EXHIBIT I
EXECUTION COPY
ALTERNATIVE RESOURCES CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is entered into as of
January 31, 2002, by and among Alternative Resources Corporation (the "COMPANY")
and Wynnchurch Capital Partners, L.P., a Delaware limited partnership and
Wynnchurch Capital Partners Canada, L.P., an Alberta, Canada limited partnership
(each, an "INVESTOR" and collectively, the "INVESTORS").
RECITALS
A. The Investors and the Company are parties to a Securities
Purchase Agreement, of even date herewith (the "PURCHASE AGREEMENT"), pursuant
to which, subject to the satisfaction of certain conditions, the Investors will
purchase from the Company (i) an aggregate of Ten Million Dollars ($10,000,000)
of 15% Secured Convertible Promissory Notes (the "NOTES"), which are convertible
into shares ("NOTE SHARES") of common stock, $0.01 par value per share ("COMMON
STOCK") of the Company; and (ii) warrants ("WARRANTS"), including the B-1
Warrant and the B-2 Warrant entitling the holder thereof to purchase up to an
aggregate of Eleven Million (11,000,000) shares of Common Stock (the "WARRANT
SHARES") upon the terms and conditions set forth in the Warrant.
B. To induce the Investors to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "SECURITIES
ACT"), and applicable state securities laws.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
Article I
REGISTRATION RIGHTS
1.1 DEFINITIONS. For the purposes of this Agreement:
(a) "FORM S-3" means such form under the Securities Act, as in
effect on the date hereof or any successor form under the Securities
Act;
(b) "HOLDER" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance
with Section 1.12 of this Agreement;
(c) "OTHER SHARES" means at any time those shares of Common
Stock of the Company that do not constitute Primary Shares or
Registrable Securities;
(d) "PRIMARY SHARES" means at any time the authorized but
unissued or previously issued shares of Common Stock held in the
Company's treasury;
(e) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act (including to
provide pursuant to Rule 415 under the Securities Act or any successor
rule the offering of securities on a continuous basis ("RULE 415")), and
the declaration or ordering of effectiveness of such registration
statement or document;
(f) "REGISTRABLE SECURITIES" means (i) the Note Shares issued
or issuable with respect to the Notes (without regard to any limitations
on conversion or exercise); (ii) the Warrant Shares issued or issuable
with respect to any of the Warrants (without regard to any limitations
on conversion or exercise); and (iii) any other shares of Common Stock
issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of,
the shares referred to in clauses (i) and (ii); PROVIDED, HOWEVER, that
the foregoing definition shall exclude in all cases any Registrable
Securities sold by a person in a transaction in which his or her rights
under this Agreement are not assigned. Notwithstanding the foregoing,
Common Stock or other securities shall only be treated as Registrable
Securities if and so long as they (A) have not been sold to or through a
broker or dealer or underwriter in a public securities transaction, or
(B) have not been sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section
4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such
sale or (C) are not eligible for sale pursuant to Rule 144 without being
subject to applicable volume and manner of sale limitations thereunder;
(g) "SEC" means the Securities and Exchange Commission.
(h) Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Purchase
Agreement.
1.2 REQUEST FOR REGISTRATION.
(a) If at any time, the Company shall receive a written request
from the Holders (the "INITIATING HOLDERS") of at least a majority of
the Registrable Securities then held by the Investors that the Company
file a registration statement under the Securities Act covering the
registration of Registrable Securities, then the Company shall, within
ten (10) days of the receipt thereof, give written notice of such
request to all remaining Holders. Each of the remaining Holders may
request, by written notice delivered to the Company within twenty (20)
days after the date of delivery of the Company's notice, that all or any
portion of their Registrable Securities be included in the registration.
Following the receipt of a request by the Initiating Holders, the
Company shall use all commercially reasonable efforts to file, as soon
as practicable and in any event within
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forty-five (45) days of the receipt of the request from the Initiating
Holders, the registration under the Securities Act of all Registrable
Securities which the Holders thereof have requested to be registered
under this paragraph (a), and to use all commercially reasonable efforts
to cause the registration statement to become effective as soon as
practicable thereafter.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to paragraph (a) and the Company shall include
such information in the written notice to the remaining Holders referred
to in paragraph (a). The underwriter will be selected by a majority in
interest of the Initiating Holders and shall be reasonably acceptable to
the Company. The right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and execution of an underwriting
agreement approved by the Initiating Holders and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and
such Holder) to the extent provided herein.
