EXECUTION COPY
Exhibit 4.3
Resale
Registration Rights Agreement
between
LABOR READY, INC.,
Lehman
Brothers Inc.,
Wells
Fargo Securities, LLC
and
Gerard
Klauer Mattison & Co., Inc.
Dated
as of June 19, 2002
TABLE OF CONTENTS
Resale
Registration Rights Agreement, dated as of June 19,
2002, among Labor Ready, Inc., a Washington corporation (together with any
successor entity, herein referred to as the “Issuer”),
and Lehman Brothers Inc., Wells Fargo Securities, LLC and Gerard Klauer
Mattison & Co., Inc. (the “Initial
Purchasers”).
Pursuant to the Purchase Agreement, dated
June 13, 2002, between the Issuer and the Initial Purchasers (the “Purchase Agreement”), the Initial
Purchasers have agreed to purchase from the Issuer $65,000,000 aggregate
principal amount of 6.5% Convertible Subordinated Notes due 2007 (the “Notes”) (including $10,000,000 aggregate
principal amount if the initial purchasers exercise their option to purchase
additional Notes, as set forth in the Purchase Agreement). The Notes initially will be convertible into
fully paid, nonassessable common stock, no par value per share, of the
Issuer (the “Common Stock”) on the terms, and subject to the conditions,
set forth in the Indenture (as defined herein). To induce the Initial Purchasers to purchase the Notes, the
Issuer has agreed to provide the registration rights set forth in this
Agreement pursuant to the Purchase Agreement.
The parties hereby
agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Additional Amounts: As defined in Section 3(a) hereof.
Additional Amounts Payment Date: Each June 15 and December 15, commencing
December 15, 2002.
Agreement: This Resale Registration Rights Agreement,
as amended, modified or otherwise supplemented from time to time in accordance
with the terms hereof.
Blue Sky Application: As defined in Section 6(a) hereof.
Broker-Dealer:
Any broker or dealer registered under the Exchange Act.
Business Day: A day other than a Saturday or Sunday or any
day on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.
Closing Date: The date of this Agreement.
Commission: Securities and Exchange Commission.
Common Stock: As
defined in the preamble hereto.
Effectiveness Period: As defined in Section 2(a)(iii) hereof.
Effectiveness Target Date: As defined in Section 2(a)(ii) hereof.
Exchange Act: Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
Holder: A Person who owns, beneficially or
otherwise, Transfer Restricted Securities.
Holder Questionnaire: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated as of June 19, 2002,
between the Issuer and The Bank of New York, as trustee (the “Trustee”), pursuant to which the Notes are
to be issued, as such Indenture is amended, modified or supplemented from time
to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: Each June 15 and December 15 of each year,
commencing December 15, 2002.
Issuer: As defined in the preamble hereto.
Majority of Holders: Holders holding more than 50% of the
aggregate principal amount at maturity of Notes outstanding; provided that, for purpose of this
definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities when issued upon conversion of the Notes shall be deemed
to hold an aggregate principal amount at maturity of Notes (in addition to the
principal amount at maturity of Notes held by such holder) equal to $1,000
times the quotient of (x) the number of such shares of Common Stock received
upon conversion of the Notes and then held by such holder and (y) the
prevailing conversion rate, such prevailing conversion rate as determined in
accordance with the Indenture.
NASD: National Association of Securities Dealers,
Inc.
Notes: As defined in the preamble hereto.
Person: An individual, partnership, corporation,
unincorporated organization, limited liability company, trust, joint venture or
a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Shelf
Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments thereto, including post-effective amendments, and
all material incorporated by reference into such Prospectus.
Purchase Agreement: As defined in the preamble hereto.
Questionnaire Deadline: As defined in Section 2(b) hereof.
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Record Holder: With respect to any Additional Amounts
Payment Date, each Person who is a Holder on the record date with respect to
the Interest Payment Date on which such Additional Amounts Payment Date shall
occur. In the case of a Holder of
shares of Common Stock issued upon conversion of the Notes, “Record Holder”
shall mean each Person who is a Holder of shares of Common Stock which
constitute Transfer Restricted Securities on the 15th day preceding
the relevant Additional Amounts Payment Date.
