1
EXHIBIT 99.10
ANNEX I
ANNEX I
TO
SUBSCRIPTION
AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 25, 1997
(this "Agreement"), is made by and among COMFORCE Corporation, a Delaware
corporation (the "Company"), and the person named on the signature page hereto
(the "Initial Investor").
W I T N E S S E T H :
WHEREAS, in connection with the Private Securities
Subscription Agreement, dated as of February 25, 1997 between the
Initial Investor and the Company (the "Subscription Agreement"), the
Company has agreed, upon the terms and subject to the conditions of
the Subscription Agreement, to issue and sell to the Initial Investor
Convertible Debentures (the "Debentures"), convertible into shares of
Common Stock, $.01 par value (the "Common Stock"), together with
Warrants (referred to herein as "Warrants" and/or "Additional
Warrants"), which are exercisable for the purchase of shares of common
stock of the Company (the "Common Stock"). The shares of Common Stock
into which the Debentures, Warrants and Additional Warrants are
exercisable to purchase are collectively referred to herein as the
"Shares"); and
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), and applicable
state securities laws with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
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February 25, 1997 Page 2
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall
have the following meanings:
(i) "Investor" means the Initial Investor and any transferee
or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(ii) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement
or Statements in compliance with the Securities Act on such
appropriate registration form promulgated by the Commission as shall
be selected by the Company, and, when requested by the Initial
Investor or any Investor pursuant to Section 2(c) hereof, shall (A) be
reasonably acceptable to the holders of a majority of the Registrable
Securities to which such registration relates, and (B) shall permit
the disposition of Registrable Securities in accordance with the
intended method or methods specified in the Investor's request for
such registration, and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and
Exchange Commission ("SEC").
(iii) "Registrable Securities" means the Shares.
(iv) "Registration Statement" means a registration
statement under the Securities Act registering securities of the
Company.
(b) As used in this Agreement, the term Investor includes (i)
each Investor (as defined above) and (ii) each person who is a
permitted transferee or assignee of the Registrable Securities
pursuant to Section 9 of this Agreement.
(c) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the
Subscription Agreement.
2. REGISTRATION.
(a) INITIAL REGISTRATION. The Company must register the
Shares underlying the Debentures, the Warrants and the Additional
Warrants for resale with the U.S. Securities and Exchange Commission
("SEC"), and the registration statement therefor (the "Registration
Statement") must be declared effective by the SEC on or before the day
prior to the six-month (180-day) anniversary of Closing (the "Required
Effective Date"). In the event the Registration Statement has not been
declared effective by the Required Effective Date (such situation
referred to herein as "Late Registration"), the Company shall pay to
the Investor cash equal to 1% of the aggregate subscription price paid
by the Investor
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 3
pursuant to the Subscription Agreement for the first month and 2% of
such aggregate subscription price per month thereafter (the
"Penalties") until the Registration Statement is declared effective.
The Penalties for the first month shall be paid by the Company within
two (2) business days of the end of the 30-day period following the
Required Effective Date. Payment of the Penalties shall continue on
the same date of each month thereafter until the Registration
Statement has been declared effective and the Company has so advised
the Investor. Penalties accruing for a period of less than one month
shall be prorated on a daily basis. Provided that the Company has
reasonably used its best efforts to have the Registration Statement
declared effective by the SEC prior to the Required Effective Date,
the Investor shall have no other remedy for damages which occur solely
as a result of Late Registration for the period between Closing and
the nine-month anniversary of Closing. Thereafter, the Investor shall
be free to bring any action allowable in law or in equity against the
Company as a result of Late Registration, for damages occurring on or
after the nine-month anniversary of Closing.