Notwithstanding the foregoing, if the Company shall furnish to the Holders
requesting a registration statement pursuant to this Section 1.2, a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be materially detrimental to
the Company (including to any material proposed or planned transaction involving
the Company) and its stockholders for such registration statement to be filed
and it is therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer such filing for a period of
not more than one hundred twenty (120) days after receipt of the request of the
Initiating Holders; PROVIDED, HOWEVER, that the Company may not utilize this
right more than once in any twelve month period and the Company shall use its
commercially reasonable efforts to effect the filing following the expiration of
the deferral period. Once a registration statement is effective for at least
thirty (30) days, the Company may suspend use of the registration statement if
it furnishes to the Holders covered by the registration statement a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, disclosure of material information to
the public necessary to allow sales under the registration statement would be
materially detrimental to the Company (including to any material proposed or
planned transaction involving the Company) and its stockholders and that it is
therefore essential that the use of the registration statement be suspended (a
"Permitted Blackout"); PROVIDED, HOWEVER, that either (i) if two or more such
Permitted Blackouts are imposed during any period of twelve (12) consecutive
months or (ii) the aggregate duration of all Permitted Blackouts during any
period of twelve (12) consecutive months exceeds thirty (30) business days, the
Holders shall have the rights indicated in (c)(i) below.
(c) The Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to this Section 1.2:
(i) If within the twelve (12) month prior to such
registration, the Company has effected one (1) registration
pursuant to this Section 1.2 and such registration has been
declared or ordered effective; PROVIDED, HOWEVER, that any
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such registration shall not count as a registration if: (x) the
Company has suspended use of a registration statement with
respect to Permitted Blackouts in excess of the limits set forth
in the proviso within the past 12 months or (y) the registration
request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered and
at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business, or prospects
of the Company from that known to the Holders at the time of
their request and have withdrawn the request with reasonable
promptness following disclosure by the Company of such material
adverse change or pursuant to the recommendation of the managing
underwriter; or (z) the Holders requesting registration do not
register and sell all Registrable Securities they have requested
to be registered in such registration for reasons other than
their voluntary decision not to do so.
(ii) during the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days
after the effective date of, a registration subject to Section
1.3 hereof; provided that during such period the Company is
actively employing in good faith its reasonable efforts to cause
such registration statement to become effective; or
(iii) if the Initiating Holders propose to dispose of
shares of Registrable Securities which at such time are eligible
to be registered on Form S-3 pursuant to a request made pursuant
to Section 1.4.
(d) With respect to any registration pursuant to this Section
1.2, the Company may include in such registration any Primary Shares and
Other Shares; PROVIDED, HOWEVER, that if any managing underwriter for
the public offering contemplated by such registration advises the
Company in writing that, in such firm's good faith opinion, the
inclusion of all Primary Shares and Other Shares proposed to be included
in such registration would adversely affect the offering and sale
(including pricing) of all such securities, then the number of
Registrable Securities, Primary Shares and Other Shares proposed to be
included in such registration shall be included in the following order:
(i) FIRST, the Registrable Securities held by Investors,
pro rata based upon the number of Registrable Securities owned by
each Investor at the time of such registration; and
(ii) SECOND, Primary Shares and any Other Shares.
1.3 COMPANY REGISTRATION. If (but without any obligation to do so)
the Company proposes to register Primary Shares under the Securities Act in
connection with the public offering of such securities solely for cash (other
than a registration relating solely to the sale of securities to participants in
a Company stock plan or a corporate reorganization or other transaction covered
by Rule 145 under the Securities Act, or any registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities held by the Holders), the
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Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within fifteen (15)
days after mailing of such notice by the Company, the Company shall, subject to
the provisions of Section 1.8, cause to be registered under the Securities Act
all of the Registrable Securities that each such Holder has requested to be
registered; PROVIDED, HOWEVER, that if any managing underwriter for the public
offering contemplated by such registration advises the Company in writing that,
in such firm's good faith opinion, the inclusion of all Registrable Securities
and Primary Shares or Other Shares proposed to be included in such registration
would adversely affect the offering and sale (including pricing) of all such
securities, then the number of Registrable Securities, Primary Shares and Other
Shares proposed to be included in such registration shall be included in the
following order:
(i) FIRST, the Primary Shares;
(ii) SECOND, the Registrable Securities held by the Investors
requesting registration, PRO RATA based upon the number of Registrable
Securities owned by each such Investor at the time of such registration;
and
(iii) THIRD, any Other Shares.
