Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT, dated as of August 8, 1996, by and between
PAYROLL TRANSFERS, INC., a Florida corporation (the "Company") and ACCUSTAFF
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INCORPORATED, a Florida corporation ("AccuStaff").
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1. Shares of Common Stock. Pursuant to that certain Purchase Agreement,
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dated as of August 8, 1996, by and between the Company and AccuStaff, AccuStaff
acquired (i) an 8% Subordinated Convertible Note issued by the Company (the
"Note"), which Note, upon exercise, is convertible into 140 shares of common
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stock, par value $1.00 per share (the "Common Stock"), of the Company and
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(ii) an 11-month, 25-day option (the "Option") granted pursuant to an Option
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Agreement, dated as of the date hereof, between the Company and AccuStaff to
acquire an additional 176 shares of Common Stock. The shares of Common Stock
issuable upon conversion of the Note or exercise of the Option are referred to
herein as the "Shares." This Agreement governs the rights of AccuStaff with
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respect to the registration of the Shares under the Securities Act. Capitalized
terms used herein but not otherwise defined shall have the meanings given them
in Section 3.
2. Registration Under Securities Act, etc.
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2.1 Demand Registration.
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(a) Demand. At any time and from time to time after the first
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anniversary of the consummation by the Company of an initial public offering of
shares of Common Stock, AccuStaff (the "Initiating Holder") may, upon written
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request, require the Company to effect the registration under the Securities Act
of all or part of the Registrable Securities held by such Initiating Holder;
provided, however, that the Initiating Holder may not effect a registration of
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the Registrable Securities under this Section 2.1 on more than one occasion.
Notwithstanding the foregoing, the Company shall not be required to honor a
request made pursuant to this Section 2.1 unless the number of Shares to be
offered for sale by the Initiating Holder (together with the number of Shares to
be offered for sale by other holders of Registrable Securities whom the
Initiating Holder has notified the Company intend to piggyback on such request
in accordance with Section 2.2 hereof) pursuant to such request shall have a
market value on the date of such request of greater than $10,000,000. The
Company will (and in any event within 10 business days) promptly give written
notice of such requested registration to all other holders of Common Stock, who
are entitled to include shares of Common Stock in such registration, and
thereupon the Company will use its best efforts to effect, at the earliest
possible date, the effective registration under the Securities Act, including,
without limitation, by means of a shelf registration on Form S-3 (or any
successor form) pursuant to Rule 415 under the Securities Act if so requested in
such request (but only if the Company is then eligible to use such a shelf
registration and Form S-3 (or such successor form) is available to the Company),
of (i) the Registrable Securities that the Company has been requested to
register by the Initiating Holder, and (ii) all other shares of
Common Stock that the Company wishes to register or has been requested to
register by the holders thereof (such holders together with the Initiating
Holders hereinafter are referred to as the "Selling Holders") by written request
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given to the Company within 30 days after the giving of such written notice by
the Company, all to the extent requisite to permit the disposition of the shares
of Common Stock so to be registered.
(b) Registration Statement Form. Registrations under this Section 2.1
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shall be on such appropriate form of registration statement of the Commission as
shall be reasonably selected by the Company.
(c) Effective Registration Statement. A registration requested
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pursuant to this Section 2.1 shall not be deemed to have been effected with
respect to any Selling Holder (i) unless a registration statement with respect
to shares of Common Stock requested to be included therein by such Selling
Holder has become effective and remained effective in compliance with the
provisions of the Securities Act and applicable state securities laws and until
such time as all of such shares of Common Stock covered thereby have been
disposed of in accordance with the intended methods of disposition as set forth
in such registration statement (unless the failure to so dispose of such shares
of Common Stock shall be caused solely by reason of a failure on the part of
such Selling Holder); provided, however, that except with respect to any
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registration statement filed pursuant to Rule 415 under the Securities Act, such
period need not exceed 120 days and with respect to a registration statement
filed pursuant to Rule 415, such period need not exceed one year, (ii) if, after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to such Selling Holders and has
not thereafter become effective (and the shares of Common Stock covered thereby
disposed of in accordance with (i) above) or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of such Selling Holders.
