged,
hypothecated or otherwise disposed of unless registered pursuant to,
or in a transaction exempt from registration under, the Securities Act
and any other applicable securities law;
(ii) BUYER is an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3), or (7) of Regulation D (an "Accredited Investor")
that is acquiring the Securities either for its own account or as a
fiduciary or agent for one or more institutional accounts as to which
it exercises sole discretion, each of which is an Accredited Investor.
BUYER has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an
investment in the Securities. BUYER has had a reasonable opportunity
to ask questions of and receive answers from SELLER concerning SELLER
and the offering of the Securities. BUYER is not subscribing for the
Debentures or Securities as a result of or pursuant to any
advertisement, article, notice, or other communication published in
any newspaper, magazine, or similar media or broadcast over television
or radio. BUYER is aware that it (or such institutional account) may
be required to bear the economic risk of an investment in the
Securities for an indefinite period, and it (or such institutional
account ) is able to bear such risk for an indefinite period;
(iii) BUYER is acquiring the Securities for its own account or for
one or more institutional accounts as described in Paragraph 2(ii)
hereof, in each case for
3
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 3
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution thereof (subject to any requirement
of law that the disposition of its property or the property of such
institutional account or accounts remain within its or their control).
BUYER agrees on its own behalf and on behalf of any such institutional
account for which it is acquiring the Securities to offer, sell or
otherwise transfer any of the Securities only to Accredited Investors
(subject to any requirement of law that the disposition of its
property or the property of such institutional account or accounts
remain within its or their control) in conformity with the Securities
Act and any other applicable securities law and with the restrictions
on transfer set forth on the certificate(s) evidencing the Securities.
BUYER acknowledges that each certificate evidencing the Debentures and
Warrants shall bear a legend substantially to the effect of the
foregoing paragraphs 2(i) and 2(ii) and this paragraph 2(iii). Such
legends shall be in substantially the following form:
(A) For the Debentures:
"NEITHER THIS DEBENTURE NOR ANY SECURITIES ISSUABLE UPON THE
CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY
STATE. NEITHER THIS DEBENTURE NOR ANY SECURITIES ISSUABLE UPON THE
CONVERSION HEREOF MAY BE OFFERED OR SOLD, TRANSFERRED PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS
THE BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A
PRIVATE SECURITIES SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY
AND GLOBAL GROWTH LIMITED DATED FEBRUARY 25, 1997. A COPY OF THE
PORTION OF THE AFORESAID SUBSCRIPTION AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES."
(B) For the Warrants:
"NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE. NEITHER
THESE SECURITIES NOR ANY SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
MAY BE OFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY
OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A PRIVATE
SECURITIES SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND GLOBAL GROWTH
LIMITED DATED FEBRUARY 25, 1997. A COPY OF THE PORTION OF THE
AFORESAID SUBSCRIPTION AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY BE
OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES."
(iv) BUYER acknowledges that SELLER or any transfer agent of
SELLER shall register the transfer or exchange of any of the
Debentures or Warrants only upon receipt of the certificate(s)
evidencing such Debentures or Warrants with the
4
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 4
transfer notice set forth thereon appropriately completed and upon
receipt in writing from the transferee or the recipient of such
Debentures or Warrants in such transfer or exchange (as the case may
be) of a certificate setting forth the representations in Paragraph 2
hereof;
(v) If BUYER is acquiring any of the Securities as fiduciary or
agent for one or more institutional accounts, BUYER represents that it
has sole investment discretion with respect to each such account and
that it has full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such institutional
account;
(vi) BUYER acknowledges that SELLER and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations
and agreements and further agrees that if, prior to the closing, any
of such acknowledgments, representations and agreements made by BUYER
are no longer accurate, BUYER will promptly notify SELLER;
(vii) BUYER has received all information necessary to make an
informed business decision with respect to an investment in the
Securities, including but not limited to SELLER'S latest Form 10-Q,
its S-1 Registration Statement filed February 3, 1997, and the Private
Placement Memorandum prepared by SELLER dated February 24, 1997.