1.4 FORM S-3 REGISTRATION.
(a) In case the Company shall receive from one or more
Investors, a written request or requests that the Company effect a
registration on Form S-3 with respect to an aggregate of at least
500,000 shares of Registerable Securities (as may be appropriately
adjusted for stock splits, reverse stock splits, combinations or other
similar events) all or a part of the Registrable Securities owned by
such Investors, the Company will promptly give written notice of the
proposed registration to all other Holders, and as soon as practicable,
effect such registration as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Investors' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any
other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such
written notice from the Company; PROVIDED, HOWEVER, that the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to this Section 1.4: (i) if Form S-3 is not
available for such offering by the Holders; (ii) if the Company shall
furnish to the Holders a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be materially detrimental to the
Company (including to any material proposed or planned material
transaction involving the Company) and its stockholders for such Form
S-3 Registration to be effected at such time, in which event the Company
shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 120 days after receipt of the
request of the Holder or Holders under this Section 1.4(a); provided,
however, that the Company shall not utilize this right more than once in
any twelve-month period; (iii) if the Company has, within the twelve
(12) month period preceding the date of such request, already effected
two (2) registrations on Form S-3 for the Holders pursuant to this
Section 1.4; PROVIDED, HOWEVER, that a registration shall not count
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as a registration if: (x) the Company has exceeded its number or amount
of Permitted Blackouts in the prior twelve months or (y) the
registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered and
at the time of such withdrawal, the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company
from that known to the Holders at the time of their request and have
withdrawn the request with reasonable promptness following disclosure by
the Company of such material adverse change or pursuant to the
recommendation of the managing underwriter; or (z) the Holders
requesting registration do not register and sell all Registrable
Securities they have requested to be registered in such registration for
reasons other than their voluntary decision not to do so; iv) in any
particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; or
(v) during the period ending one hundred eighty (180) days after the
effective date of a registration statement subject to Section 1.2 or
Section 1.3. Once a registration statement has been made effective under
this Section for at least thirty (30) consecutive days, the Company may
suspend use of the registration statement if it furnishes to the Holders
covered by the registration statement a certificate signed by the
President of the Company stating that in the good faith judgment of the
Board of Directors of the Company that it is entitled to use a Permitted
Blackout.
(b) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as reasonably
practicable after receipt of the request or requests of the Holders.
Registrations effected pursuant to this Section 1.4 shall not be counted
as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively.
(c) With respect to any registration pursuant to this Section
1.4, the Company may include in such registration any Registrable
Securities held by the Investors or Other Shares; PROVIDED, HOWEVER,
that if any managing underwriter for the public offering contemplated by
such registration advises the Company in writing that, in such firm's
good faith opinion, the inclusion of all such shares proposed to be
included in such registration would adversely affect the offering and
sale (including pricing) of all such securities, then the number of
Registrable Securities and Other Shares proposed to be included in such
registration shall be included in the following order:
(i) FIRST, the Registrable Securities held by the
Investors requesting registration, pro rata based upon the number
of Registrable Securities owned by each such Investor at the time
of such registration; and
(ii) SECOND, any Other Shares.
1.5 OBLIGATIONS OF THE COMPANY. Whenever it is required under this
Article I to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably practicable:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially
reasonable efforts to cause such
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registration statement to become effective (provided that a reasonable
time before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the
counsel selected by the Holders of a majority of the Registrable
Securities covered by such registration statement copies of all such
documents proposed to be filed, which documents shall be subject to the
review and comment of such counsel), and, upon the request of the
Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one
hundred eighty (180) days or if earlier, until completion of the
distribution; PROVIDED HOWEVER, that such 180-day period shall be
extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request
of an underwriter of Common Stock (or other securities) of the Company.
(b) Use commercially reasonable efforts to prepare and file
with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered
by such registration statement for up to one hundred eighty (180) days.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, PROVIDED that the Company shall not
be required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in any
such states or jurisdictions unless the Company is already subject to
service in such jurisdiction and except as may be required by the Act.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, such
obligation to continue for one hundred twenty (120) days thereafter.
(g) Cause all such Registrable Securities registered hereunder
to be listed on each securities exchange or market on which similar
securities issued by the Company are then listed, and if not so listed
and to the extent the Company is eligible for listing, to
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be listed on a nationally recognized exchange or the NASDAQ National
Market ("NASDAQ") and, if listed on the NASDAQ, use its commercially
reasonable efforts to secure designation of all such Registrable
Securities covered by such registration statement as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 of the SEC
or, failing that, to use reasonable efforts to arrange for at least two
market makers to register as such with respect to such Registrable
Securities.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date
of such registration.