Registration Default: As defined in Section 3(a) hereof.
Sale Notice: As defined in Section 4(d) hereof.
Securities Act: Securities Act of 1933, as amended, and the
rules and resolutions of the Commission thereunder.
Shelf Filing Deadline:
As defined in Section 2(a)(i) hereof.
Shelf Registration Statement: As defined in Section 2(a)(i) hereof.
Suspension Notice. As defined in Section 4(c) hereof.
Suspension Period. As defined in Section 4(b)(i) hereof.
TIA: Trust Indenture Act of 1939, as amended, and
the rules and regulations of the Commission thereunder, in each case, as in
effect on the date the Indenture is qualified under the TIA.
Transfer Restricted Securities: Each Note and each share of Common Stock
issued upon conversion of Notes until the earlier of:
(i) the date on
which such Note or such share of Common Stock issued upon conversion thereof
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement;
(ii) the date on
which such Note or such share of Common Stock issued upon conversion thereof is
transferred in compliance with Rule 144 under the Securities Act or may be sold
or transferred by a person who is not an affiliate of the Issuer pursuant to
Rule 144 under the Securities Act (or any other similar provision then in
force) without any volume or manner of sale restrictions thereunder; or
(iii) the date on
which such Note or such share of Common Stock issued upon conversion ceases to
be outstanding (whether as a result of redemption, repurchase and cancellation,
conversion or otherwise); provided that any Note and any Common Stock issued
upon conversion of such Note that is redeemed or repurchased by the Company
shall not be deemed Transfer Restricted Securities for purposes of this
Agreement upon resale by the Company.
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Underwritten Registration or Underwritten
Offering: A
registration in which Notes of the Issuer are sold to an underwriter for
reoffering to the public.
2. Shelf Registration. The Issuer shall:
(i) not later
than 90 days after the date hereof (the “Shelf Filing Deadline”), cause to be filed a registration
statement pursuant to Rule 415 under the Securities Act (together with any
amendments thereto, and including any documents incorporated by reference
therein, the “Shelf Registration Statement”), which
Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities held by Holders that have provided the information
required pursuant to the terms of Section 2(b) hereof;
(ii) use its
reasonable best efforts to cause the Shelf Registration Statement to be
declared effective by the Commission not later than 180 days after the date
hereof (the “Effectiveness Target Date”);
and
(iii) use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
4(b) hereof to the extent necessary to ensure that (A) it is available for
resales by the Holders of Transfer Restricted Securities entitled to the
benefit of this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act for a period (the “Effectiveness Period”) of:
(1) two
years following the last date of original issuance of Notes; or
(2) such
shorter period that will terminate when (x) all of the Holders of Transfer
Restricted Securities are able to sell all Transfer Restricted Securities
immediately without restriction pursuant to Rule 144(k) under the Securities
Act or any successor rule thereto, (y) when all Transfer Restricted Securities
have ceased to be outstanding (whether as a result of redemption, repurchase
and cancellation, conversion or otherwise) or (z) all Transfer Restricted
Securities registered under the Shelf Registration Statement have been sold.
