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Exhibit 10.18
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
effective as of May 1, 1996 by and among on the one hand RemedyTemp, Inc., a
California corporation (the "Company"), and on the other hand, R. E. McDonough,
Sr., an adult individual ("McDonough"), Robert E. McDonough, Trustee of the
McDonough Survivor's Trust U/D/T dated 6/5/85 and Robert E. McDonough, Trustee
of the McDonough Exempt Marital Trust U/D/T dated 6/5/85 (collectively referred
to herein as the "McDonough Entities" or "Shareholders").
WHEREAS, it is a requirement of that certain Amended and
Restated Employment Agreement by and between the Company and McDonough dated as
of May 1, 1996 (the "Employment Agreement") and the desire of the parties hereto
to enter into this Agreement reflecting the terms upon which the Company grants
the McDonough Entities "piggyback" registration rights allowing the McDonough
Entities to sell their shares of common stock in the Company in any public
offering conducted by the Company subject to the limitations provided herein.
NOW, THEREFORE, on the basis of the preceding facts, and as a
material inducement and consideration to McDonough to enter into the Employment
Agreement and to perform his obligations thereunder, the parties to this
Agreement hereby agree to the following:
1. APPOINTMENT OF REPRESENTATIVE.
The McDonough Entities hereby appoints Robert E. McDonough,
Sr. (the "Representative") to represent the McDonough Entities with full power
and authority to make binding decisions on behalf of the McDonough Entities in
connection with any and all matters arising out of this Agreement. The McDonough
Entities agrees to be legally bound by all decisions made by the Representative
and acknowledge that the Company shall not be held liable for complying with any
directions of the Representative in connection with any and all matters arising
out of this Agreement.
2. DEFINITIONS.
For the purposes of this Agreement, the following words shall
have the meanings set forth below:
(a) "ADVERSE DISCLOSURE" means public disclosure of
material non-public information relating to a significant transaction, which
disclosure (i) would, in the good faith judgment of the Board, based as to legal
matters on the written opinion of outside counsel, be required to be made in any
registration statement filed with the Commission by the Company so that such
registration statement would not be materially misleading; (ii) would not, in
the good faith judgment of the Board, based as to legal matters on the written
opinion of outside counsel, be required to be made but for the filing of such a
registration statement; and (iii) would have a material adverse effect on the
Company's ability to complete such significant transaction, or the terms upon
which such significant transaction can be completed.
(b) The terms "REGISTER," "REGISTERED" and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement (other than on
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Form S-4 or S-8 or successor forms) in compliance with the Securities Act of
1933, as amended (the "Act").
(c) "REGISTRABLE STOCK" means (i) all shares of
common stock of the Company ("Common Stock") held by the McDonough Entities as
of the date hereof and (ii) any Common Stock issued as a dividend or other
distribution with respect to or in exchange for or in replacement of the shares
referenced above, provided, however, that each share of Registrable Stock shall
cease to be Registrable Stock when and if transferred to any person or entity
that is not a party to this Agreement.
3. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. At any time and from
time to time the Representative may request that the Company effect the
registration of Registrable Stock (a "DEMAND REGISTRATION"). Upon receipt of
such request, the Company shall use its best efforts to effect such Demand
Registration, subject to the limitations set forth in Section 3(b). the Company
may include in any Demand Registration any other shares of Common Stock
(including issued and outstanding shares of Common Stock as to which the holders
thereof have contracted with the Company for "piggyback" registration rights) so
long as the inclusion in such registration of such shares will not, in the
reasonable judgment of the managing underwriter(s), if any, interfere with the
successful marketing in accordance with the intended method of sale or other
disposition of all the Registrable Stock sought to be registered. If it is
determined as provided above that there will be such interference, the other
shares of Common Stock sought to be included shall be excluded to the extent
deemed appropriate by the managing underwriter(s).
