EXHIBIT 4.2
ON ASSIGNMENT, INC.
LIMITED REGISTRATION RIGHTS AGREEMENT
THIS LIMITED REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is made and
entered into as of April 19, 2002, by and among ON ASSIGNMENT, INC., a Delaware
corporation (the "COMPANY"), J. Xxxxxxx XxXxxxx, X.X. Xxxxxxx & Sons, as
Custodian for J. Xxxxxxx XxXxxxx and Xxxxxxx Xxxx (collectively, the
"STOCKHOLDERS").
RECITALS
A. The Company, ON ASSIGNMENT ACQUISITION CORP., a Delaware corporation
and wholly-owned subsidiary of the Company ("SUB"), HEALTH PERSONNEL OPTIONS
CORPORATION, an Ohio corporation ("HPOC"), and certain stockholders of HPOC have
entered into an Agreement and Plan of Merger, dated as of March 27, 2002 (the
"MERGER AGREEMENT"), pursuant to which HPOC will be merged into Sub (the
"TRANSACTION"). As a result of the Transaction, the Stockholders will receive
317,436 shares (the "SHARES") of common stock of the Company as part of the
merger consideration. Certain of the Shares (the "Escrow Shares") will be
deposited into the Escrow Amount (as defined in the Merger Agreement). The
Shares will be "restricted securities" as defined in Rule 144 (defined below).
B. The Company has agreed to provide the Stockholders with certain
registration rights solely for the purpose of permitting the sale of the Escrow
Shares to satisfy claims arising out of or in connection with the
indemnification obligations of the Stockholders arising out of or in connection
with Article VIII of the Merger Agreement ("ARTICLE VIII") and pursuant to the
terms of that certain Escrow Agreement, dated concurrently herewith (the "ESCROW
AGREEMENT"), among Parent, Xxxxx X. Xxxxxxxx in his capacity as Stockholder
Representative and the Escrow Agent named therein (the "ESCROW AGENT").
C. Notwithstanding anything to the contrary contained herein, the
Stockholders acknowledge that except for any sale of the Escrow Shares to
satisfy claims arising under Article VIII and the terms of the Escrow Agreement,
all Shares remain subject to the terms and restrictions set forth in those
certain Lock-up Agreements, dated concurrently herewith, entered into by each of
the Stockholders and the Company (the "LOCK-UP AGREEMENTS").
AGREEMENT
The parties, intending to be legally bound, agree as follows:
SECTION 1: REGISTRATION.
1.1 REGISTRATION SHARES. As used in this Agreement, "Registrable Shares"
means the Escrow Shares and any securities issued or issuable in respect thereof
as a result of any stock split, stock dividend, share exchange, merger,
consolidation or similar recapitalization.
1.2 REGISTRATION.
(a) The Company and the Stockholders agree that the Company will
register the Registrable Shares pursuant to the registration statement on Form
S-3 (the "REGISTRATION STATEMENT") to be filed by the Company pursuant to the
terms of that certain Registration Rights Agreement, dated concurrently
herewith, between the Company, and the former HPOC stockholders named therein
and the Stockholder Representative named therein.
(b) Each Stockholder shall furnish such information as the Company
may reasonably request in connection with the preparation of the Registration
Statement. The Escrow Shares registered with the SEC pursuant to the terms of
this Agreement may only be sold under the Registration Statement to satisfy any
claims arising out of or in connection with Article VIII and the terms of the
Escrow Agreement. Any Escrow Shares that are not sold to satisfy any such claims
may not be sold by the Stockholders under the Registration Statement for any
other purpose and shall continue to be subject to all of the terms, restrictions
and conditions of the Lock-up Agreements.
(c) Before filing the Registration Statement, or any amendment
thereto, the Company shall furnish to the Stockholders copies of all documents
proposed to be filed, which documents shall be subject to review and reasonable
approval of the Stockholders; provided however, that if a Stockholder fails to
respond to the Company within 5 days of receipt of such documents, such
Stockholder shall be deemed to have approved such documents.