(i) Make available for inspection by any underwriter
participating in any disposition pursuant to such registration statement
(or if there is no underwriter, any Company "Affiliate" (as defined in
Rule 405 under the Securities Act) who is a seller of Registrable
Securities) and any attorney, accountant or other agent retained by any
such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to
supply all information reasonably requested by such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement.
(j) Permit any Holder of Registrable Securities, which Holder
in its sole and exclusive judgment, might be deemed to be an underwriter
or a controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require
the insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such Holder and its counsel should
be included.
(k) In the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending
the qualification of any Common Stock included in such registration
statement for sale in any jurisdiction, the Company shall use its
commercially reasonable efforts to promptly obtain the withdrawal of
such order.
(l) Obtain (i) a cold comfort letter from the Company's
independent public accountants in customary form and covering matters of
the type customarily covered by cold comfort letters as the underwriters
to such offering reasonably request, dated as of the date that such
Registrable Securities are being delivered to the underwriters for sale
in connection with a registration pursuant to this Agreement, if such
securities are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective, and (ii) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the
Holders participating in the registration of Registrable Securities.
1.6 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article I with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding
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itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be required to effect the registration
of such Holder's Registrable Securities or such other information as the Company
may reasonably request. The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.4 of this Agreement
if, as a result of the application of the preceding sentence, the number of
shares or the anticipated aggregate offering price of the Registrable Securities
to be included in the registration does not equal or exceed the number of shares
or the anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in Section
1.2(a) or Section 1.4(a), whichever is applicable.
1.7 EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Investors selected by them shall be
borne by the Company; PROVIDED, HOWEVER, that the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section
1.2, 1.3 or 1.4 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one demand registration pursuant to Section 1.2; PROVIDED
FURTHER, that if at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business, or prospects of the Company
from that known to the Holders at the time of their request and have withdrawn
the request with reasonable promptness following disclosure by the Company of
such material adverse change or pursuant to the recommendation of the managing
underwriter, then the Holders shall not be required to pay any of such expenses
and shall retain their rights pursuant to Section 1.2, 1.3 or 1.4, as the case
may be.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters pursuant to Section 1.2), and
then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company. If
the total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling Holder or in such other proportions as shall mutually be
agreed to by such selling Holders) but in no event shall the amount of
securities of the selling Holders included in the offering be reduced below
twenty five percent (25%) of the total amount of securities included in such
offering. For purposes of the preceding parenthetical concerning apportionment,
for any selling Holder which is a partnership or corporation, the partners,
retired partners and stockholders of such holder, or the estates and
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family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
Holder," and any pro-rata reduction with respect to such "selling Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "selling Holder," as defined in
this sentence.
1.9 DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Article I.
1.10 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Article I:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
against any losses, claims, damages, or liabilities (joint or several)
to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a "VIOLATION"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule
or regulation promulgated under the Securities Act, the Exchange Act or
any state securities law; and the Company will pay to each such Holder,
underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage or liability; provided, however,
that the indemnity agreement contained in this paragraph (a) shall not
apply to amounts paid in settlement of any such loss, claim, damage or
liability if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable to any Holder, underwriter or controlling person
for any such loss, claim, damage or liability to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use
in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Securities Act,
any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Securities Act, the Exchange Act
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or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of
or are based upon any Violation, in each case to the extent (and only
to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this paragraph
(b), in connection with investigating or defending any such loss,
claim, damage or liability; provided, however, that the indemnity
agreement contained in this paragraph (b) shall not apply to amounts
paid in settlement of any such loss, claim, damage or liability if
such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; provided, that in no event
shall any indemnity under this paragraph (b) exceed the net proceeds
from the offering received by such Holder, except in the case of
willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section
1.10, 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 noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
the representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 1.10, but the omission to so
deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than
under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 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 hereunder, 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 in connection
with the statements or omissions that resulted in such loss, liability,
claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by a
Holder under this paragraph (d) exceed the net proceeds from the
offering received by such Holder, except in the case of willful fraud by
such Holder. The relative fault of the indemnifying party and of the
indemnified party
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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.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Article
I, and otherwise.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, so long as the Company
remains subject to the periodic reporting requirements under Sections 13
or 15(d) of the Exchange Act;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary
to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of
SEC Rule 144 (at any time after ninety (90) days after the effective
date of the first registration statement filed by the Company), the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any
time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so
filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of
the SEC which permits the selling of any such securities without
registration or pursuant to such form.