(b) LIMITATIONS ON DEMAND REGISTRATIONS. Subject to
Section 3(d), the Company's obligation to effect a Demand Registration requested
by the Representative pursuant to Section 3(a) shall be subject to the following
limitations:
(i) Within any twelve month period, the
Company shall not be required to effect more than one Demand Registration on
Form S-1 (or a successor form) under the Securities Act or one Demand
Registrations on Form S-3 (or a successor form) under the Securities Act,
provided that no registration shall constitute a Demand Registration and count
against such limits unless and until all Registrable Stock sought to be included
in such Demand Registration are covered by a Registration that has been declared
effective by the Commission.
(ii) The Company shall not be required to
effect any Demand Registration of fewer than 2,000,000 shares of Registrable
Stock (as adjusted for any stock splits, reverse stock splits or similar events
which occur after the date hereof).
(iii) The Company may defer its obligations
to effect a Demand Registration if, in the good faith judgment of the Board,
filing a registration statement with the Commission at the time a Demand
Registration is requested would require Adverse Disclosure, provided that such
deferral may not extend beyond the earlier to occur of (1) 180 days after the
receipt by the Company of the Representative's request for such Demand
Registration, or (2) the date that filing of a registration statement with the
Commission would not require Adverse Disclosure therein.
(c) HOLDBACK. Subject to Section 3(d), if requested
(pursuant to a timely written notice) by the managing underwriter(s) of an
underwritten offering or the
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initial purchaser(s) in any offering being resold pursuant to Rule 144A under
the Securities Act of shares of Common Stock being issued and sold by the
Company, the Representative shall agree on the same terms applicable to officers
and directors of the Company not to effect any public sale or distribution of
any of the Registrable Stock for a period of up to 120 days following and 15
days prior to the date of the final prospectus contained in the registration
statement filed in connection with such offering, provided that this Section
3(c) shall not apply with respect to any offering (a) that excludes the
Representative notwithstanding the Representative's desire to participate
therein, and includes any other selling shareholders, or (b) if more than 30% of
the shares being sold in such offering are for the account of selling
shareholders other than the Representative.
(d) MINIMUM SALE AVAILABILITY. The limitations on the
Company's obligations to effect Demand Registrations set forth in Section
3(b)(iii) and the Representative's obligation under Section 3(c) shall not be
applicable to the extent that such limitations would result in the
Representative not having a period of at least 180 consecutive days within any
18-month period during which the Representative may sell Registrable Stock under
a Registration effected pursuant to the provisions hereof.
(e) SELECTION OF UNDERWRITER. Any Demand Registration
and related offering shall be managed by the Representative as follows: subject
to the reasonable approval of the Company, the Representative shall have the
power to select the managing underwriter(s) for such offering, and shall in
consultation with the managing underwriter(s) have the power to determine the
number of shares of Registrable Stock to be included in such registration and
offering (subject to applicable limitations set forth herein), the offering
price per Registrable Share, the underwriting discounts and commissions per
Registrable Share, the timing of the registration and related offering (subject
to applicable limitations set forth herein), counsel to the Representative, and
all other administrative matters related to the registration and related
offering. the Company shall enter into an underwriting agreement in customary
form with the underwriter(s) selected by the Representative and shall enter into
such other customary agreements and take all such other customary actions as the
Representative or its underwriter(s) may reasonably request to facilitate the
disposition of the Registrable Stock.
4. PIGGYBACK REGISTRATION.
(a) If the Company at any time proposes to register
any of its securities for sale, whether or not for its own account (other than a
registration relating to the sale of securities to employees of the Company
pursuant to a stock option, stock purchase or similar plan or a Rule 145
transaction or a registration on any form that does not permit secondary sales),
it shall give written notice (the "Company's Notice"), at its expense, to all
holders of Registrable Stock of its intention to do so at least twenty (20) days
prior to the filing of a registration statement with respect to such
registration with the Securities and Exchange Commission (the "Commission"). If
the Representative desires to dispose of all or a portion of such stock, the
Representative may request registration thereof in connection with the Company's
registration by delivering to the Company, within twenty (20) days after receipt
of the Company's Notice, written notice of such request (the "Piggyback Notice")
stating the number of shares of Registrable Stock to be registered for resale
(whether or not this Agreement has then been exercised in full or in part) by
the holders of the then outstanding Registrable Stock. The Company shall use its
best efforts to cause all shares of Registrable Stock specified in the Piggyback
Notice to be registered under the Act so as to permit the sale by such holders
of the shares so registered, subject to the limitations set forth in this
Agreement.