(b) PIGGY-BACK REGISTRATIONS. If the Registration Statement
has not been declared effective within nine (9) months following
Closing and the Company thereafter prepares and files with the SEC a
Registration Statement relating to an offering for its own account or
the account of others under the Securities Act any of its equity
securities, other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Investor, who is
entitled to registration rights under this Section 2(b) written notice
of such determination and, if within twenty (20) days after receipt of
such notice, such Investor shall so request in writing, the Company
shall include in such Registration Statement all or any part of the
Registrable Securities such Investor requests to be registered, except
that if, in connection with any underwritten public offering for the
account of the Company the managing underwriter(s) thereof shall
impose a limitation on the number of shares of Common Stock which may
be included in the Registration Statement because, in such
underwriter(s)' judgment, such limitation is necessary to effect an
orderly public distribution, then the Company shall be obligated to
include in such Registration Statement only such limited portion, if
any, of the Registrable Securities with respect to which such Investor
has requested inclusion hereunder. Any exclusion of Registrable
Securities shall be made pro rata among the Investors seeking to
include Registrable Securities, in proportion to the number of
Registrable Securities sought to be included by such Investors;
provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding
securities the holders of which are not entitled by right to inclusion
of securities in such Registration Statement; and provided, further,
however, that, after
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 4
giving effect to the immediately preceding proviso, any exclusion of
Registrable Securities shall be made pro rata with holders of other
securities having the right to include such securities in the
Registration Statement to the extent such pro rata allotment is
permitted under the Company's currently existing agreements with such
holders of the Company's securities. No right to registration of
Registrable Securities under this Section 2(b) shall be construed to
limit any registration required under Section 2(c) hereof. The
obligations of the Company under this Section 2(b) may be waived by
Investors holding a majority in interest of the Registrable Securities
and shall expire (i) after the Company has afforded the opportunity
for the Investors to exercise registration rights under this Section
2(b) for two registrations; provided, however, that any Investor who
shall have had any Registrable Securities excluded from any
Registration Statement in accordance with this Section 2(b) shall be
entitled to include in an additional Registration Statement filed by
the Company the Registrable Securities so excluded or (ii) when all of
the Registrable Securities held by any Investor may be sold by such
Investor under Rule 144 under the Securities Act ("Rule 144") within
any three-month period.
(c) DEMAND REGISTRATION. If the Registration Statement has
not been declared effective within nine (9) months following Closing,
any Investor holding a majority of the Registrable Securities shall
notify the Company in writing that it intends to offer or cause to be
offered for public sale Registrable Securities held by such Investor,
the Company shall cause such of the Registrable Securities as may be
requested by any Investor to be registered, on one occasion only,
under the Securities Act and applicable state laws as expeditiously as
possible. Once the right for registration of any Registrable
Securities under this Section 2(c) has been exercised by any Investor,
the Company shall prepare and file a Registration Statement covering
such Registrable Securities with the SEC within seven (7) days of the
exercise of such registration right.
(d) If any offering pursuant to a Registration Statement
pursuant to Section 2(c) hereof involves (at the Company's election)
an underwritten offering, the Investors who hold a majority in
interest of the Registrable Securities subject to such underwritten
offering shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer the
offering, which investment banker or bankers or manager or managers
shall be reasonably satisfactory to the Company. The Investors who
hold the Registrable Securities to be included in such underwriting
shall pay all underwriting discounts and commissions and other fees
and expenses of such investment banker or bankers and manager or
managers so selected in accordance with this Section 2(d) (other than
fees and expenses relating to registration of Registrable Securities
under federal or state securities laws which are payable by the
Company pursuant to Section 5 hereof) with respect to their
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 5
Registrable Securities and the fees and expenses of such legal counsel
selected by the Investors.
