Exhibit 10.11
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WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of November 26, 1997
by and among
COMFORCE CORPORATION, INC.
and
NATWEST CAPITAL MARKETS LIMITED
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TABLE OF CONTENTS
Page
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1. Definitions................................................................1
2. Shelf Registration.........................................................3
3. Registration Procedures....................................................4
4. Registration Expenses.....................................................10
5. Indemnification...........................................................10
6. Rule 144..................................................................13
7. Underwritten Registrations................................................13
8. Miscellaneous.............................................................14
(a) No Inconsistent Agreements...........................................14
(b) Adjustments Affecting Warrant Shares.................................14
(c) Amendments and Waivers...............................................14
(d) Notices..............................................................14
(e) Successors and Assigns...............................................15
(f) Counterparts.........................................................15
(g) Headings.............................................................15
(h) Governing Law........................................................16
(i) Severability.........................................................16
(i)
WARRANT REGISTRATION RIGHTS AGREEMENT
This Warrant Registration Rights Agreement (the "Agreement") is dated as of
November 26, 1997, by and among COMFORCE Corporation, a Delaware corporation
(the "Company"), and NatWest Capital Markets Limited (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase Agreement,
dated November 19, 1997, among the Company and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchaser of 20,000 units (the "Units") consisting of $1,000 principal amount of
15% Senior Secured PIK Debentures due 2009 (the "Senior Debentures") and 8.45
Warrants (the "Warrants"), each Warrant to purchase one share of common stock.
Full exercise of the Warrants would result in the purchase of 169,000 shares of
common stock (the "Warrant Shares"), or approximately 1% of the Company's shares
on a fully diluted basis. In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement for the benefit of the Initial Purchaser and
its direct and indirect transferees. The execution and delivery of this
Agreement is a condition to the obligation of the Initial Purchaser to purchase
the Units under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: Has the meaning provided in the last paragraph of Section 3 hereof.
Agreement: Has the meaning provided in the first introductory paragraph
hereto.
Company: Has the meaning provided in the first introductory paragraph
hereto.
Effectiveness Date: The 130th day after the Issue Date.
Effectiveness Period: Has the meaning provided in Section 2(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
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Filing Date: The day 30 days after the Issue Date.
Holder: Any holder of Warrant Shares.
Indemnified Person: Has the meaning provided in Section 5(c) hereof.
Indemnifying Person: Has the meaning provided in Section 5(c) hereof.
Initial Purchaser: Has the meaning provided in the first introductory
paragraph hereto.
Inspectors: Has the meaning provided in Section 3(n) hereof.
Issue Date: The date on which the Warrants were sold to the Initial
Purchaser pursuant to the Purchase Agreement.
NASD: Has the meaning provided in Section 3(p) hereof.
Participant: Has the meaning provided in Section 5(a) hereof.
Persons: An individual, trustee, corporation, partnership, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, union, business association, firm or other legal
entity.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Warrant Shares covered by such Registration Statement including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second introductory
paragraph hereto.
Records: Has the meaning provided in Section 3(n) hereof.
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Registration Statement: Any registration statement of the Company,
including that covers any of the Warrant Shares 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 or deemed to be incorporated by reference
in such registration statement.
Rule 144(k): Rule 144(k) promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Senior Debentures: Has the meaning provided in the second introductory
paragraph.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Registration: Has the meaning provided in Section 2(a) hereof.
Underwritten registration or underwritten offering: A registration in which
securities of the Company are sold to an underwriter for reoffering to the
public.
Units: Has the meaning provided in the second paragraph hereto.
Warrant Certificates: Means the Warrant Certificates as provided in the
Warrant Agreement.
Warrant Shares: Has the meaning provided in the second introductory
paragraph hereto.
Warrants: Has the meaning provided in the second introductory paragraph
hereto.
2. Shelf Registration
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(a) Shelf Registration. The Company shall file with the SEC no later than
the Filing Date a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Warrant Shares (the
"Shelf Registration"). The Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Warrant Shares for resale by
Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Company shall not permit
any securities other than the Warrant Shares to be included in the Shelf
Registration.
