EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July 29, 1999,
among CROSS COUNTRY STAFFING, INC., a Delaware corporation (the "COMPANY") and
the Investors (as defined below).
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Purchase Agreement dated as
of July 29, 1999 (the "PURCHASE AGREEMENT"), among the Company and the Investors
and their Affiliates, the Investors and their Affiliates have acquired (i) an
aggregate of 86,957 shares of Common Stock (as defined herein), subject to
adjustment and (ii) a right to receive an additional 11,944 shares of Common
Stock, in the aggregate (subject to adjustment), pursuant to the provisions of
Section 7.11 of the Purchase Agreement;
WHEREAS, the Company desires to grant to the Investors certain
registration rights relating to the shares of Common Stock.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed as follows:
1. DEFINITIONS. The following shall have (unless otherwise
provided elsewhere in this Registration Rights Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"AGREEMENT" means this Registration Rights Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to the Agreement as the same
may be in effect at the time such reference becomes operative.
"CLASS A COMMON STOCK" means the Class A Common Stock, $.01
par value, of the Company.
"CLASS B COMMON STOCK" means the Class B Common Stock, $.01
par value, of the Company.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means collectively, the Class A Common Stock
and the Class B Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"INVESTORS" means DB Capital Investors, L.P. and The
Northwestern Mutual Life Insurance Company.
"NASD" means the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"INITIAL PUBLIC EQUITY OFFERING" means an underwritten public
offering of the Class A Common Stock made on a primary basis by the Company
pursuant to a registration statement filed with and declared effective by the
Commission in accordance with the Securities Act resulting in net cash proceeds
to the Company (after deducting any underwriting discounts and commissions) of
at least $25.0 million.
"PURCHASE AGREEMENT" has the meaning given to it in the
recitals hereto.
"REGISTERING SECURITY HOLDER" has the meaning given to it in
SECTION 3.
"REGISTRABLE SECURITIES" means, collectively (i) the shares of
Class A Common Stock owned by the Investors on the date hereof; (ii) any shares
of Class A Common Stock resulting from or which may result from the conversion
of shares of Class B Common Stock owned by the Investors; (iii) any shares of
Class A Common Stock hereafter acquired by the Investors; and (iv) any shares of
Common Stock hereafter distributed by the Company to the holders of Registrable
Securities as a stock dividend or otherwise; PROVIDED, HOWEVER, that any such
securities shall cease to be Registrable Securities when (a) such securities
shall have been registered under the Securities Act, the registration statement
with respect to the sale of such securities shall have become effective under
the Securities Act and such securities shall have been disposed of pursuant to
such effective registration statement; (b) such securities shall have been
otherwise transferred, if new certificates or other evidences of ownership for
them not bearing a legend restricting further transfer and not subject to any
stop transfer order or other restrictions on transfer shall have been delivered
by the Company and subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities Act or any
state securities law then in force; (c) such securities shall cease to be
outstanding; or (d) such securities shall be eligible for sale pursuant to Rule
144(k) under the Securities Act or any successor rule which permits resale of
such securities without restriction.
"REGISTRATION REQUEST" has the meaning given to it in SECTION
2.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
2. REQUIRED REGISTRATION. If at any time following 180 days
after the consummation of the Initial Public Equity Offering (or 90 days, if the
managing underwriter for the Initial Public Equity Offering consents), the
Company receives a written request (a "REGISTRATION REQUEST") from the Investors
requesting that the Company effect the registration of Registrable Securities
under the Securities Act and specifying the intended method or methods of
disposition thereof, the Company
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shall, as expeditiously as is possible, use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by such holders for sale, all to
the extent required to permit the disposition (in accordance with the
intended method or methods thereof, as aforesaid) of the Registrable
Securities so registered. In order to count as an "effected" registration
statement, such registration statement shall not have been withdrawn and all
shares registered pursuant to it (excluding any overallotment shares) shall
have been sold. The Company shall have the right to defer the filing of any
registration statement requested pursuant to this SECTION 2 for a period not
to exceed ninety (90) days if in the good faith determination of the Board of
Directors of the Company the filing of such registration statement would be
seriously detrimental to the Company. In no event shall the Company be
required to effect more than one registration under this Section 2.
3. INCIDENTAL REGISTRATION.
(a) If at any time following the consummation of the Initial
Public Equity Offering, the Company at any time proposes to file on its behalf
and/or on behalf of any of its security holders (the "REGISTERING SECURITY
HOLDERS"), a Registration Statement under the Securities Act on any form (other
than a Registration Statement on Form S-4 or S-8 or any successor form for
securities to be offered in a transaction of the type referred to in Rule 145
under the Securities Act or to employees of the Company pursuant to any employee
benefit plan, respectively) for the general registration of securities to be
sold for cash with respect to any class of equity security (as defined in
Section 3(a)(11) of the Exchange Act) of the Company, it will give written
notice to all holders of Registrable Securities at least 30 days before the
initial filing with the Commission of such Registration Statement, which notice
shall set forth the intended method of disposition of the securities proposed to
be registered by the Company. The notice shall offer to include in such filing
the aggregate number of shares of Registrable Securities as such holders may
request.