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall:
(a) prepare promptly and file with the SEC promptly (but in
no event later than 7 days) after a request in accordance with Section
2(c) hereof a Registration Statement or Statements with respect to all
Registrable Securities to be included therein, and thereafter use its
reasonable best efforts to cause the Registration Statement to become
effective as soon as reasonably possible after such filing. If such
Registration Statement is filed pursuant to Rule 415, the Company
shall keep the Registration Statement effective pursuant to Rule 415
at all times until such date as is three years after the date such
Registration Statement is first ordered effective by the SEC. In any
case, the Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) filed by the
Company shall not contain any 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, in light of the
circumstances in which they were made, not misleading; provided,
however, that, subject to the conditions set forth in Section 4(a)
below, each Investor may notify the Company in writing that it wishes
to exclude all or a portion of its Registrable Securities from such
Registration Statement; provided further, however, that if at any time
the Investors shall be entitled to sell all Registrable Securities
held by them pursuant to Rule 144 promulgated under the Securities Act
or any other similar rule or regulation of the SEC that may at any
time permit the Investors to sell securities of the Company to the
public without registration and without imposing restrictions arising
under the federal securities laws on the purchases thereof in a period
of three consecutive months, then the Company shall, so long as it
meets the current public information requirements of Rule 144,
thereafter no longer be required to maintain the registration of
Registrable Securities pursuant to this Agreement;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration
Statement as may be necessary to keep the Registration Statement
effective at all times until such date as is three years after the
date such Registration Statement is first ordered effective by the
SEC, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by the 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 as set forth in the Registration Statement;
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 6
(c) furnish to each Investor whose Registrable Securities are
included in the Registration Statement, such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under
such other securities or blue sky laws of such jurisdictions as the
Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect
at all times until such date as is the earlier of three years after
the date such Registration Statement is first ordered effective by the
SEC or is three years after the Initial Investor acquired the Shares
and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (I) qualify to do
business in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3(d), (II) subject itself to general
taxation in any such jurisdiction, (III) file a general consent to
service of process in any such jurisdiction, (IV) provide any
undertakings that cause more than nominal expense or burden to the
Company or (V) make any change in its charter or by-laws, which in
each case the Board of Directors of the Company determines to be
contrary to the best interests of the Company and its stockholders;
(e) with regard to a demand registration pursuant to Section
2(c) hereof, in the event Investors who hold a majority in interest of
the Registrable Securities being offered in the offering select
underwriters for the offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such
offering;
(f) as promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being
sold pursuant to such registration of the happening of any event of
which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement to correct such untrue
statement or
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 7
omission, and deliver a number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request;
(g) as promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being
sold pursuant to such registration (or, in the event of an
underwritten offering pursuant to Section 2(c) hereof, the managing
underwriters) of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement at the
earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in interest
of the Registrable Securities being sold pursuant to such registration
to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing
with the SEC, and shall not file any document in a form to which such
counsel reasonably objects;
(i) make generally available to its security holders as soon
as practical, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the date of the Registration
Statement;
(j) with regard to a demand registration pursuant to Section
2(c) hereof, at the request of the Investors who hold a majority in
interest of the Registrable Securities being sold pursuant to such
registration, furnish on the date that Registrable Securities are
delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the
Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the underwriters; and (ii) an opinion, dated such date,
from counsel representing the Company for purposes of such
Registration Statement, in form and substance as is customarily given
in an underwritten public offering, addressed to the underwriters and
Investors;
(k) make available for inspection by any Investor whose
Registrable Securities are being sold pursuant to such registration,
any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent
retained by any such Investor or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable each Inspector
to exercise its due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 8
request for purposes of such due diligence; provided, however, that
each Inspector shall hold in confidence and shall not make any
disclosure (except to an Investor) of any Record or other information
which the Company determines in good faith to be confidential, and of
which determination the Inspectors are so notified, unless (i) the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court or government body of competent jurisdiction or
(iii) the information in such Records has been made generally
available to the public other than by disclosure in violation of this
or any other agreement. The Company shall not be required to disclose
any confidential information in such Records to any Inspector until