1.12 ASSIGNMENT OF REGISTRATION RIGHTS. In the event a Holder desires
to assign all or a portion of the Registrable Securities owned by such Holder,
the rights to cause the Company to register Registrable Securities pursuant to
this Article 1 may be assigned (but only with all
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related obligations) by a Holder to a transferee or assignee of such securities
which (a) is a subsidiary, parent, general partner, limited partner, retired
partner, member, retired member or affiliate of a Holder, (b) is a Holder's
family member or trust for the benefit of an individual Holder, or (c) acquires
at least 500,000 Shares of the Registrable Securities (as may be appropriately
adjusted for stock splits, reverse stock splits, combinations or other similar
events); provided, however, (i) the transferor shall, within ten (10) days after
such transfer, furnish to the Company written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned, (ii) such transferee shall agree to be
subject to all restrictions set forth in this Agreement; and (iii) such
transferee is not a person deemed by the Board, in its reasonable judgment, to
be a competitor or potential competitor of the Company. Each Holder agrees to
cause any transferee of any shares of Registrable Securities to be bound by this
Section 1.12.
1.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities held by
the Investors, enter into any agreement with any holder or prospective holder of
any securities of the Company which would provide such holder or prospective
holder registration rights PARI PASSU or superior to those granted to the
Investors hereunder.
Article II
GENERAL
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.2 ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and this Agreement shall supersede and cancel all prior agreements between the
parties hereto with regard to the subject matter hereof.
2.3 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent via facsimile, e-mail,
overnight courier service or mailed by certified or registered mail, postage
prepaid, return receipt requested, addressed or sent in the manner set forth in
the Purchase Agreement.
2.4 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
2.5 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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2.7 WAIVERS AND AMENDMENTS. This Agreement may be waived, amended or
supplemented by the written consent of (a) the Company and (b) the Holders of at
least a majority of the Registrable Securities.
2.8 FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
2.9 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed in the State of Illinois. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts
located in the State of Illinois and the State Courts in the County of Xxxx in
the State of Illinois in any suit or proceeding based on or arising under this
Agreement or the transactions contemplated hereby and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
The Company irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. The Company further agrees that service
of process upon the Company mailed by the first class mail shall be deemed in
every respect effective service of process upon the Company in any suit or
proceeding arising hereunder. Nothing herein shall affect the Investors' right
to serve process in any other manner permitted by law. The parties hereto agree
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
2.10 SPECIFIC PERFORMANCE. The Company agrees and acknowledges that
any violation or breach of its covenants, agreements and undertakings contained
in this Agreement shall cause Investors' irreversible injury and, in addition to
any other right or remedy available to a party at law or in equity, an Investor
shall be entitled to enforcement by court injunction for specific performance of
the obligations of the other party hereunder. Notwithstanding the foregoing
sentence, nothing herein shall be construed as prohibiting a party from also
pursuing any other rights, remedies or defenses, for such breach or threatened
breach, including receiving damages and attorneys' fees. The election of any
remedy shall not be construed as a waiver on the part of any party of any rights
such party might otherwise have at law or in equity. Said rights and remedies
shall be cumulative.
2.11 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, EACH OF THE COMPANY AND INVESTORS HEREBY WAIVES AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR ANY OTHER INVESTMENT AGREEMENT OR THE SUBJECT MATTER HEREOF OR
THEREOF OR ANY OBLIGATION HEREUNDER OR THEREUNDER OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE HOLDERS OF SECURITIES OR THE
COMPANY OR ANY OF THEM IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. EACH OF THE INVESTORS AND THE COMPANY ACKNOWLEDGES THAT THE
PROVISIONS OF THIS SECTION 2.11 CONSTITUTE A MATERIAL
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INDUCEMENT UPON WHICH EACH OF THE INVESTORS AND THE COMPANY HAVE RELIED, ARE
RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT, AND EACH OF THE RELATED
AGREEMENTS. Investors or the Company may file an original counterpart or a copy
of this Section 2.11 with any court as written evidence of the consent of the
parties hereto to the waiver of their respective right to trial by jury
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereby have executed this Agreement as
of the date first above written.
COMPANY:
ALTERNATIVE RESOURCES CORPORATION
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Its: Chief Financial Officer
INVESTORS:
WYNNCHURCH CAPITAL PARTNERS, L.P.
By: /s/ Xxxx Xxxxxxxx
------------------------------
Its: President
WYNNCHURCH CAPITAL PARTNERS
CANADA, L.P.
By: /s/ Xxxx Xxxxxxxx
------------------------------
Its: President
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