The Company shall use its best efforts to cause the Shelf Registration to
be declared effective under the Securities Act by the Effectiveness Date and to
keep the Shelf Registration continuously effective under the Securities Act
until the date which is two years from the Issue Date (the "Effectiveness
Period"), subject to extension pursuant to the last paragraph of Section 3
hereof, or such shorter period ending when all the Warrant Shares covered by the
Shelf Registration have been sold in the manner set forth and as contemplated in
the Shelf Registration or such Warrant Shares become eligible for resale without
volume restrictions pursuant to Rule 144(k) under the Securities Act.
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period (other than
because of the sale of all of the securities registered thereunder), the Company
shall use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof.
(c) Supplements and Amendments. The Company shall promptly supplement and
amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested for
such purpose by the Holders of a majority of the Warrant Shares covered by such
Registration Statement.
3. Registration Procedures
In connection with the filing of any Registration Statement pursuant to
Section 2 hereof, the Company shall effect such registration(s) to permit the
sale of the securities covered thereby in accordance with the intended method or
methods of disposition thereof, and pursuant thereto and in connection with any
Registration Statement filed by the Company hereunder, the Company shall:
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(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement as prescribed by Section 2 hereof, and use its best
efforts to cause such Registration Statement to become effective and remain
effective as provided herein; provided, however, that, the Company shall,
if requested in writing, furnish to and afford the Holders of the Warrant
Shares covered by such Registration Statement and their counsel, a
reasonable opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least three
business days prior to such filing). The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an opportunity to
review prior to the filing of such document under the immediately preceding
sentence, if the Holders of a majority of the Warrant Shares covered by
such Registration Statement or their counsel, shall object directly to the
Company in writing, which writing shall set forth a reasonable basis for
such objection.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period,
cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and comply with the provisions of the Securities
Act and the Exchange Act applicable to it with respect to the disposition
of all securities covered by such Registration Statement as so amended or
in such Prospectus as so supplemented; the Company shall be deemed not to
have used its best efforts to keep a Registration Statement effective
during the Effectiveness Period if it voluntarily takes any action that
would result in selling Holders of the Warrant Shares covered thereby not
being able to sell such Warrant Shares during that period unless such
action is required by applicable law or unless the Company complies with
this Agreement, including, without limitation, the provisions of paragraph
3(j) hereof and the last paragraph of this Section 3.
(c) Notify the selling Holders of Warrant Shares and their counsel
promptly (but in any event within two business days), and confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole
expense of the Company, one
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conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or
deemed to be incorporated by reference and exhibits), (ii) of the issuance
by the SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement, (iv) of the happen ing of any
event, the existence of any condition or any information becoming known
that makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the
making of any changes in or amendments or supplements to such Registration
Statement, Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (v) of the determination by the Company
that a post-effective amendment to a Registration Statement would be
appropriate.
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Warrant
Shares for sale in any jurisdiction, and, if any such order is issued, to
use its best efforts to obtain the withdrawal of any such order at the
earliest possible moment.
(e) Furnish to each selling Holder of Warrant Shares who so requests
and to such Holder's counsel, at the sole expense of the Company, one
conformed copy of the Registration Statement or Registration Statements and
each post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(f) Deliver to each selling Holder of Warrant Shares and such Holder's
counsel, at the sole expense of the Company, as many copies of the
Prospectus or Prospectuses (including each form of preliminary Prospectus)
and each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably
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request; and, subject to the last paragraph of this Section 3, the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Warrant Shares, in
connection with the offering and sale of the Warrant Shares covered by such
Prospectus and any amendment or supplement thereto.
(g) Prior to any public offering of Warrant Shares to use its best
efforts to register or qualify such Warrant Shares (and to cooperate with
selling Holders of Warrant Shares and their counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Warrant Shares) for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States
as any selling Holder, reason ably request in writing; provided, however,
that where Warrant Shares are offered other than through an underwritten
offering, the Company agrees to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 3(g); keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Warrant Shares covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that
would subject it to general service of process in any such jurisdiction
where it is not then so subject or (C) subject itself to taxation in excess
of a nominal dollar amount in any such jurisdiction where it is not then so
subject.