(b) To have its Transfer Restricted Securities
included in the Shelf Registration Statement pursuant to this Agreement, each
Holder shall complete the Selling Securityholder Notice and Questionnaire, the
form of which is contained in Annex A to the Offering Memorandum relating to
the Notes (the “Questionnaire”). The Issuer shall mail the Questionnaire not
less than 20 Business Days prior to the time the Company intends in good faith
to have the Shelf Registration Statement declared effective by the Commission. Upon receipt of written request for
additional information from the Issuer, each Holder who intends to be named as
a selling securityholder in the Shelf Registration Statement shall furnish to
the Issuer in writing, within 20 Business Days after such Holder’s receipt of
such request, such additional information regarding such Holder and the
proposed distribution by such Holder of its Transfer Restricted Securities, in
connection with the Shelf Registration Statement or Prospectus
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or Preliminary Prospectus included therein
and in any application to be filed with or under state securities law, as the
Issuer may reasonably request. In
connection with all such requests for information from Holders of Transfer
Restricted Securities, the Issuer shall notify such Holders of the requirements
set forth in this paragraph regarding their obligation to provide the
information requested pursuant to this Section. Holders who have not delivered a Questionnaire prior to the
effectiveness of the Shelf Registration Statement may receive a Questionnaire
from the Company upon request. Upon
receipt of such a completed Questionnaire from a Holder following the
effectiveness of the Shelf Registration Statement, the Company shall, as
promptly as reasonably practicable, file such amendments to the Shelf
Registration Statement or supplements to a related Prospectus as are necessary
to permit such Holder to transfer its Transfer Restricted Securities pursuant
to the Shelf Registration Statement.
Each Holder as to which the Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuer all information required to
be disclosed in order to make information previously furnished to the Issuer by
such Holder not materially misleading.
(a) If:
(i) the Shelf
Registration Statement is not filed with the Commission prior to or on the
Shelf Filing Deadline;
(ii) the Shelf
Registration Statement has not been declared effective by the Commission prior
to or on the Effectiveness Target Date;
(iii) except as
provided in Section 4(b)(i) hereof, the Shelf Registration Statement is filed
and declared effective but, during the Effectiveness Period, shall thereafter
cease to be effective or fail to be usable for its intended purpose without
being succeeded within five Business Days by a post-effective amendment to the
Shelf Registration Statement, a supplement to the Prospectus or a report filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act that cures such failure and, in the case of a post-effective
amendment, is itself immediately declared effective; or
(iv) (A) prior to or on the 45th or 90th
day, as the case may be, of any Suspension Period, such suspension has not been
terminated or (B) Suspension Periods exceed an aggregate of 90 days in any 360
day period,
(each such event referred to in foregoing
clauses (i) through (iv), a “Registration
Default”), the Issuer hereby agrees to pay additional amounts (“Additional Amounts”) with respect to the
Transfer Restricted Securities from and including the day following the
Registration Default to but excluding the day on which the Registration Default
has been cured, accruing at a rate:
(A) in
respect of the Notes, to each holder of Notes, (x) with respect to the first
90-day period during which a Registration Default shall have occurred and be
continuing, equal to 0.25% per annum of the principal amount of the Notes, and
(y) with respect to the period commencing on the 91st day following
the day the Registration Default shall have occurred and be continuing, equal
to
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0.50% per annum of the principal amount of the Notes; provided that in no event shall Additional Amounts accrue at
a rate per year exceeding 0.50% of the Applicable Amount of the Notes; and
(B) in
respect of any shares of Common Stock, to each holder of shares of Common Stock
issued upon conversion of Notes, (x) with respect to the first 90-day period in
which a Registration Default shall have occurred and be continuing, equal to
0.25% per annum of the Applicable Amount of the converted Notes, and (y) with
respect to the period commencing the 91st day following the day the
Registration Default shall have occurred and be continuing, equal to 0.50% per
annum of the Applicable Amount of the converted Notes; provided that in no event shall Additional Amounts accrue at
a rate per year exceeding 0.50% of the Applicable Amount of the converted
Notes.
(b) All accrued Additional Amounts shall be paid
in arrears to Record Holders by the Issuer on each Additional Amounts Payment
Date by wire transfer of immediately available funds or by federal funds
check. Following the cure of all
Registration Defaults relating to any particular Security or share of Common
Stock, the accrual of Additional Amounts with respect to such Security or share
of Common Stock will cease. The Issuer agrees to deliver all notices,
certificates and other documents contemplated by the Indenture in connection
with the payment of Additional Amounts.