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(b) If the registration of which the Company gives
notice pursuant to this Agreement is for the purpose of permitting a disposition
of securities by the Company pursuant to a firm commitment underwritten
offering, the notice shall so state, and the Company shall have the right to
limit the aggregate size of the offering or the number of shares to be included
therein by stockholders of the Company if requested to do so by the managing
underwriter of the offering and only securities which are to be included in the
underwriting may be included in the registration.
(c) Whenever the number of shares which may be
registered pursuant to this Agreement is limited by the provisions hereof, (i)
the Company shall have priority as to sales over the holders of Registrable
Stock and each holder hereby agrees that it shall withdraw its securities from
such registration to the extent necessary to allow the Company to include all
the shares which the Company desires to sell for its own account to be included
within such registration, and (ii) subject to the foregoing clause (a) and
certain rights granted in that certain Master Agreement with Respect to the Sale
of Certain Shareholder's Interests by and between the Company, the McDonough
Entities, and other Shareholders of the Company dated February 6, 1996, the
holders of Registrable Stock shall have priority as to sales over any other
Company shareholders allowed to participate in such registration in order to
allow the holders of Registrable Stock to include as many shares as such holders
desire to be included in such registration. The holders of Registrable Stock
given rights herein shall share pro rata in the available portion of the
registration in question, such sharing to be based upon the number of shares of
such stock then held by each of such holders, respectively.
(d) The provisions of this Agreement shall not apply
to the initial public offering of the Company scheduled to occur prior to August
30, 1996; provided, however, the provisions of this Agreement shall apply to any
initial public offering conducted after such date.
5. DESIGNATION OF UNDERWRITER.
If any registration hereunder is an underwritten offering, the
Company shall have the right to designate the managing underwriter, and all
holders of Registrable Stock participating in the registration shall sell their
shares only pursuant to such underwriting.
6. REGISTRATION PROCEDURES.
(a) If and when the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of shares of Registrable Stock, the Company shall:
(i) prepare and file with the Commission a
registration statement with respect to such shares and use its best efforts to
cause such registration statement to become and remain effective for up to 120
days as provided herein;
(ii) prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectuses used in connection therewith as may be necessary to keep such
registration statement effective and current and to comply with the provisions
of the Act with respect to the sale or other disposition of all shares covered
by such registration statement, including such amendments and supplements as may
be necessary to reflect the intended method of disposition from time to time of
the
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holder or holders of such shares who have requested that any of their shares
be sold or otherwise disposed of in connection with the registration (the
"Prospective Sellers");
(iii) furnish to each Prospective Seller
such number of copies of each prospectus, including preliminary prospectuses, in
conformity with the requirements of the Act, and such other documents, as the
Prospective Seller may reasonably request in order to facilitate the public sale
or other disposition of the shares owned by it;
(iv) use its best efforts to register or
qualify the shares covered by such registration statement under such other
securities or blue sky or other applicable laws of such jurisdictions as each
Prospective Seller shall reasonably request to enable such seller to consummate
the public sale or other disposition of the shares owned by such seller;
provided that, the Company shall not be required in connection therewith or as a
election thereto to qualify to do business or to file a general consent to
service of process in any such jurisdiction;
(v) upon written request, furnish to each
Prospective Seller a signed counterpart, addressed to the Prospective Sellers
of: (x) an opinion of counsel for the Company, dated the effective date of the
registration statement; and (y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial statements
included in the registration statement; covering substantially the same matters
with respect to the registration statement (and the prospectus included therein)
and (in the case of the accountants' letter) with respect to the events
subsequent to the date of the financial statements, as are customarily covered
(at the time of such registration) in the opinions of issuers' counsel and in
accountants' letters delivered to the underwriters in connection with
underwritten public offerings of securities;
(vi) cause all such shares to be listed on
each securities exchange on which similar securities issued by the Company are
then listed;
(vii) provide a transfer agent and registrar
for all such shares not later than the effective date of such registration
statement;
(viii) enter into such customary agreements
(including an underwriting agreement) and take all such other customary actions
as the holders of all the shares being sold may reasonably request in order to
expedite or facilitate the disposition of such shares; and
(ix) make available for inspection by any
Prospective Seller, any underwriter participating in any disposition pursuant to
such registration statement, 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 and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with the preparation of such registration statement.