(b) Each holder of any such Registrable Securities desiring to
have Registrable Securities registered under this SECTION 3 shall advise the
Company in writing within 10 days after the date of receipt of such offer from
the Company, setting forth the amount of such Registrable Securities for which
registration is requested. The Company shall thereupon include in such filing
the number of shares of Registrable Securities for which registration is so
requested, subject to the next sentence, and shall use its best efforts to
effect registration under the Securities Act of such shares. If the managing
underwriter of a proposed public offering shall advise the Company in writing
that, in its opinion, the distribution of the Registrable Securities requested
to be included in the registration under this SECTION 3 concurrently with the
securities being registered on behalf of the Company or such Registering
Security Holder would materially and adversely affect the distribution of such
securities by the Company or such Registering Security Holder, then all selling
security holders that have requested that their Registrable Securities be
included in the registration under this SECTION 3 shall reduce the amount of
securities each intended to distribute through such offering on a pro rata
basis.
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4. REGISTRATION PROCEDURES. If the Company is required by the
provisions of SECTION 2 OR 3 to use its best efforts to effect the registration
of any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a
Registration Statement with respect to such securities and use its best efforts
to cause such Registration Statement to become and remain effective for a period
of time required for the disposition of such securities by the holders thereof,
but not to exceed 180 days;
(b) prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities covered by such
Registration Statement until the earlier of such time as all of such securities
have been disposed of in a public offering or the expiration of 180 days;
(c) furnish to such selling security holders such
number of copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as such selling security holders may reasonably
request;
(d) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
each holder of such securities shall request (PROVIDED, HOWEVER, that the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service of process), and do such other reasonable
acts and things as may be required of it to enable such holder to consummate the
disposition in such jurisdiction of the securities covered by such Registration
Statement;
(e) furnish, in connection with any registration of
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale pursuant to such registration or, if such
Registrable Securities are not being sold through underwriters, on the date that
the Registration Statement with respect to such Registrable Securities becomes
effective, (1) an opinion, dated such date, of the independent counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the holders making such request, in customary form
and covering matters of the type customarily covered in such legal opinions; and
(2) a comfort letter dated such date, from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and if such
Registrable Securities are not being sold through underwriters, then to the
holder(s) of Registrable Securities being registered and, if such accountants
refuse to deliver such letter to such holder(s), then to the Company in a
customary form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or such holder(s) shall reasonably
request.
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Such opinion of counsel shall additionally cover such other legal matters
regarding the registration in respect of which such opinion is being given as
such holder(s) of Registrable Securities may reasonably request consistent
with opinions customarily provided in similar transactions. Such letter from
the independent certified public accountants shall additionally cover such
other financial matters (including information as to the period ending not
more than 5 business days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as such
holders of the Registrable Securities being so registered may reasonably
request consistent with comfort letters customarily provided in similar
transactions;
(f) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities; and
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than 18
months after the effective date of the Registration Statement, an earnings
statement covering the period of at least 12 months beginning with the first
full month after the effective date of such Registration Statement, which
earnings statements shall satisfy the provisions of Section 11(a) of the
Securities Act.
It shall be a condition precedent to the obligation of the
Company to take any action pursuant to this Agreement in respect of the
securities which are to be registered at the request of any holder of
Registrable Securities that (i) such holder shall furnish to the Company such
information regarding the securities held by such holder and the intended method
of disposition thereof as the Company shall reasonably request and as shall be
required under the Securities Act in connection with the action taken by the
Company and (ii) that such holder shall deliver and perform under such
underwriting and selling shareholder agreements as may be reasonably requested
by the underwriters.
5. EXPENSES. All expenses incurred in complying with this
Agreement, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), printing expenses,
fees and disbursements of counsel for the Company, expenses of any special
audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions pursuant to
SECTION 4(d), shall be paid by the Company, except that:
(a) The Company shall not be liable for any fees,
discounts or commissions to any underwriter in respect of the securities sold by
such holder of Registrable Securities; and
(b) The Company shall only be responsible the fees or
expenses of one counsel for the selling security holders as a group.