All obligations of the Issuer set forth in
this Section 3 that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
The Additional Amounts set forth above shall
be the exclusive monetary remedy available to the Holders of Transfer
Restricted Securities for such Registration Default.
(a) In connection with the Shelf Registration
Statement, the Issuer shall comply with all the provisions of Section 4(b)
hereof and shall use its reasonable best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof, and pursuant
thereto, shall prepare and file with the Commission a Shelf Registration
Statement relating to the registration on any appropriate form under the
Securities Act.
(b) In connection with the Shelf Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities, the Issuer shall:
(i) Subject to
any notice by the Issuer in accordance with this Section 4(b) of the existence
of any fact or event of the kind described in Section 4(b)(iii)(D), use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective during the Effectiveness Period; upon the occurrence of any event
that would cause the Shelf Registration Statement or the
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Prospectus
contained therein (A) to contain a material misstatement or omission or (B) not
be effective and usable for resale of Transfer Restricted Securities during the
Effectiveness Period, the Issuer shall file promptly an appropriate amendment
to the Shelf Registration Statement, a supplement to the Prospectus or a report
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use its reasonable best
efforts to cause such amendment to be declared effective and the Shelf
Registration Statement and the related Prospectus to become usable for their
intended purposes as soon as reasonably practicable thereafter. Notwithstanding the foregoing, the Issuer
may suspend the effectiveness of the Shelf Registration Statement by written
notice to the Holders for a period not to exceed an aggregate of 45 days in any
90-day period (each such period, a “Suspension
Period”) if:
(x) an event occurs and is
continuing as a result of which the Shelf Registration Statement would, in the
Issuer’s reasonable judgment, contain 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; and
(y) the Issuer reasonably
determines that the disclosure of such event at such time would have a material
adverse effect on the business of the Issuer (and its subsidiaries, if any,
taken as a whole);
provided that in the
event the disclosure relates to a previously undisclosed proposed or pending
material business transaction, the disclosure of which would impede the
Issuer’s ability to consummate such transaction, the Issuer may extend a
Suspension Period from 45 days to 90 days; provided,
however, that Suspension Periods shall not exceed an aggregate of 90
days in any 360-day period.
(ii) Prepare and
file with the Commission such amendments and post-effective amendments to the
Shelf Registration Statement as may be necessary to keep the Shelf Registration
Statement effective during the Effectiveness Period; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act, and to comply fully
with the applicable provisions of Rules 424 and 430A under the Securities Act
in a timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all Transfer Restricted Securities covered by the
Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the Prospectus.
(iii) Advise the
underwriter(s), if any, and selling Holders promptly (but in any event within
five Business Days) and, if requested by such Persons, to confirm such advice
in writing:
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(A) when
the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of
any request by the Commission for amendments to the Shelf Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto,
(C) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Shelf Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, or
(D) of
the existence of any fact or the happening of any event, during the Effectiveness
Period, that makes any statement of a material fact made in the Shelf
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Shelf Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any
stop order suspending the effectiveness of the Shelf Registration Statement, or
any state securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Issuer shall use its reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time and will provide to the
Initial Purchasers and each Holder who is named in the Shelf Registration
Statement prompt notice of the withdrawal of any such order.
(iv) Furnish to
each of the selling Holders and each of the underwriter(s), if any, before
filing with the Commission, a copy of the Shelf Registration Statement and
copies of any Prospectus included therein or any amendments or supplements to
the Shelf Registration Statement or Prospectus (other than documents
incorporated by reference after the initial filing of the Shelf Registration
Statement), which documents will be subject to the review of such holders and
underwriter(s), if any, for a period of at least five Business Days (in the
case of the Shelf Registration Statement and Prospectus) and one Business Day
(in the case of any amendment or supplement thereto), and the Issuer will not
file the Shelf Registration Statement or Prospectus or any amendment or
supplement to the Shelf Registration Statement or Prospectus (other than
documents incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by the Shelf Registration Statement or the
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underwriter(s),
if any, shall reasonably object prior to the filing thereof. A selling Holder or underwriter, if any,
shall be deemed to have reasonably objected to such filing if the Shelf
Registration Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission.