(viii) This Agreement has been duly authorized, validly executed, and
delivered on behalf of BUYER and is a valid and binding agreement
enforceable in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally.
(ix) BUYER has no existing short position with respect to the
common stock of SELLER and agrees not to engage in any short sales or
other hedging transactions with respect to SELLER'S common stock;
provided however, that BUYER may enter into such transactions
involving a number of common shares not to exceed the number of Common
Shares for which a notice of conversion or election to purchase has
been submitted to SELLER in connection with the Debentures and
Warrants, respectively.
3. SELLER'S REPRESENTATIONS AND AGREEMENTS
SELLER represents, warrants and agrees as follows:
(i) SELLER has not conducted any general solicitation or general
advertising (as defined in Regulation D) with respect the Securities;
5
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 5
(ii) The Securities, when issued and delivered, will be duly and
validly authorized and issued, and with respect to the Common Shares
will be fully-paid and nonassessable and will not subject the holders
thereof to personal liability by reason of being such holders. There
are no preemptive rights of any shareholder of SELLER with respect to
the Securities;
(iii) This Agreement has been duly authorized, validly executed and
delivered on behalf of SELLER and is a valid and binding agreement in
accordance with its terms, subject to general principles of equity and
to bankruptcy or other laws affecting the enforcement of creditors'
rights generally;
(iv) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities and the transactions
contemplated by this Agreement do not and will not conflict with or
result in a breach by SELLER of any of the terms or provisions of, or
constitute a default under, the articles of incorporation (or charter)
or bylaws of SELLER, or any indenture, mortgage, deed of trust or
other material agreement or instrument to which SELLER is a party or
by which it or any of its properties or assets are bound, or any
existing applicable decree, judgment or order of any court, federal or
state regulatory body, administrative agency or other governmental
body having jurisdiction over SELLER or any of its properties or
assets;
(v) No authorization, approval or consent of or filing with any
federal, state or local governmental body of the United States is
legally required for the issuance and sale of the Securities as
contemplated by this Agreement;
(vi) The information provided by or on behalf of SELLER to BUYER
and referred to in Section 2(vii) of this Agreement does not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstance under which they are made, not misleading. Since
February 3, 1997, the date of SELLER'S most recent S-1 Registration
Statement, there has been no material adverse development in the
business, properties, operations, financial condition or results of
operations of SELLER, except as disclosed in the documents referred to
in Section 2(vii) hereof; and
(vii) SELLER will issue one or more certificates representing the
Debentures in the name of BUYER in such denominations to be specified
by BUYER prior to closing. The Debentures will bear the restrictive
legend specified in Section 2(iii) of this Agreement. SELLER further
warrants that no instructions other than these instructions and stop
transfer instructions to give effect to Section 2(i) hereof will be
given to the transfer agent and also warrants that the Debentures
shall otherwise be transferable on the books and records of SELLER as
and to the extent provided in this Agreement, subject to compliance
with federal and state
6
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 6
securities laws. Nothing in this Section shall affect in any way
BUYER'S obligations and agreement to comply with all applicable
securities laws upon resale of the Securities.