(b) Each Prospective Seller of such shares shall
furnish in writing to the Company such information as the Company may require
from the Prospective Seller for inclusion in the registration statement (and the
prospectus included therein).
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(c) The Prospective Sellers shall not (until further
notice) effect sales of the shares covered by the registration statement after
receipt of telegraphic, facsimile or written notice from the Company to suspend
sales to permit the Company to correct or update a registration statement or
prospectus.
7. EXPENSES OF REGISTRATION.
All expenses incurred in effecting any registration
requested pursuant to this Agreement hereof, including, all registration and
filing fees, printing expenses, expenses of compliance with blue sky laws, fees
and disbursements of counsel for the Company, expenses of any audits incidental
to or required by any such registration, and expenses of all marketing and
promotional efforts requested by the managing underwriter ("Registration
Expenses") shall be borne by the Company; provided, however, that each
Prospective Seller shall bear underwriting discounts or brokerage fees or
commissions relating to the sale of its shares. The Company shall pay the
attorneys' fees for one (1) counsel appointed by the Prospective Seller in each
registration.
8. INDEMNIFICATION.
(a) In the event of any registration of any of its
securities under the Act pursuant to this Agreement, the Company shall indemnify
and hold harmless each Holder joining in a registration of such securities, each
underwriter (as defined in the Act) and each controlling person of any Holder or
underwriter, if any (within the meaning of the Act), against any losses, claims,
damages or liabilities, joint or several (or actions in respect thereof), to
which such holder, underwriter or controlling person may be subject under the
Act, under any other statute or at common law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (1) any untrue statement (or alleged untrue statement) of any material fact
contained in any registration statement under which such securities were
registered under the Act, any preliminary prospectus or final prospectus
contained therein, or any summary prospectus issued in connection with any
securities being registered, or any amendment or supplement thereto, or (2) any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading ((1)
and (2) are each referred to hereafter as a "Violation"), and shall reimburse
each such holder, underwriter or controlling person for any legal or other
expenses reasonably incurred by such holder, underwriter or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
any holder, underwriter or controlling person in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or omission made in such registration statement,
preliminary prospectus, summary prospectus, prospectus, or amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by such Holder in its capacity as a shareholder,
underwriter or controlling person, respectively, specifically for use therein;
provided further that, the indemnification contained in this Section 8(a) with
respect to any preliminary prospectus shall not inure to the benefit of any
selling Holder or underwriter (or to the benefit of any person controlling such
selling Holder or underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of any of the shares to any person if
a copy of the prospectus, as amended and
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supplemented, shall not have been delivered or sent to such person within the
time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus was corrected in the
prospectus, as amended and supplemented, provided that the Company has delivered
the prospectus, as amended or supplemented, to the selling Holder or underwriter
on a timely basis to permit such delivery or sending. The indemnity contained in
this Section 8(a) shall not apply to amounts paid in settlement of any such
claim, if such settlement is effected without the consent of the Company.