(d) Selection of Underwriters. If the Company or the Initiating
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Holder desires to engage an underwriter or underwriters with respect to an
offering of Registrable Securities effected pursuant to this Section 2.1, such
underwriter or underwriters shall be selected by the Initiating Holder and shall
be reasonably acceptable to the Company.
(e) Priority in Demand Registration. If the managing underwriter of
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any underwritten offering effected pursuant to this Section 2.1 shall advise the
Company in writing (and the Company shall so advise each Selling Holder of such
advice) that, in its opinion, the number of securities requested to be included
in the registration statement exceeds the number that can be sold in such
offering within a price range acceptable to the Initiating Holders of the
Company, except as provided in the following sentence, will include in such
registration statement, to the
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extent of the number and type that the Company is so advised can be sold in such
offering, first, Registrable Securities requested to be included in such
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registration by the Initiating Holders and second, pro rata among the remaining
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Selling Holders requesting such registration all shares of Common Stock proposed
to be sold by the Company for its own account, on the basis of the estimated
gross proceeds from the sale thereof. If all of the Registrable Securities
requested by the Initiating Holders be included in such registration cannot be
included, the Initiating Holders shall have the right to withdraw the request
for registration by giving written notice to the Company within 20 days after
receipt of notice thereof by the Company and, in the event of such withdrawal,
such request shall not be counted for purposes of the demand for registration to
which holders of Registrable Securities are entitled pursuant to Section 2.1
hereof.
(f) Delay. Notwithstanding anything herein to the contrary, if, after
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an Initiating Holder has given a written request under Section 2.1, and prior to
the effective date of the registration statement filed in response to such
request, the Board of Directors of the Company shall determine in its good faith
judgment that the filing of such registration statement (i) would have an
adverse effect on a then contemplated public offering of the Company's
securities; (ii) would require the disclosures to be made by the Company in
connection with such registration that would be materially harmful to the
Company because of transactions then being considered by, or other events then
concerning, the Company; (iii) would require the inclusion of pro forma or other
information, which requirement the Company is reasonably unable to comply with
without incurring material expense; and (iv) would interfere with any material
financing, investment, acquisition, corporate reorganization or other material
corporate transaction then under consideration, then, in such case, the Company
may decide to delay such registration, and if the Board of Directors of the
Company makes such determination, the Company shall give written notice of such
determination to the Initiating Holder and each other Selling Holder. Such delay
shall be for the period the Company determines in good faith on the basis
provided above is necessary or desirable, but in no event longer than six
months. Notwithstanding the foregoing, in no event may the Company exercise its
right to delay registration more than once in any 12 month period. The Company
shall notify the Selling Holders of the expiration of the period of delay.
Following such delay, the Company shall promptly cause the Registrable
Securities to be registered unless, within 15 days of receipt of notice from the
Company of the end of such delay, the Initiating Holder withdraws its written
request made pursuant to Section 2.1, in which case such written demand will not
be considered a demand for registration for the purposes thereof.
(g) Expenses. The Company will pay all Registration Expenses (except
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for any underwriting commissions or discounts) in connection with any
registration requested pursuant to this Section 2.1; provided, however, that the
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Company will not be required to pay the Registration Expenses with respect to
any registration the request for which has been withdrawn pursuant to Section
2.1(e).
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2.2 Piggyback Registration.