4. DEBENTURES.
(i) The Debentures will bear interest at the rate of eight percent
(8%) per annum during the 180 day period following the Closing, and
thereafter, ten percent (10%) per annum continuing until the
Debentures have been fully redeemed or converted. Interest on the
Debentures shall be payable quarterly in arrears, on the outstanding
principal amount thereof, in cash or in shares of SELLER'S common
stock, at SELLER'S option. If SELLER elects to pay the interest in
common stock, the valuation of such common stock will be based upon
the average closing bid price of SELLER'S common stock, as reported by
Bloomberg, L.P., over the five-trading day period ending on the day
preceding the date interest becomes due. Upon redemption or
conversion of the Debentures, all accrued but unpaid interest will be
added to the principal amount of Debentures redeemed by SELLER or
converted by BUYER;
(ii) Any Debentures left outstanding on the 360th day following
Closing will be automatically converted into Common Shares or, at the
option of SELLER, cash equal to 125% of the principal amount of the
outstanding Debentures;
(iii) Any Debentures redeemed by SELLER shall be redeemed in cash at
a premium to the principal amount thereof, which premium shall
increase in time according to the date of such redemption by SELLER as
set forth in the form of Debenture annexed hereto as Exhibit A;
(iv) The Debentures may be converted in whole or in part, at the
option of BUYER, beginning 181 days following Closing. SELLER shall
have the option, subject to the terms of Section 4(v) following, to
make the requested conversion in either cash or Common Shares. Any
such conversion paid in cash shall be payable at 125% of the principal
amount of the portion of the Debenture to be converted, including any
accrued but unpaid interest thereon. If SELLER elects to convert the
Debenture into Common Shares, the number of Common Shares issuable
upon conversion shall be determined by dividing the principal amount
of Debentures to be converted plus all accrued but unpaid interest
thereon, minus any required withholding, by 75% of the average closing
bid price of SELLER'S common stock over the five (5) trading day
period ending on the day prior to conversion;
7
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 7
(v) SELLER may issue no more than Two Million Five Hundred
Thousand (2,500,000) Common Shares upon conversion of the Debentures
and the exercise of the Warrants. In the event the aforesaid limit is
reached before BUYER has converted all of its Debentures, SELLER shall
honor any subsequent conversion requests in cash equal to 125% of the
principal amount of Debentures converted. Notwithstanding the
foregoing, the 2.5 million share limit may be increased to 3.5 million
shares if either: (i) SELLER'S shareholders approve the increase; (ii)
the American Stock Exchange ("AMEX") waives its requirement that said
increase be approved by SELLER'S shareholders, or advises SELLER that
shareholder approval is not required; or (iii) SELLER changes the
listing of its common stock from AMEX to either the New York Stock
Exchange ("NYSE") or the National Association of Securities Dealers
Automated Quotation System ("Nasdaq") under circumstances in which
shareholder approval is not required.
(vi) The Debentures will be subordinate to the terms and conditions
of revolving credit or other bank financing in favor of SELLER.
SELLER covenants and agrees that the total credit to be extended by
lenders senior to the purchasers of the Debentures offered hereby
shall not exceed $12.5 million, and that SELLER will take reasonable
steps to avoid defaulting on any senior debt during the term of the
Debentures, including all reasonable steps to cause the senior lender
or lenders to waive compliance by SELLER with any financial covenants
which may appear in any senior credit agreement, and which SELLER
believes, in good faith, must be waived to avoid a default by SELLER.
BUYER covenants and agrees that it will execute a Subordination
Agreement in a form no less favorable to those senior lenders than
that attached hereto as Exhibit C.
5. WARRANTS.
(i) Under the circumstances set forth in this Section 5,
SELLER shall issue three-year Warrants, prorated according to the
principal amount of Debentures issued to each investor in connection
with this placement, as follows: (a) the investors will receive
Warrants to purchase one hundred thousand (100,000) shares of SELLER'S
common stock at Closing; (b) if all Debentures are not redeemed by
SELLER within sixty (60) days of Closing, the investors will receive
Warrants to purchase an additional one hundred thousand (100,000)
shares of SELLER'S common stock on the sixty-first (61st) day
following Closing; (c) if all Debentures are not redeemed by SELLER
within ninety (90) days of Closing, the investors will receive
Warrants to purchase an additional one hundred thousand
(100,000)shares of SELLER'S common stock on the ninety-first (91st)
day following Closing; (d) if all Debentures are not redeemed by
SELLER within one hundred twenty (120) days of Closing, the investors
will receive Warrants to purchase an additional one hundred thousand
(100,000) shares of SELLER'S common stock on the one hundred
twenty-first (121st) day following Closing; and (e) if all
8
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 8
Debentures are not redeemed by SELLER within one hundred fifty (150)
days of Closing, the investors will receive Warrants to purchase an
additional one hundred thousand (100,000) shares of SELLER'S common
stock on the one hundred fifty-first (151st) day following Closing
provided, however, that the number of Common Shares issuable upon
exercise of the Warrants as set forth above shall be proportionally
reduced in the event that either (i) less than $25,000,000 U.S.