1.3 LIMITED WAIVER OF LOCK-UP RESTRICTIONS. If the Stockholder
Representative agrees to satisfy any claims arising out of or in connection with
Article VIII by selling the Escrow Shares, the Company agrees to waive its right
to the restrictions regarding the Shares set forth in the Lock-up Agreements
only with respect to the Escrow Shares necessary to satisfy such claims pursuant
to the terms of the Escrow Agreement.
SECTION 2: THE COMPANY'S OBLIGATIONS
In connection with the Registration Statement, the Company shall:
2.1 COPIES OF OFFERING DOCUMENTS. Furnish to the Stockholders such
numbers of copies of the Registration Statement, prospectus, and any amendments
and supplements thereto, in conformity with the requirements of the Securities
Act of 1933, as amended (the "1933 ACT"), including all rules and regulations
promulgated thereunder, and such other documents as the Stockholders may
reasonably request.
2.2 MISLEADING PROSPECTUS. Promptly notify the Stockholders, at any time
when the prospectus covered by the Registration Statement is required to be
delivered under the 1933 Act, upon the Company becoming aware that the
prospectus included in the 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, and immediately
thereafter use its reasonable best efforts to prepare and file with the SEC and
furnish to the Stockholders a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus shall
not include an
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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 not misleading in
the light of the circumstances under which they are made.
SECTION 3: THE STOCKHOLDERS' OBLIGATIONS
In connection with the Registration Statement, the Stockholders shall:
3.1 OTHER DOCUMENTS AND INFORMATION. Complete, execute, acknowledge
and/or deliver such questionnaires and other documents, certificates and
instruments as are reasonably required by the Company or are otherwise necessary
in connection with the registration and offering. The Stockholders shall
promptly provide to the Company such information concerning the Stockholders,
their ownership of the Company's securities, the intended method of distribution
and such other information as may be required by applicable law or regulation or
as may be reasonably requested by the Company.
3.2 CESSATION OF OFFERING. Upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 2.2, immediately
discontinue disposition of the Escrow Shares pursuant to the Registration
Statement covering such Shares until the Stockholders' receipt of the copies of
the supplemented or amended prospectus contemplated by Section 2.2.
3.3 MATERIAL NON-PUBLIC INFORMATION. The Stockholders agree to treat the
receipt of notice from the Company pursuant to Section 2.2 or 4.1 and the
content of such notice, as material non-public information, and neither the
Stockholders nor their agents or principals shall trade the Company securities
or disclose the contents of such notice or that the Stockholders have received
such notice prior to the end of the second trading day after the later of (i)
the widespread public dissemination of the happening of the event subject to the
notice and (ii) the filing with the SEC of the supplemented or amended
prospectus contemplated by Section 2.2 or the filing of the Registration
Statement or resumption of the right to make sales pursuant to the Registration
Statement, as contemplated by Section 4.1.
SECTION 4: EXPENSES AND INDEMNIFICATION.
4.1 OTHER TRANSACTIONS. The Company shall not be obligated to effect a
registration pursuant to Section 1, or to file any amendment or supplement
thereto, and may suspend the Stockholders' rights to make sales pursuant to an
effective registration pursuant to Section 1, at any time when the Company
provides to the Stockholders a certificate signed by the President of the
Company that in the good faith judgment of its Board of Directors, reasonably
believes that the filing thereof at the time requested, or the offering of
securities pursuant thereto, would (i) materially and adversely affect a pending
or proposed acquisition, merger, recapitalization, consolidation, reorganization
or similar transaction, or negotiations, discussions or pending proposals
related thereto, or (ii) be seriously detrimental to the Company and its
stockholders, in which event (under clause (i) or (ii) above) the Company's sole
relief from its registration obligations is the right to defer filing of the
Registration Statement (or to suspend the Stockholders' rights to make sales
pursuant to the Registration Statement if it is already
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effective) for a period of not more than 90 days; provided, however, that the
Company shall not utilize the right described in this Section 4.1 more than once
in any twelve-month period.