and unless such Inspector shall have entered into confidentiality
agreements (in form and substance satisfactory to the Company) with
the Company with respect thereto, substantially in the form of this
Section 3(k). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. The Company
shall hold in confidence and shall not make any disclosure of
information concerning an Investor provided to the Company pursuant to
Section 4(e) hereof unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other
order from a court or governmental body of competent jurisdiction or
(iv) such information has been made generally available to the public
other than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information;
(l) use its best efforts either to (i) cause all the
Registrable Securities covered by the Registration Statement to be
listed on a national securities exchange and on each additional
national securities exchange on which similar securities issued by the
Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii)
secure designation of all the Registrable Securities covered by the
Registration Statement as a National Association of Securities Dealers
Automated Quotations System ("Nasdaq") "national market system
security" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the quotation of the Registrable Securities on the Nasdaq National
Market System or, if, despite the Company's best efforts to satisfy
the
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 9
preceding clause (i) or (ii), the Company is unsuccessful in
satisfying the preceding clause (i) or (ii), to secure listing on a
national securities exchange or Nasdaq authorization and quotation for
such Registrable Securities and, without limiting the generality of
the foregoing, to arrange for at least two market makers to register
with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities;
(m) provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later
than the effective date of the Registration Statement;
(n) cooperate with the Investors who hold Registrable
Securities being sold and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing Registrable
Securities to be sold pursuant to the denominations or amounts as the
case may be, and registered in such names as the managing underwriter
or underwriters, if any, or the Investors may reasonably request; and,
within five business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the
Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities
are included in such Registration Statement) instructions to the
transfer agent to issue new stock certificates without a legend and an
opinion of such counsel that the shares have been registered; and
(o) take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement;
4. OBLIGATIONS OF THE INVESTORS. In connection with
the registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement with respect
to each Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration
of the Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably
request. At least fifteen (15) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify
each Investor of the information the Company requires from each such
Investor (the "Requested Information") if such Investor elects to have
any of such Investor's Registrable Securities included in
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the Registration Statement. If within five (5) business days prior to
the filing date the Company has not received the Requested Information
from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation
and filing of the Registration Statement hereunder, unless such
Investor has notified the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities from
the Registration Statement;
(c) With regard to a demand registration pursuant to Section
2(c) hereof, in the event Investors holding a majority in interest of
the Registrable Securities being registered determine to engage the
services of an underwriter, each Investor agrees to enter into and
perform such Investor's obligations under an underwriting agreement,
in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement;
(d) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described
in Section 3(f) or 3(g) or that the Board of Directors of the Company
has determined, in its good faith reasonable judgment, that the
disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities would materially
interfere with, or require the premature disclosure of, any financing,
acquisition or reorganization involving the Company or any of its
subsidiaries, or otherwise would require premature disclosure of any
other material nonpublic information as to which the Company has a
good faith, bona fide business purpose for maintaining its
confidentiality (the "Board of Directors Determination"), such
Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 3(f) or
3(g) and, if so directed by the Company, such Investor shall deliver
to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice; provided,
however, that any restriction on trading resulting from a Board of
Directors Determination shall be limited to a maximum of thirty (30)
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 11
days, and, further, that the Company shall provide the Investors with
written notice regarding any restriction on trading pursuant to this
paragraph within two business days of the Company's determination of
such restriction;
(e) No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Investors entitled hereunder
to approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of
such underwriting arrangements and (iii) agrees to pay its pro rata
share of all underwriting discounts and commissions and other fees and
expenses of investment bankers and any manager or managers of such
underwriting and legal expenses of the underwriter applicable with
respect to its Registrable Securities, in each case to the extent not
payable by the Company pursuant to the terms of this Agreement.
5. EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions and other fees and expenses of
investment bankers and other than brokerage commissions) incurred in
connection with registrations, filings or qualifications pursuant to
Section 3, including, without limitation, all registration, listing
and qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company, shall be borne by the
Company; provided, however, that the Investors shall bear the fees and
out-of-pocket expenses of the one legal counsel selected by the
Investors pursuant to Section 3(h) hereof.
6. INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the officers, if
any, of such Investor, each person, if any, who controls any Investor
within the meaning of the Securities Act or the Exchange Act, any
underwriter (as defined in the Securities Act) for the Investors, the
directors, if any, of such underwriter and the officers, if any, of
such underwriter, and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Exchange
Act (each, an "Indemnified Person"), against any losses, claims,
damages, expenses or liabilities (joint or several) (collectively
"Claims") to which any of them become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations in the Registration Statement, or any
post-effective
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February 25, 1997 Page 12
amendment thereof, or any prospectus included therein: (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
if used prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act or any state securities law or
any rule or regulation (the matters in the foregoing clauses (i)
through (iv) being, collectively, "Violations"). Subject to the
restrictions set forth in Section 6 (d) with respect to the number of
legal counsel, the Company shall reimburse the Investors and each such
underwriter or controlling person, promptly as such expenses are
incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating
or defending any such Claim. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this
Section 6(a) (I) shall not apply to a Claim arising out of or based
upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified
Person or underwriter for such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, if such prospectus was
timely made available by the Company pursuant to Section 3(c) hereof;
(II) with respect to any preliminary prospectus shall not inure to the
benefit of any such person from whom the person asserting any such
Claim purchased the Registrable Securities that are the subject
thereof (or to the benefit of any person controlling such person) if
the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then
amended or supplemented, if such prospectus was timely made available
by the Company pursuant to Section 3(c) hereof; and (III) shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of the Indemnified Persons and shall survive the
transfer of the Registrable Securities by the Investors pursuant to
Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify and
hold harmless, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement,
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 13
each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement
or any of its directors or officers or any person who controls such
stockholder or underwriter within the meaning of the Securities Act or
the Exchange Act (collectively and together with an Indemnified
Person, an "Indemnified Party"), against any Claim to which any of
them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs (i) in reliance upon and in conformity with
written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement or
(ii) the Investor's violation of Rules 10-b-6 or 10-b-7 under the
Exchange Act; and such Investor will promptly reimburse any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent
shall not be unreasonably withheld; provided, further, however, that
the Investor shall be liable under this Section 6(b) for only that
amount of a Claim as does not exceed the net proceeds to such Investor
as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same
extent as provided above, with respect to information such persons so
furnished in writing by such persons expressly for inclusion in the
Registration Statement.
(d) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement
of any action (including any governmental action), such Indemnified
Person or Indemnified Party shall, if a Claim in respect thereof is to
made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof
and this indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume control of the
defense
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 14
thereof with counsel mutually satisfactory to the indemnifying
parties; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and other party represented by
such counsel in such proceeding. The Company shall pay for only one
separate legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification provided
for herein is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts
for which it would otherwise be liable under Section 6 to the fullest
extent permitted by law; provided, however, that (a) no contribution
shall be made under circumstances where the maker would not have been
liable for indemnification under the fault standards set forth in
Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation and (c) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making
available to the Investors the benefits of Rule 144 or any other
similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without
registration, until such time as the Investors have sold all the
Registrable Securities pursuant to a Registration Statement or Rule
144, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 15
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and
the Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have
the Company register Registrable Securities pursuant to this Agreement
shall be automatically assigned by the Investors to transferees or
assignees of all or any portion of such securities only if: (a) the
Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address
of such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (b)
immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities
laws, and (c) at or before the time the Company received the written
notice contemplated by clause (a) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the
provisions contained herein.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and
Investors who hold a majority in interest of the Registrable
Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.
11. THIRD PARTY BENEFICIARY. The parties acknowledge and
agree that Shoreline Pacific, the Institutional Division of Financial
West Group ("Shoreline Pacific"), shall be deemed a third party
beneficiary of the Company's agreements and representations set forth
in this Agreement, entitled to enforce the terms thereof, and to
indemnification for any damages resulting to Shoreline Pacific from
any actual or threatened breach thereof by the Company, both in
Shoreline Pacific's personal capacity and, should Shoreline Pacific so
elect, on behalf of the Investor.
12. MISCELLANEOUS.
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 16
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or
entities with respect to the same Registrable Securities, the Company
shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when
personally delivered or when sent by registered mail, return receipt
requested, addressed (i) if to the Company, to COMFORCE Corporation,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇, CFO; (ii) if to the Initial Investor, at the address set forth
under its name in the Subscription Agreement; and (iii) if to any
other Investor, at such address as such Investor shall have provided
in writing to the Company, or at such other address as each such party
furnishes by notice given in accordance with this Section 12(b), and
shall be effective, when personally delivered, upon receipt; when
delivered by facsimile transmission, upon receipt of confirmation of
transmission; and, when sent by certified mail, four business days
after deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of New York
applicable to the agreements made and to be performed entirely within
such state, without giving effect to rules governing the conflict of
laws. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.
(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to
the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
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COMFORCE Corporation/Global Growth Limited Registration Rights Agreement
February 25, 1997 Page 17
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may
require.
(h) The headings in the Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party hereto
by telephone line facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly
authorized as of day and year first above written.
COMFORCE CORPORATION
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Chief Accounting Officer
GLOBAL GROWTH LIMITED
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Director