(h) Cooperate with the selling Holders of Warrant Shares, to
facilitate the timely preparation and delivery of certificates representing
Warrant Shares to be sold, which cer tificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with The
Depository Trust Company; and enable such Warrant Shares to be in such
denominations and registered in such names as the Holders may reasonably
request.
(i) Use its best efforts to cause the Warrant Shares covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or author ities as may be necessary to enable the
Holders thereof, to dispose of such Warrant Shares, except as may be
required solely as a consequence of the nature of a selling Holder's
business, in which case the Company will cooperate in all reasonable
respects with the filing of such Registration Statement and the granting of
such approvals.
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(j) Upon the occurrence of any event contemplated by paragraph
3(c)(iv) or 3(c)(v) hereof, as promptly as practicable prepare and (subject
to Section 3(a) hereof) file with the SEC, at the sole expense of the
Company, a supplement or post-effective amend ment to the Registration
Statement or a supplement to the related Prospectus or any docu ment
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers
of the Warrant Shares being sold thereunder any such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, that this Section 3(j) shall not be deemed to require
the Company to disclose any information that, in the good faith opinion of
the management of the Company, is not yet required to be disclosed and
would not be in the best interests of the Company to disclose, so long as
the Company complies with all applicable laws and government regulations
and the last paragraph of this Section 3.
(k) Prior to the effective date of the first Registration Statement
relating to the Warrant Shares, provide a CUSIP number for the Warrant
Shares.
(l) Cause all Warrant Shares covered by the Registration Statement to
be listed or admitted for trading in each securities exchange (including,
but not limited to, The American Stock Exchange, Inc.) or quotation system
on which the Company's common stock is then listed or admitted;
(m) In connection with any underwritten offering of Warrant Shares
pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of securities similar to the Warrant
Certificates and take all such other actions as are reasonably requested by
the managing underwriter or underwriters in order to facilitate the
registration or the disposition of such Warrant Shares and, in such
connection, (i) make such representations and warranties to, and covenants
with, the underwriters with respect to the business of the Company and its
respective subsidiaries and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by Company to underwriters
in underwritten offerings of securities similar to the Warrant
Certificates, and confirm the same in writing if and when requested; (ii)
obtain the written opinion of counsel to the Company and written updates
thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily
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covered in opinions requested in underwritten offerings of securities
similar to the Warrant Certificates and such other matters as may be
reasonably requested by the managing underwriter or underwriters; (iii)
obtain "cold comfort" letters and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of any of the Company or of any business
acquired by any of the Company for which financial statements and financial
data are, or are required to be, included or incorporated by reference in
the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings of securities similar to the Warrant Certificates
and such other matters as reasonably requested by the managing underwriter
or underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 5 hereof (or such other
provisions and procedures acceptable to Holders of a majority of Warrant
Shares covered by such Registration Statement and the managing underwriter
or underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under
such underwriting agreement, or as and to the extent required thereunder.
(n) Make available for inspection by any selling Holder of such
Warrant Shares being sold and any attorney, accountant or other agent
retained by any such selling Holder (collectively, the "Inspectors"), at
the offices where normally kept, during reasonable busi ness hours, all
financial and other records, pertinent corporate documents and instruments
of the Company and its subsidiaries (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees
of the Company and its respective subsidiaries to make available for
inspection all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records which the Company
determines, in good faith, to be confidential and any Records which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such
information is, in the opinion of counsel (a copy of which shall be
delivered to the Company) for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising
out of, based upon, relating to,
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or involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) the information in such Records has been made
generally available to the public. Each selling Holder of Warrant Shares
will be required to agree that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Company
unless and until such information is generally available to the public.