4.2 CERTAIN FEES AND COMMISSIONS. The Company shall pay all expenses
incurred in connection with the Registration Statement, including without
limitation all registration, filing and qualification fees, printing expenses,
fees and disbursements of counsel for the Company, except that the Company shall
not be required to pay brokers' or underwriters' fees, discounts or commissions
relating to the Registrable Shares or fees of a separate legal counsel of a
Stockholder.
4.3 OTHER EXPENSES. The Company shall pay all registration and filing
fees attributable to the Registrable Shares and the listing fee payable to the
Nasdaq National Market.
4.4 INDEMNIFICATION. In the event any Registrable Shares are included in
the Registration Statement under Section 1:
(a) INDEMNIFICATION BY THE COMPANY. To the extent permitted by law,
the Company will indemnify and hold harmless the Stockholders, their heirs,
successors and permitted assigns, their officers and directors, any underwriter
(as defined in the 0000 Xxx) for the Stockholders (if selected by the Company or
approved by the Company), and each person, if any, who controls any Stockholder
or such underwriter within the meaning of the 1933 Act or the 1934 Act, against
any losses, claims, damages, liabilities or actions (joint or several) to which
they may become subject under the 1933 Act, the 1934 Act or other federal or
state law, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including
any preliminary prospectus (not prohibited by Section 3.2) or final prospectus
contained therein or any amendments or supplements thereto, or arising out of or
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the context in which made, not misleading; and the Company will reimburse the
Stockholders, their heirs, successors and permitted assigns, their officers and
directors, any underwriter (if selected by the Company or approved by the
Company) or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnification
and other rights provided for in this Section 4.3(a) shall not apply (i) to any
such loss, claim, damage, liability, or action insofar as it arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, preliminary prospectus or
final prospectus or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Stockholders or (ii) if the person asserting any
such loss, claim, damage, liability or action who purchased the Registrable
Shares that are the subject thereof did not receive a copy of the final
prospectus (or the final prospectus as amended or supplemented) at or prior to
the written confirmation of the sale of such Registrable Shares to such person
and the Company provided such final or supplemental prospectus to the
Stockholders. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Stockholders, underwriter or
controlling person and shall survive the transfer of the Registrable Shares by
the Stockholders.
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(b) INDEMNIFICATION BY STOCKHOLDERS. To the extent permitted by law,
each Stockholder, severally and not jointly, will indemnify and hold harmless
the Company, its successors and assigns, its officers and directors, any
underwriter (as defined in the 0000 Xxx) with respect to the Registrable Shares,
and each person, if any, who controls the Company or any such underwriter within
the meaning of the 1933 Act or the 1934 Act, against any losses, claims,
damages, liabilities or actions (joint or several) to which they may become
subject under the 1933 Act, the 1934 Act or other federal or state law, arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arising out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the context in which made, not
misleading; provided that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished by such Stockholder expressly for use in such
registration by such Stockholder, or (ii) the failure of a Stockholder with
respect to the Registrable Shares held by such Stockholders at or prior to the
written confirmation of the sale of the Registrable Shares held by such
Stockholder to send or arrange delivery of a copy of a prospectus (or the
prospectus as amended or supplemented) timely provided to the Stockholders by
the Company to the person asserting any such loss, claim, damage, liability or
action who purchased the Registrable Shares that are the subject thereof. Such
Stockholders will reimburse the Company and each such successor, assign,
officer, director, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any such successor, assign, officer, director,
underwriter or controlling person and shall survive the transfer of the
Registrable Shares by the Stockholder.