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(a) Right to Include Registrable Securities. If the Company at any
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time following the consummation of the initial public offering of the Company's
Common Stock proposes to register any securities under the Securities Act on any
form other than Forms S-4 or S-8 or their successor forms, whether or not for
sale for its own account, it will each such time give prompt written notice to
all registered holders of Registrable Securities of its intention to do so and
of such holders' rights under this Section 2.2. Upon the written request of any
such holder (a "Requesting Holder"), made as promptly as practicable and in any
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event within 15 days after the receipt of any such notice (10 days if the
Company states in such written notice or gives telephonic or telecopied notice
to all registered holders of Registrable Securities, with written confirmation
to follow promptly thereafter, stating that such shorter period of time is
required because of a planned filing date) (which request shall specify the
Registrable Securities intended to be disposed of by such Requesting Holder),
the Company will use its reasonable commercial efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by the Requesting Holders thereof;
provided, however, that if, at any time after giving written notice of its
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intention to register any securities under the Securities Act and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or, in
accordance with Section 2.1(f), to delay registration of such securities, the
Company shall give written notice of such determination to each Requesting
Holder of Registrable Securities and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of any holder or holders of Registrable
Securities entitled to do so to cause such registration to be effected as a
registration under Section 2.1, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities
for the same period as permitted under Section 2.1(f); provided, however, that
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the Company shall notify the Requesting Holders of the expiration of the period
of delay and, following such delay, shall promptly cause the Registrable
Securities requested to be registered by the Requesting Holders to be registered
unless, within 10 days of receipt of notice from the Company at the end of such
delay, the Requesting Holders withdraw the written request made pursuant to this
Section 2.2. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1.
(b) Priority in Incidental Registrations. If the managing underwriter
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of any underwritten offering shall inform the Company in writing of its opinion
that the number or type of Registrable Securities requested to be included in a
registration statement pursuant to this Section 2.2 would materially and
adversely affect such offering, and the Company has so advised the Requesting
Holders in writing, then the Company will include securities in such
registration
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statement, to the extent of the number and type that the Company is so advised
can be sold in (or during the time of) such offering, if such offering has been
requested in accordance with Section 2.1, then in accordance with the priority
provisions set forth in Section 2.1(e) hereof. If the offering at issue is not
subject to Section 2.1, the Company shall include in such registration
statement, first, all securities proposed to be sold by the Company for its own
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account, second, if such offering has been requested by a Person pursuant to any
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registration rights agreement between the Company and such Person and by the
terms of such registration rights agreement the securities subject to such
registration rights agreement must be included in such registration prior to
those held by the Requesting Holders, the securities requested to be included in
such offering by such person and, third, Registrable Securities requested to be
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included in such registration pursuant to this Section 2.2, pro rata among the
Requesting Holders and any other Persons with similar piggyback rights, based
upon the estimated proceeds from the sale thereof.
(c) Expenses. The Company will pay all Registration Expenses in
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connection with any registration effected pursuant to this Section 2.2.
2.3 Registration Procedures. If and whenever the Company is
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required to register any Registrable Securities under the Securities Act
pursuant to Sections 2.1 or 2.2, the Company will, as expeditiously as possible:
(i) prepare and (within 90 days after the end of the period within
which requests for registration may be given to the Company and in any event as
soon thereafter as practicable) file with the Commission a registration
statement on the appropriate form to effect such registration and thereafter use
its best efforts to cause such registration statement to become effective;
provided, however, that the Company may discontinue or delay any registration of
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securities that are not Registrable Securities (and, under the circumstances
specified in Section 2.2(a), securities that are Registrable Securities) at any
time prior to the effective date of the registration statement relating thereto;
(ii) 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
disposition of all Registrable Securities covered by such registration statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement; provided, however, that except
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with respect to any such registration statement filed pursuant to Rule 415 under
the Securities Act, such period need not exceed 135 days;
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(iii) furnish to each seller of Registrable Securities covered
by such registration statement, such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits and documents incorporated by reference therein),
such number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such seller may
reasonably request;
(iv) use its best efforts (x) to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities or blue sky laws of such States of the United States of
America where an exemption is not available and as the sellers of Registrable
Securities covered by such registration statement shall reasonably request, (y)
to keep such registration or qualification in effect for so long as such
registration statement remains in effect and (z) to take any other action that
may be reasonably necessary or advisable to enable such sellers to consummate
the disposition in such jurisdictions of the securities to be sold by such
sellers, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv) be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to the seller or sellers of
Registrable Securities to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) in the case of an underwritten or "best efforts" offering,
furnish at the effective date of such registration statement to each Selling
Holder, and such Person's underwriters, if any, a signed counterpart of:
(x) an opinion of counsel for the Company, dated the effective
date of such registration statement and, if applicable, the date of the closing
under the underwriting agreement, and