Each selling Holder of such Warrant Shares will be required to further
agree that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Company and allow
the Company to undertake appropriate action to prevent disclosure of the
Records deemed confidential at the Company's sole expense.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Warrant Shares are
sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(p) Cooperate with each seller of Warrant Shares covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Warrant Shares and their respective counsel in
connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
(q) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Warrant Shares covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Warrant Shares as to which any
Registration Statement is being effected to furnish to the Company such
information regarding such seller and the distribution of such Warrant Shares as
the Company may, from time to time, reasonably request. The Company may exclude
from such Registration Statement the Warrant Shares of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the
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Company all information required to be disclosed in order to make the
information previously furnished to the Company by such seller not materially
misleading.
Each Holder of Warrant Shares agrees by acquisition of such Warrant Shares
that, upon actual receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) or 3(c)(v)
hereof, such Holder will forthwith discontinue disposition of such Warrant
Shares covered by such Registration Statement or Prospectus to be sold by such
Holder, until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(j) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements
thereto. In the event the Company shall give any such notice, each of the
Effectiveness Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Warrant Shares covered by such Registration Statement
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 3(j) hereof or (y) the Advice. In the event the Company
does not give any such notice within five business days, each Holder shall
return such Registration Statement or Prospectus to the Company or destroy all
copies of such Registration Statement or Prospectus; and if so requested by the
Company, shall certify that all copies of the Registration Statement or
Prospectus were destroyed.
4. Registration Expenses. All fees and expenses incident to the performance
of or compliance with this Agreement by the Company shall be borne by the
Company whether or not the Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings with the SEC, (B) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (C) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of the Company's counsel in connection with Blue Sky
qualifications of the Warrant Shares and determination of the eligibility of the
Warrant Shares for investment under the laws of such jurisdictions where the
holders of Warrant Shares are located, (ii) printing expenses, including,
without limitation, expenses of printing certificates for Warrant Shares in a
form eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is requested by Holders of a
majority of the Warrant Shares or the managing underwriter or underwriters, if
any, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) fees and disbursements of all
independent certified public accountants referred to in Section 3(m)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance
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by or incident to such performance), (vi) rating agency fees, if any, (vii)
Securities Act liability insurance, if the Company desires such insurance,
(viii) fees and expenses of all other Persons retained by the Company, (ix)
internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees of the Company performing legal or
accounting duties), (x) the expense of any annual audit, (ix) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange or any inter-dealer quotation system, if
applicable, and (xii) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, securities
sales agreements, indentures and any other documents necessary in order to
comply with this Agreement.
5. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder of Warrant Shares offered pursuant to a Registration Statement, the
affiliates, directors, officers, agents, representatives and employees of each
such Person or its affiliates, and each other Person, if any, who controls any
such Person or its affiliates within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant") from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused by,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement pursuant to which the
offering of such Warrant Shares is registered (or any amendment thereto) or
related Prospectus (or any amendments or supplements thereto) or any related
preliminary prospectus, or caused by, arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company will not be required to indemnify a Participant if (i) such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of such Participant expressly for use therein or (ii) if such Participant sold
to the person asserting the claim the Warrant Shares which are the subject of
such claim and such untrue statement or omission or alleged untrue statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and such Participant failed to deliver or provide a copy of the
Prospectus (as amended or supplemented) to such Person with or prior to the
confirmation of the sale of such Warrant Shares sold to such Person if required
by applicable laws, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of
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noncompliance by the Company with Section 3 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify and
hold harmless the Company, its respective directors, officers, agents,
representatives, employees and each Person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each Participant,
but only (i) with reference to information furnished to the Company in writing
by or on behalf of such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus or (ii) with respect to any untrue statement or representation made
by such Participant in writing to the Company.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person shall have the right to retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may reasonably
designate in such proceeding and shall pay the fees and expenses actually
incurred by such counsel related to such proceeding; provided, however, that the
failure to so notify the Indemnifying Person shall not relieve it of any
obligation or liability which it may have hereunder or otherwise (unless and
only to the extent that such failure results in the loss or compromise of any
material rights or defenses by the Indemnifying Person). In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indem nifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person shall
have failed within a reasonable period of time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and, in the reasonable judgment of the
Indemnified Person, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that, unless there exists a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any one such proceeding, be
liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed promptly as they are incurred. Any such separate
firm for the Participants and such control Persons of Participants shall be
designated in writing by Participants who sold a majority in interest of Warrant
Shares sold by all such Participants and any
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such separate firm for the Company, its directors, their officers and such
control Persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent (which shall not be unreasonably
denied), but if settled with such consent or if there be a final non-appealable
judgment for the plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, the Indemnifying Person agrees to
indemnify and hold harmless each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which any Indemni fied Person is or could have been a party, and indemnity could
have been sought hereunder by such Indemnified Person, unless such settlement
(A) includes an unconditional written release of such Indemnified Person, in
form and substance reasonably satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding, (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of any Indemnified Person and (C) does not impose any
non-monetary relief applicable to the Indemnified Person.