principal amount of Debentures are placed, or (ii) SELLER redeems less
than all outstanding Debentures from time to time. The Warrants will
have a strike price equal to the Market Price (defined as the average
closing bid price of SELLER'S common stock, as reported by Bloomberg,
L.P., over the five-day trading period ending on the day prior to the
date in question) at Closing and will become exercisable on the
six-month anniversary of Closing.
(ii) In addition, if SELLER has not redeemed all Debentures within
one hundred eighty (180) days of Closing, the investors shall receive
additional three-year Warrants (the "Additional Warrants") to
purchase five hundred thousand (500,000) shares of SELLER'S common
stock on the one hundred eighty-first (181st) day following closing,
prorated according to the principal amount of Debentures issued to
each investor in connection with this placement; provided, however,
that the number of Common Shares issuable upon exercise of the
Additional Warrants shall be proportionally reduced in the event that
either (i) less than $25,000,000 U.S. principal amount of Debentures
are placed, or (ii) SELLER redeems less than all outstanding
Debentures from time to time. The Additional Warrants will have a
strike price equal to the Market Price on the 180th day following
Closing and will be exercisable on the later of the issuance of the
Additional Warrants or the effective date of the Registration
Statement referred to below.
(iii) In order to include the Common Shares underlying the Warrants
and Additional Warrants in SELLER'S resale registration statement and
notwithstanding the provisions of Sections 5(i) and 5(ii) above,
SELLER may, at Closing, issue Warrants (the "Original Warrants") to
purchase the maximum number of Common Shares that each investor could
potentially become entitled to receive upon exercise of any Warrant or
Additional Warrant, which Original Warrants shall provide for exercise
upon satisfaction of the conditions to issuance as described in
Sections 5(i) and 5(ii) above (the "Conditions"). SELLER shall retain
the Original Warrants in its possession until such time as any of the
applicable Conditions are satisfied, whereupon SELLER shall issue and
deliver within two (2) business days a replacement Warrant or
Additional Warrant, as the case may be, to each investor with respect
to the Common Shares for which the Conditions are satisfied. The
Warrants and Additional Warrants so issued shall be exercisable as to
the
9
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 9
number of Common Shares and at the price stated thereon, as determined
pursuant to the terms of the Original Warrants and this Agreement.
6. CONVERSION OF DEBENTURES, EXERCISE OF WARRANTS, AND ISSUANCE OF
COMMON SHARES.