(y) a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included or
incorporated by reference in such registration statement, covering substantially
the same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of the accountants' comfort letter, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings of
securities and, in the case of the accountants' comfort letter, such other
financial matters, and, in the case of the legal opinion, such other legal
matters, as the underwriters may reasonably request;
(vii) notify each seller 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, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
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registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of any such seller
promptly prepare and furnish to it a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and, if required, make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and
promptly furnish to each such seller of Registrable Securities a copy of any
amendment or supplement to such registration statement or prospectus;
(ix) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration statement;
(x) use its best efforts to list all Registrable Securities covered
by such Registration Statement on any national securities exchange on which
securities of the same class as those requested to be included in such
registration statement are then listed (or, if such securities are not listed on
a national securities exchange but are quoted on The Nasdaq Stock Market, to
include such shares for quotation therein);
(xi) enter into such customary agreements (including an underwriting
agreement in customary form, including customary provisions concerning
indemnification of the underwriters by the Company) and take such other actions
as the sellers of Registrable Securities and the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;
(xii) notify each seller of Registrable Securities and the managing
underwriter or agent, immediately, and confirm the notice in writing (a) when
the registration statement, or any post-effective amendment to the registration
statement, shall have become effective, or any supplement to the prospectus or
any amendment to the prospectus shall have been filed, (b) of the receipt of any
comments from the Commission, (c) of any request of the Commission to amend the
registration statement or amend or supplement the prospectus or for additional
information, and (d) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or of any order
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preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction, or of the institution or threatening of any proceedings for any
such purposes; and
(xiii) use its best efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Securities contemplated
hereby.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company in a reasonably prompt
manner such information regarding such seller and such seller's intended
distribution of such securities as the Company may from time to time reasonably
request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (vii) of this
Section 2.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (vii) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
2.4 Preparation; Reasonable Investigation. In connection with the
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preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and one counsel selected by such holders the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such reasonable access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial statements
as shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.5 Rule 144. When and for so long as the Common Stock shall be
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registered pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the Company will file the reports
required to be filed by it under the Exchange Act and will take such further
action as any holder may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
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registration under the Securities Act under the exemptions provided by Rule 144,
as such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements and, if it has not so complied, stating that it
will promptly do so.
2.6 Hold-Back. At the request of the Company, AccuStaff, in the
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event the Company effects an underwritten public offering (including, without
limitation, its initial public offering), agrees, if requested by the managing
underwriter or underwriters for such underwritten offering not to effect (except
as part of such underwritten offering) any public sale or distribution of
Registrable Securities, including a sale pursuant to Rule 144, during the period
commencing 7 days prior to and ending more than 180 days (with respect to an
initial public offering and 90 days for any other public offering) subsequent to
the date of the execution of an underwriting or pricing agreement with respect
to such underwritten offering; provided, that, the Company shall not exercise
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its hold-back right more often than once per year and this right shall terminate
if AccuStaff owns less than 5% of the Common Stock (assuming conversion of the
Note and the exercise of the Option).
2.7 Indemnification.
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(a) Indemnification by the Company. The Company will, and hereby
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does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to Section 2.1, or 2.2, each seller of any Registrable Securities
covered by such registration statement and each other Person who participates as
an underwriter in the offering or sale of such securities and each other Person,
if any, who controls such seller or any such underwriter within the meaning of
the Securities Act, and their respective directors, officers, partners, members
and agents, against any losses, claims, damages or liabilities, joint or
several, to which such seller or underwriter or any such director, officer,
partner, member, agent or controlling person may become subject under the
Securities Act, any state securities law or "blue sky" law, any applicable rule
or regulation or otherwise, including, without limitation, the fees and expenses
of legal counsel (including those incurred in connection with any claim for
indemnity hereunder), insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or 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,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading
under the Securities Act, any state securities law or "blue sky" law, any
applicable rule or regulation or otherwise, and the Company will reimburse such
seller or underwriter and each such director, officer, partner, member and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any
such loss, claim,
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liability, action or proceeding; provided, however, that the Company shall not
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be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such seller or underwriter, as the case may be,
specifically stating that it is for use in the preparation thereof; and provided
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further, that the Company shall not be liable to any Person who participates as
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an underwriter in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director, officer,
partner, member, agent or controlling person and shall survive the transfer of
such securities by such seller.