(b) In the event of any registration of any of its
securities under the Act pursuant to this Agreement, each holder joining in a
registration of such securities shall indemnify and hold harmless the Company,
each underwriter (as defined in the Act) and each controlling person of the
Company or underwriter, if any (within the meaning of the Act), against any
losses, claims, damages or liabilities, joint or several (or actions in respect
thereof), to which the Company, underwriter or controlling person may be subject
under the Act, under any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any Violation, in each case only to the extent that such
Violation occurs in reliance upon written information furnished by the holder in
its capacity as a shareholder expressly for use in connection with such
registration, and shall reimburse the Company, underwriter or controlling person
for any legal or other expenses reasonably incurred by the Company, underwriter
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that in no event
shall the selling Holder's indemnification obligations under this Section 8(b)
exceed the amount of gross proceeds received by the selling Holder pursuant to
such registration. Notwith-standing the foregoing provisions of this Section
8(b), if any losses, claims, damages, or liabilities arise out of or are based
upon an untrue statement, alleged untrue statement, omission or alleged omission
contained in any preliminary prospectus which did not appear in the final
prospectus or, to the extent hereinafter provided, as such final prospectus was
amended or supplemented (if so amended or supplemented), a selling Holder shall
not have any such liability with respect thereto to (i) the Company, any person
who controls the Company within the meaning of the Act, any officer of the
Company who signed the registration statement or any director of the Company, if
the Company delivered a copy of the preliminary prospectus to the person
alleging such losses, claims, damages or liabilities and failed to deliver a
copy of the final prospectus or, to the extent such final prospectus has
theretofore been amended or supplemented, a copy of the final prospectus as so
amended or supplemented, to such person at or prior to the written confirmation
of the sale to such person or (ii) any underwriter or any person controlling
such underwriter within the meaning of the Act, if such underwriter delivered a
copy of the preliminary prospectus to the person alleging such losses, claims,
damages or liabilities and failed to deliver a copy of the final prospectus or,
to the extent such final prospectus has theretofore been amended or
supplemented, a copy of the final prospectus, as so amended or supplemented, to
such person at or prior to the written confirmation of the sale to such person.
The indemnity provided for herein shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company, underwriter
or controlling person.
(c) If the indemnification provided for above is
unavailable to an indemnified party in respect of any losses, claims, damages or
liabilities 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 losses, claims,
damages or liabilities, 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 which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable
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considerations. The relative fault of the indemnifying party and of 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. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 8(c) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in this Section 8(c). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities or actions in respect thereof referred to in
this Section 8(c) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentations (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(d) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party shall notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section or to the extent that the
indemnifying party has been prejudiced as a proximate result of such failure. In
case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, to assume the defense thereof, with counsel of its choice,
and the indemnifying party shall not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (1 the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time, (2) the indemnifying party and its counsel do not actively and vigorously
pursue the defense of such action, (3) the indemnifying party, in its
discretion, has authorized the employment of counsel for the indemnified party
at the expense of the indemnifying party or (4) the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, in such case
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses at their expense (in which case the indemnifying
party shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties).
9. RULE 144 REQUIREMENTS.
The Company shall use its best efforts to file the reports
required by it under the Act and the Securities Exchange Act of 1934 and the
rules and regulations adopted thereunder and to make publicly available, and
available to the holders of Registrable Stock, such information as is necessary
to enable the holders of Registrable Stock to make sales of such stock pursuant
to Rule 144 as promulgated by the Commission under the Act, as such Rule may be
amended from time to time ("Rule 144"). The Company shall furnish to any such
holder, upon request, (i) a written statement executed by the Company as to
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whether or not it has complied with the current public information requirements
of Rule 144 and (ii) a copy of the most recent annual and quarterly reports of
the Company.
10. HOLDBACK.
If the Company files a registration statement in connection
with the initial public offering, a holder of Registrable Stock shall not effect
any sale or distribution of any shares (except pursuant to such registration
statement) of the capital stock of the Company, whether now owned or hereafter
acquired, during the period requested by the underwriters commencing with the
effective date of such registration statement and ending on the close of
business on a date which is not more than one hundred and eighty (180) days
thereafter or such time as the registration statement is withdrawn, whichever is
earlier.
11. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to cause the Company to register Registrable Stock
pursuant to this Agreement may only be assigned to a party to this Agreement.