(i) On or after the 181st day following Closing, BUYER may convert
any outstanding Debentures into Common Shares or cash, at the option
of the SELLER, in accordance with the terms set forth herein and the
form of Debenture annexed hereto as Exhibit A;
(ii) All of the Warrants shall be exercisable into Common Shares,
on or after the 181st day following the Closing, in accordance with
the terms of the Common Stock Purchase Warrant Certificate annexed
hereto as Exhibit B; provided however, that the Additional Warrants,
if any, shall be exercisable upon the later of the issuance of the
Additional Warrants or the effective date of the Registration
Statement referred to below;
(iii) Upon conversion of the Debentures and exercise of the Warrants
and Additional Warrants following effectiveness of a registration
statement pursuant to Section 7 hereof, SELLER shall use its best
efforts to issue and deliver to BUYER an unlegended certificate or
certificates for the number of Common Shares to which BUYER shall be
entitled within five (5) business days after BUYER has fulfilled all
conditions required for conversion as set forth in this Agreement and
annexed forms of Debenture and Common Stock Purchase Warrant
Certificate made part of this Agreement (the "Deadline"). SELLER
understands that a delay in the issuance of the Common Shares beyond
the Deadline could result in economic loss to BUYER. As compensation
to BUYER for such loss, and not as a penalty, SELLER agrees to pay
liquidated damages to BUYER for late issuance of Common Shares upon
conversion of the Debentures in the amount of one percent (1%) of the
requested conversion amount per day, beginning on the seventh (7th)
business day from the date of receipt by SELLER of a duly executed
notice of conversion of the Debentures, provided that the original
Debentures to be converted have been delivered to SELLER within such
time period, all in accordance with this Agreement and the forms of
Debenture annexed hereto, and the requirements of SELLER'S transfer
agent. Said liquidated damages shall accrue each day through the date
the Common Shares are issued to BUYER, and shall be paid by wire
transfer to an account designated by BUYER upon the earlier to occur
of (i) issuance of said Common Shares to BUYER, or (ii) each monthly
anniversary of the receipt by SELLER of such BUYER'S notice of
conversion. Nothing herein shall waive SELLER'S obligations to
deliver Common Shares upon conversion of the Debentures or exercise of
the Warrants or limit BUYER'S right to pursue actual damages for
SELLER'S failure to issue and deliver Common Shares to BUYER in
accordance with the terms of this Agreement.
10
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 10
(iv) SELLER agrees that, in addition to any other remedies which
may be available to BUYER, in the event SELLER fails for any reason to
effect delivery to BUYER of certificates representing Common Shares
within seven (7) business days following receipt by SELLER of a notice
of conversion with respect to the Debentures or an election to
purchase with respect to the Warrants and Additional Warrants, BUYER
may revoke such notice of conversion or election to purchase by
delivering a notice of such effect to SELLER, whereupon SELLER and
BUYER shall each be restored to their respective positions immediately
prior to delivery of such notice of conversion or election to
purchase.
7. REGISTRATION. Subject to the terms of the Registration Rights
Agreement annexed hereto, SELLER must register the Common Shares
underlying the Debentures, Warrants and the Additional Warrants for
resale with the U.S. Securities and Exchange Commission ("SEC"), and
the registration statement therefor (the "Registration Statement")
must be declared effective by the SEC on or before the day prior to
the six-month anniversary of Closing (the "Required Effective Date").
In the event the Registration Statement has not been declared
effective by the Required Effective Date (such situation referred to
herein as "Late Registration"), SELLER shall pay to BUYER cash equal
to 1% of the aggregate subscription price for the first month and 2%
of the aggregate subscription price per month thereafter (the
"Penalties") until the Registration Statement is declared effective,
and as further provided in the Registration Rights Agreement annexed
hereto. Provided that SELLER has reasonably used its best efforts to
have the Registration Statement declared effective by the SEC prior to
the Required Effective Date, BUYER shall have no other remedy for
damages resulting solely from Late Registration for the period between
Closing and the nine-month anniversary of Closing. Thereafter, BUYER
shall be free to bring any action allowable in law or in equity
against SELLER as a result of Late Registration, and the Penalties
shall continue to apply until the Registration Statement has been
declared effective by the SEC and SELLER has notified BUYER of that
fact. These time periods, the Penalties, and other obligations under
the Registration Rights Agreement annexed hereto may be extended or
suspended under terms and conditions mutually agreed to in writing by
SELLER and BUYER.