(b) Indemnification by the Sellers. As a condition to including any
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Registrable Securities in any registration statement, the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section 2.7(a)) the Company, and each
director of the Company, each officer of the Company and each other Person, if
any, who participates as an underwriter in the offering or sale of such
securities and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, that
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the liability of such indemnifying party under this Section 2.7(b) shall be
limited to the amount of the net proceeds received by such indemnifying party in
the offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
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party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 2.7(a) or (b), such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the
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commencement of such action; provided, however, that the failure of any
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indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 2.7, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. 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 may wish, to assume the defense
thereof, with counsel reasonably satis factory to such indemnified party;
provided, however, that any indemnified party may, at its own expense, retain
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separate counsel to participate in such defense. Notwithstanding the foregoing,
in any action or proceeding in which both the Company and an indemnified party
is a party, such indemnified party shall have the right to employ separate
counsel at the Company's expense and to control its defense of such action or
proceeding if the named parties to any such action, suit or proceeding include
both the indemnified party in the Company and such indemnified party shall have
been advised by its counsel that in such counsel's opinion representation of
such indemnified party and the Company by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
potential differing interests between them; provided, however, that in no
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event shall the Company be required to pay fees and expenses under this
Section 2.7 for more than one firm of attorneys in any jurisdiction
in any one legal action or group of related legal actions. No indemnifying
party shall be liable for any settlement of any action or proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
No indemnifying party shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation or which requires action other than the payment of
money by the indemnifying party.
(d) Contribution. If the indemnification provided for in this Section
------------
2.7 shall for any reason be held by a court to be unavailable to an indemnified
party under Section 2.7(a) or (b) hereof in respect of any loss, claim, damage
or liability, or any action in respect thereof, then, in lieu of the amount paid
or payable under Section 2.7(a) or (b), the indemnified party and the
indemnifying party under Section 2.7(a) or (b) shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the same, including those
incurred in connection with any claim for indemnity hereunder), (i) in such
proportion as is appropriate to reflect the relative fault of the Company and
the seller or prospective seller of Registrable Securities covered by the
registration statement which resulted in such loss, claim, damage or liability,
or action or proceeding in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and such seller or
prospective seller from the offering of the securities covered by such
registration statement; provided, however, that for purposes hereof, in no event
-------- -------
shall the liability of any seller or prospective seller exceed the amount of
proceeds received by such seller or prospective
11
seller. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. A Seller's or
prospective seller's obligation to contribute as provided in this Section 2.7(d)
are several in proportion to the relative value of its Registrable Securities
covered by such registration statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Indemnification Payments. The indemnification and contribution
------------------------
required by this Section 2.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
3. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Affiliate" means, with respect to any Person, any other Person
---------
controlling, controlled by or under common control with such Person.
"Commission" means the Securities and Exchange Commission.
----------
"Common Stock" shall mean and include the Common Stock, par value $1.00
------------
per share, of the Company and each other class of capital stock of the Company
that does not have a preference over any other class of capital stock of the
Company as to dividends or upon liquidation, dissolution or winding up of the
Company and, in each case, shall include any other class of capital stock of the
Company into which such stock is reclassified or reconstituted.
"Initiating Holder" is defined in Section 2.1.
-----------------
"Person" means any individual, firm, corporation, partnership, limited
------
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Registrable Securities" means (a) any Shares and (b) any securities of
----------------------
the Company issued or issuable with respect to any Shares by way of a dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any
particular Registrable Securities, once issued, such securities shall cease to
be Registrable Securities when (A) a 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 in accordance with such registration
statement, (B) they shall have been otherwise transferred, new certificates for
them not bearing a legend restricting further transfer shall have been delivered
by the
12
Company and subsequent public distribution of them shall not, in the
opinion of counsel for the holders, require registration of them under the
Securities Act, (C) such Registrable Securities are permitted to be disposed of
pursuant to Rule 144 (or any successor to such rule) under the Securities Act or
(D) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Section 2, including, without limitation, all
registration and filing fees, all fees of national securities exchanges or the
National Association of Securities Dealers, Inc., all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of "cold comfort" letters required by or incident to such
performance and compliance, any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (excluding any underwriting
discounts or commissions with respect to the Registrable Securities) and the
reasonable fees and expenses of one counsel to the Selling Holders (selected by
Selling Holders representing at least 50% of the Registrable Securities covered
by such registration); provided, however, that in connection with a registration
-------- -------
pursuant to Section 2.2, the expenses of such counsel shall not exceed $50,000.