(d) If the indemnification provided for in Sections 5(a) and 5(b) hereof is
for any reason unavailable to, or insufficient to hold harmless, an Indemnified
Person in respect of any losses, claims, damages or liabilities referred to
therein, then each Indemnifying Person under such paragraphs, in lieu of
indemnifying such Indemnified Person thereunder and in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other from the offering of the Preferred
Stock or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
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(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purposes) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Warrant Shares exceeds
the amount of any damages that such Participant has otherwise been required to
pay or has paid by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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.
(f) The indemnity and contribution agreements contained in this Section 5
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
6. Rule 144. The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at any
time the Company is not required to file such reports, it will, upon the request
of any Holder of Warrant Shares, make publicly available annual reports and such
information, documents and other reports of the type specified in Sections 13
and 15(d) of the Exchange Act. The Company further covenants for so long as any
Warrant Shares remain outstanding, to make available to any Holder or beneficial
owner of Warrant Shares in connection with any sale thereof and any prospective
purchaser of such Warrant Shares from such Holder or beneficial owner the
information required by the Securities Act in order to permit resales of such
Warrant Shares pursuant to Rule 144.
7. Underwritten Registrations. If any of the Warrant Shares covered by any
Shelf Registration are to be sold in an underwritten offering, the investment
banker or investment bankers and manager or managers that will manage the
offering will be selected by the Holders of a majority of such Warrant Shares
included in such offering and reasonably acceptable to the Company.
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No Holder of Warrant Shares may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Warrant Shares on the basis provided in any underwriting arrangements approved
by the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
8. Miscellaneous. (a) No Inconsistent Agreements. The Company has not
entered, as of the date hereof, and the Company shall not, after the date of
this Agreement, enter into any agreement with respect to any of its securities
that is inconsistent with the rights granted to the Holders of Warrant Shares in
this Agreement or otherwise conflicts with the provisions hereof. The Company
has not entered and none of the Company will enter into any agreement with
respect to any of its securities which will grant to any Person piggy-back
registration rights with respect to a Registration Statement.
(b) Adjustments Affecting Warrant Shares. The Company shall not, directly
or indirectly, take any action with respect to the Warrant Shares as a class
that would adversely affect the ability of the Holders of Warrant Shares to
include such Warrant Shares in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of the Holders of not less than a majority of the then outstanding
Warrant Shares. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Warrant Shares whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Warrant Shares may be
given by Holders of at least a majority of the Warrant Shares being sold by such
Holders pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, next-day air courier or facsimile:
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1. if to a Holder of the Warrant Shares, at the most current address
of such Holder, set forth on the records of the registrar under the
Indenture, with a copy in like manner to the Initial Purchasers as follows:
NatWest Capital Markets Limited
000 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxx
with a copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
2. if to the Initial Purchasers, at the addresses specified in Section
10(d)(1);
3. if to the Company, as follows:
COMFORCE Corporation
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
with a copy to:
Doepken, Keevican & Xxxxx
000 Xxxxx Xxxxxx
58th Floor, USX Tower
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
-17-
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto;
provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign holds Registerable Preferred Stock.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
-18-
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first written above.
Company:
COMFORCE CORPORATION
By:__________________________
Name:
Title:
-19-
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written:
NATWEST CAPITAL MARKETS LIMITED
By:__________________________________
Name:
Title:
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