6. INDEMNIFICATION AND CONTRIBUTION.
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(a) In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless the holder of such Registrable
Securities, such holder's directors and officers, and each other Person (in
cluding each underwriter) who participated in the offering of such Registrable
Securities and each other Person, if any, who controls such holder or such
participating Person within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such holder
or any such director or officer or participating Person or controlling Person
may become subject under the Securities Act or 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 (i) any alleged untrue statement
of any material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse such holder or such director, officer or participating Person or
controlling Person for any legal or any other expenses reasonably incurred by
such holder or such director, officer or participating Person or controlling
Person in connection with investi gating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or alleged
omission made in such Registration Statement, preliminary prospectus, prospectus
or amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such holder specifically for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or such director, officer or
participating Person or controlling Person, and shall survive the transfer of
such securities by such holder.
(b) In the event of any registration of any
Registrable Securities under the Securities Act pursuant to this Agreement, each
selling holder of Registrable Securities severally and not jointly shall
indemnify and hold harmless the Company, its directors and officers, and each
other Person (including each underwriter) who participated in the offering of
such Registrable Securities and each other Person, if any, who controls the
Company or such participating Person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company or any such director or officer or participating Person or
controlling Person may become subject under the Securities Act or 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 alleged
untrue statement of any material fact contained in any Registration Statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, where such statement is in conformity with written
information provided by such holder of Registrable Securities expressly for use
therein, and shall reimburse the Company or such director, officer or
participating Person or controlling Person for any legal or any other expenses
reasonably incurred by the Company or such director, officer or participating
Person or controlling Person in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that such
holder of Registrable Securities shall not be liable for any amounts
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in excess of the net proceeds received by such holder for the sale of its
shares. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or such director,
officer or participating Person or controlling Person, and shall survive the
transfer of such securities by such holder.
(c) If the indemnification provided for in this
SECTION 6 is unavailable to an indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be deter mined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this SECTION 6(c) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not also guilty of such fraudulent misrepresentation.
7. MARKET STAND-OFF AGREEMENT. If requested by an underwriter
of securities of the Company, each holder of Registrable Securities shall not
sell or otherwise transfer or dispose of any securities held by such holder
during the ninety (90) day period following the effective date of a Registration
Statement.
8. MISCELLANEOUS.
(a) NO PRIOR AGREEMENTS. This agreement supersedes
all prior agreements regarding registration rights between the Company and any
of the parties hereto and all such prior agreements are deemed terminated
hereby.
(b) REMEDIES. Each holder of Registrable Securities,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would
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not be adequate compensation for any loss incurred by reason of a breach by
it of the provisions of this Agreement and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.
(c) AMENDMENTS AND WAIVERS. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has approved the same in writing and obtained
the written consent of Investors.
(d) NOTICES. All notices and other communications
hereunder shall be validly given or made if in writing, (i) when delivered
personally (by courier service or otherwise); (ii) when sent by telecopy; or
(iii) when actually received if mailed by first-class certified or registered
United States mail, postage-prepaid and return receipt requested, and all legal
process with regard hereto shall be validly served when served in accordance
with applicable law, in each case to the address of the party to receive such
notice or other communication set forth below, or at such other address as any
party hereto may from time to time advise the other parties pursuant to this
Section:
(i) If to the Investors, to:
DB Capital Investors, L.P.
130 Liberty Street
New York, NY 10006
Attention: Heidi Silverstein
Fax: (212) 250-7651
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Securities Department
Fax: (414) 299-7124
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Attention: John A Tripodoro, Esq.
Fax: (212) 269-5420
(ii) If to the Company, to:
Cross Country Staffing, Inc.
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c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, NY 10022-4299
Attention: Mr. Thomas C. Dircks
Fax: (212) 750-9704
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Stephen W. Rubin, Esq.
Fax: (212) 969-2900
(e) SUCCESSORS AND ASSIGNS. This Agreement shall
inure to the benefit of and be binding upon (i) the successors of each of the
parties hereto and (ii) the assigns of the holders of Registrable Securities,
including any Person to whom Registrable Securities are transferred.
(f) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York
(i.e., without regard to its conflicts of law rules).
(h) SEVERABILITY. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any pro vision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
(i) ENTIRE AGREEMENT. This Agreement, together with
the Purchase Agreement dated as of the date hereof, contains the entire
understanding of the parties with respect to the subject matter contained herein
and therein, and supersede all prior arrangements or understandings with respect
thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
CROSS COUNTRY STAFFING, INC.
By: /s/ THOMAS C. DIRCKS
-------------------------------------
Thomas C. Dircks
Chairman
INVESTORS:
DB CAPITAL INVESTORS, L.P.
By: /s/ HEIDI SILVERSTEIN
--------------------------------------
Heidi Silverstein
Director
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ JEROME R. BAIER
-------------------------------------
Jerome R. Baier
Its Authorized Representative
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