8. THIRD PARTY BENEFICIARY. The parties acknowledge and agree that
Shoreline Pacific, the Institutional Division of Financial West Group
("Shoreline Pacific"), shall be deemed a third party beneficiary of
SELLER'S agreements and representations set forth in this Agreement,
entitled to enforce the terms thereof, and to indemnification for any
damages resulting to Shoreline Pacific from any actual or threatened
breach thereof by SELLER,
11
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 11
both in Shoreline Pacific's personal capacity and, should Shoreline
Pacific so elect, on behalf of BUYER.
9. CLOSING. Debentures shall be delivered to BUYER and the funds
therefor shall be delivered to SELLER on or before February 27,
1997(the "Closing") or at such time to be mutually agreed.
10. CONDITIONS TO CLOSING
(i) BUYER understands that SELLER'S obligation to sell the
Debentures is conditioned upon delivery into escrow or otherwise as
agreed between BUYER and SELLER by BUYER of the amount set forth in
Section 1 hereof.
(ii) SELLER understands that BUYER'S obligation to purchase the
Debentures is conditioned upon delivery of certificate(s) representing
Debentures as described in Section 1(ii) hereto and provision of an
opinion of counsel confirming the matters set out in Section 3(ii),
(iii), (iv)(limited as to the best of SELLER'S counsel's opinion)and
(v) above, in the form attached hereto as Exhibit D.
(iii) SELLER understands that BUYER'S obligation to purchase the
Debentures is conditioned upon SELLER and BUYER entering into a
Registration Rights Agreement substantially in the form of Annex I
hereto.
(iv) SELLER understands that BUYER'S obligation to purchase the
Debentures is contingent upon SELLER having consummated the sale of a
total placement of at least $13 million in the aggregate of Debentures
at Closing, inclusive of the Debentures being purchased by BUYER, each
pursuant to the terms of this Agreement and the other agreements
referred to herein, and similar such agreements with the other buyers
of the Debentures.
(v) SELLER, BUYER, Infinity Investors Ltd., and Seacrest Capital Ltd.
shall have executed a letter agreement on the terms as discussed and
agreed to between said parties prior to Closing.
(vi) Currently with Closing, SELLER must complete the acquisition of
RHO Company Incorporated on the terms and conditions as set forth in
the Private Placement Memorandum prepared by SELLER and dated February
24, 1997. Buyer understands, however, that such acquisition is to be
accomplished with the proceeds of the sale of the Debentures and must,
as a result, occur after the Closing hereunder but on the same day.
11. GOVERNING LAW; INTERPRETATION. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of New York
without
12
Mr. Xxxx XxxXxxxxx: February 25, 1997
COMFORCE Corporation/Global Growth Limited Page 12
giving effect to rules governing the conflict of laws. The parties
jointly consent to personal jurisdiction in any state or federal court
located in the state of New York, waive any objection as to
jurisdiction or venue, and agree not to assert any defense based on
lack of jurisdiction or venue. Facsimile signatures of this agreement
shall be binding on all parties hereto.
IN WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.
Official Signatory of BUYER:
GLOBAL GROWTH LIMITED
BY:/s/ XXXXX X. XXXXXX
--------------------------
Xxxxx X. Xxxxxx
Director
Official Signatory of SELLER:
COMFORCE CORPORATION
BY:/S/ XXXXXX XXXXXX
--------------------------
Xxxxxx Xxxxxx
Chief Accounting Officer
13
SCHEDULE OF DIFFERENCES
The Reporting Persons identified below have entered into separate
contracts substantially identical in all material respects to the form filed
herewith. Pursuant to General Instruction 2 to Item 601, the Reporting Persons
hereby file this Schedule of Differences to identify the material details in
which such documents differ from the form filed.
EXHIBIT 99.7 - PRIVATE SECURITIES SUBSCRIPTION AGREEMENT (BRIDGE LOAN)
Name of Reporting Person Principal Amount of Debentures
------------------------ ------------------------------
Infinity Investors Limited $3.0 M
Infinity Emerging Opportunities Limited $1.0 M
Fairway Capital Limited $1.0 M
Global Growth Limited $500,000