12. TERMINATION OF REGISTRATION RIGHTS.
The registration rights set forth in this Agreement shall
terminate when the McDonough Entities collectively no longer hold more than ten
percent (10%) of the Registrable Stock.
13. MISCELLANEOUS.
(a) NOTICES. Notice to either party provided for in
this Agreement shall be given by personal delivery or by mailing such notice by
first class or certified mail, return receipt requested, to the addresses stated
below or such other address as either party may hereafter specify in writing:
To RemedyTemp:
Attn: President
RemedyTemp, Inc.
32122 Camino Capistrano
San Juan Capistrano, CA 92675
To The McDonough Entities:
Attn: Robert E. McDonough, Sr.
32122 Camino Capistrano
San Juan Capistrano, CA 92675
(b) SEVERABILITY AND GOVERNING LAW. Should any
Section or any part of a Section within this Agreement be rendered void, invalid
or unenforceable by any court of law for any reason, such invalidity or
unenforceability shall not void or render invalid or unenforceable any other
Section or part of a Section in this Agreement. This Agreement is made and
entered into in the State of California and the laws of California
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shall govern the validity and interpretation hereof and the performance by the
parties hereto of their respective duties and obligations hereunder.
(c) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same Agreement.
(d) ENTIRE AGREEMENT. This Agreement contains the
entire understanding of the parties and there are no further or other agreements
or understandings, written or oral, in effect between the parties relating to
the subject matter hereof.
(e) COSTS AND ATTORNEYS' FEES. In the event that any
action, suit, or other proceeding is instituted concerning or arising out of
this Agreement, the prevailing party shall recover from the non-prevailing party
all of such prevailing party's costs and attorneys' fees incurred in each and
every such action, suit, or other proceeding, including any and all appeals or
petitions therefrom. As used herein, "attorneys' fees" shall mean the reasonable
costs of any legal services actually rendered in connection with the matters
involved, calculated on the basis of the usual fee charged by the attorneys
performing such services and the reasonable expenses incurred in connection
therewith.
(f) ARBITRATION. Any controversy, dispute or claim
arising out of the interpretation, performance or breach of the terms of this
Agreement shall be resolved by binding arbitration. Such arbitration shall
proceed in accordance with the then-current rules for arbitration as established
by Judicial Arbitration Mediation Services, Inc./ENDISPUTE ("JAMS"), unless the
parties hereto mutually agree otherwise, and pursuant to the following
procedures:
(i) Each of the Company and the Shareholders
shall appoint an arbitrator from the JAMS panel of retired judges, and those
appointed arbitrators shall appoint a third arbitrator from the JAMS panel of
retired judges within ten (10) days. If the appointed arbitrators fail to
appoint a third arbitrator within ten (10) days, such third arbitrator shall be
appointed by JAMS in accordance with its rules.
(ii) Reasonable discovery shall be allowed
in arbitration.
(iii) All proceedings before the arbitrators
shall be held in Orange County, California.
(iv) The award rendered by the arbitrators
shall be final and binding and judgment may be entered in accordance with
applicable law and in any court having jurisdiction thereof.
(v) The award rendered by the arbitrators
shall include (i) a provision that the prevailing party in such arbitration
recover its costs relating to the arbitration and reasonable attorneys' fees
from the other party, (ii) the amount of such costs and fees, and (iii) an order
that the losing party pay the fees and expenses of the arbitrators.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the dates below.
DATE:______________________ REMEDYTEMP, INC., a California
Corporation
By:___________________________________
Paul W. Mikos
President and Chief Executive Officer
DATE:______________________ ______________________________________
Robert E. McDonough, Sr.,
an individual
DATE:______________________ ______________________________________
Robert E. McDonough, Trustee of the
McDonough Survivor's Trust U/D/T
dated 6/5/85
DATE:______________________ ______________________________________
Robert E. McDonough, Trustee of the
McDonough Exempt Marital Trust
U/D/T dated 6/5/85
11