Notwithstanding the foregoing, in the event the Company shall determine, in
accordance with Section 2.2, not to register any securities with respect to
which it had given written notice of its intention to so register to holders of
Registrable Securities, all of the costs of the type (and subject to any
limitation to the extent) set forth in this definition and incurred by
Requesting Holders in connection with such registration on or prior to the date
the Company notifies the Requesting Holders of such determination shall be
deemed Registration Expenses.
"Requesting Holder" is defined in Section 2.2.
-----------------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Selling Holder" is defined in Section 2.1.
--------------
4. Amendments and Waivers. This Agreement may be amended with the
----------------------
written consent of the Company and holders of a majority of the Registrable
Securities and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the holder or holders of at least a majority of the Registrable Securities
affected by such amendment, action or omission to act. Each holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any consent authorized by this Section 4, whether or not such Registrable
Securities shall have been marked to indicate such consent.
5. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other
13
action by any holder or holders of Registrable Securities pursuant to this
Agreement or any determination of any number or percentage of shares of
Registrable Securities held by any holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
6. Notices. All notices, demands and other communications provided
-------
for, required or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, courier
services, overnight mail, in each case postage prepaid, personal delivery or
facsimile transmission. Any such notice or communication shall be deemed to have
been duly given (i) when delivered by hand, if personally delivered or when by
facsimile transmission, if receipt is confirmed by telephone the same day, (ii)
when delivered by courier or overnight mail, if delivered by a commercial
carrier service or overnight mail and (iii) 5 days after being deposited in the
mail; provided, that in all cases, confirmation by telephone or facsimile of
--------
receipt thereof has been obtained:
If to the Company:
Payroll Transfers, Inc.
3710 Corporex Drive
Suite 300
Tampa, Florida
Attention: President
Telephone: (813) 664-0404
Telecopy: (813) 621-6816
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Matthew Nimetz, Esq.
Telephone: (212) 373-3000
Telecopy: (212) 757-3990
14
If to AccuStaff:
AccuStaff Incorporated
6440 Atlantic Boulevard
Jacksonville, Florida 32211
Attention: Derek Dewan, President
Telephone: (904) 725-5374
Telecopy: (904) 725-8513
with a copy to:
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: Timothy Mann, Esq.
Telephone: (404) 881-7000
Telecopy: (404) 881-7777
or to such address as a party may instruct by notice provided in accordance
herewith (which address will be provided promptly by the Company upon the
request of any party hereof).
7. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and AccuStaff may assign
this Agreement to any of its Affiliates and to any holder of at least 5% of
Registrable Securities (and, with respect to the holders of Registrable
Securities, subject to the provisions respecting the minimum percentage of
Shares required in order to be entitled to certain rights, or take certain
actions, contained herein).
8. 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 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.
9. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
AccuStaff shall be enforceable to the fullest extent permitted by law.
15
10. Entire Agreement. This Agreement is the final expression of the
----------------
parties' agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings other than those set forth or referred to herein and therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
11. Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
12. Termination. This Agreement shall terminate with respect to
-----------
AccuStaff or any of its permitted assignees when it no longer owns any
Registrable Securities.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the state of New York applicable to agreements made
and to be performed entirely within such state.
14. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which when so executed shall be deemed an original and all
of which taken together shall constitute one and the same instrument.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
PAYROLL TRANSFERS, INC.
By:
-------------------------------------
Name:
Title:
ACCUSTAFF INCORPORATED
By:
-------------------------------------
Name:
Title:
17