(c) INDEMNIFICATION PROCEDURES. Promptly after receipt by a person
who may be entitled to indemnification under this Section 4.3 (an "indemnified
party") of notice of the commencement of any action (including any governmental
action) for which indemnification may be available under this Section 4.3, such
indemnified party will, if a claim in respect thereof is to be made against any
person who must provide indemnification under this Section 4.3 (an "indemnifying
party"), deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel (and the
reasonable fees of such counsel shall be paid by the indemnifying party) and
assume its own defense if (i) the retention of such counsel has been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to promptly assume the defense and employ
experienced counsel reasonably acceptable to the indemnified party after the
indemnifying party has received the notice of the indemnification matter from
the indemnified party, or (iii) the named parties to any such action include
both the indemnified party and the indemnifying party, and the representation of
both parties by the same counsel would be inappropriate due to a conflict of
interest between them. It is understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm
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of attorneys for all indemnified parties unless the indemnified parties in good
faith conclude and are advised by their counsel that there is an actual or
potential conflict of interest among the indemnified parties. No indemnification
provided for in Section 4.3(a) or Section 4.3(b) shall be available to any party
who shall fail to give notice as provided in this Section 4.3(c) to the extent
that the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice.
(d) CONTRIBUTION. If the indemnification otherwise provided for in
this Section 4.3 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense as well as any other
relevant equitable considerations. The relevant fault of the indemnifying party
and the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount any Stockholder
shall be obligated to contribute pursuant to this Section 4(d) shall be limited
to an amount equal to the proceeds to such Stockholder of the Registrable Shares
sold pursuant to the Registration Statement which gives rise to such obligation
to contribute (less the aggregate amount of any damages which the Stockholder
has otherwise been required to pay in respect of such loss, claim, damage,
liability or action or any substantially similar loss, claim, damage, liability
or action arising from the sale of such Registrable Shares).
SECTION 5: OTHER PROVISIONS
5.1 ATTORNEYS' FEES. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
5.2 NOTICES. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth below (or to such other address
or facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto).
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If to the Company:
On Assignment, Inc.
00000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax: (000) 000-0000
If to the Stockholders, to such address or facsimile telephone number
set forth next to each respective Stockholder's name on the signature
page hereto (or to such other address or facsimile telephone number as
such party shall have specified in a written notice given to the other
parties hereto).
5.3 HEADINGS. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
5.4 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
5.5 GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).
5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon each of
the parties hereto and each of their respective permitted successors and
assigns, if any. The Stockholders may not assign their rights under this
Agreement without the express prior written consent of the Company.
5.7 WAIVER. No failure on the part of any person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy. No person shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
5.8 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of each of the parties hereto.
5.9 SEVERABILITY. In the event that any provision of this Agreement, or
the application of any such provision to any person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the
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application of such provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
5.10 PARTIES IN INTEREST. Except for the provisions of Section 4.4, none
of the provisions of this Agreement is intended to provide any rights or
remedies to any person other than the parties hereto and their respective
successors and assigns, if any.
5.11 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto relating to the registration and sale of the
Escrow Shares and supersedes all prior agreements and understandings among or
between any of the parties relating to the subject matter hereof, other than
Article VIII, the Lock-up Agreements and the Escrow Agreement; provided,
however, the Lock-up Agreements are modified only as specifically provided for
in this Agreement.
5.12 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement shall be brought against any of the parties hereto in any Federal or
state court located in the State of Delaware, and each party hereto hereby
consents to the jurisdiction of any such court (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
5.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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The parties hereto have caused this Agreement to be executed and
delivered as of the date first written above.
THE COMPANY
ON ASSIGNMENT, INC.,
a Delaware corporation
By:
-----------------------------------------
Xxx Xxxxxxxx
Chief Executive Officer
STOCKHOLDERS
--------------------------------------------
J. XXXXXXX XXXXXXX
Address: 000 Xxxxxxxxx Xx.
Xxxxxxxx, Xxxx 00000
Email: xxxxxxxx@xxxxx.xx.xxx
--------------------------------------------
XXXXXXX XXXX
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Email: xxxxx@xxxxx.xx.xxx
--------------------------------------------
X.X. XXXXXXX & SONS
CUSTODIAN FOR J. XXXXXXX XXXXXXX
Address: Xxxxx Xxxxxxxxx
X.X. Xxxxxxx & Sons, Inc.
000 X. 0xx Xx., Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
E-Mail: xxxxx.xxxxxxxxx@xxxxxxxxx.xxx