(v) Make
available at reasonable times for inspection by one or more representatives of
the selling Holders, designated in writing by a Majority of Holders whose
Transfer Restricted Securities are included in the Shelf Registration
Statement, any underwriter participating in any distribution pursuant to the
Shelf Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Issuer as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the Issuer’s officers, directors, managers and
employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, underwriter, attorney
or accountant in connection with the Shelf Registration Statement after the
filing thereof and before its effectiveness, provided, however, that any information designated by the
Issuer as confidential at the time of delivery of such information shall be
kept confidential by the recipient thereof.
(vi) If requested
by any selling Holders or the underwriter(s), if any, promptly incorporate in
the Shelf Registration Statement or Prospectus, pursuant to a supplement or
post–effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation: (1) information relating to the “Plan
of Distribution” of the Transfer Restricted Securities, (2) information with
respect to the principal amount of Notes or number of shares of Common Stock
being sold to such underwriter(s), (3) the purchase price being paid therefor
and (4) any other terms of the offering of the Transfer Restricted Securities
to be sold in such offering; and make all required filings of such Prospectus
supplement or post–effective amendment as soon as reasonably practicable
after the Issuer is notified of the matters to be incorporated in such
Prospectus supplement or post–effective amendment.
(vii) Furnish to
each selling Holder and each of the underwriter(s), if any, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (and any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in such
exhibits by reference) as such Person may request).
(viii) Deliver to
each selling Holder and each of the underwriter(s), if any, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; subject
to any notice by the Issuer in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in
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Section
4(b)(iii) (D), the Issuer hereby consents to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto.
(ix) The Issuer
shall:
(A) upon request, furnish
to each selling Holder and each underwriter, if any, in such substance and
scope as they may reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings for selling security holders,
upon the date of closing of any sale of Transfer Restricted Securities in an
Underwritten Registration:
(1) a
certificate, dated the date of such closing, signed by the Chief Financial
Officer of the Issuer confirming, as of the date thereof, the matters set forth
in Section 5(g) of the Purchase Agreement and such other matters as such
parties may reasonably request;
(2) opinions,
each dated the date of such closing, of counsel to the Issuer covering such of
the matters as are customarily covered in legal opinions to underwriters in
connection with underwritten offerings of securities; and
(3) customary
comfort letters, dated the date of such closing, from the Issuer’s independent
accountants in the customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with underwritten
offerings of securities;
(B) set forth in full in
the underwriting agreement, if any, indemnification provisions and procedures
which provide rights no less protective than those set forth in Section 6
hereof with respect to all parties to be indemnified; and
(C) deliver such other
documents and certificates as may be reasonably requested by such parties to
evidence compliance with clause (A) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
selling Holders pursuant to this clause (ix).
(x) Before any
public offering of Transfer Restricted Securities, cooperate with the selling
Holders, the underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions in the United
States as the selling Holders or underwriter(s), if any, may reasonably request
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities covered
by the Shelf Registration Statement; provided,
however, that the Issuer shall not be required (A) to register or
qualify as a foreign corporation or a dealer of securities
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where it is
not now so qualified or to take any action that would subject it to the service
of process in any jurisdiction where it is not now so subject or (B) to subject
itself to taxation in any such jurisdiction if it is not now so subject.
(xi) Cooperate
with the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends
(unless required by applicable securities laws); and enable such Transfer
Restricted Securities to be in such denominations and registered in such names
as the Holders or the underwriter(s), if any, may request at least two Business
Days before any sale of Transfer Restricted Securities made by such
underwriter(s).
(xii) Use its
reasonable best efforts to cause the Transfer Restricted Securities covered by
the Shelf Registration Statement to be registered with or approved by such
other U.S. governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities; provided however, that the
Issuer shall not be required to subject itself to taxation in any such
jurisdiction if it is not now so subject..
(xiii) Subject to
Section 4(b)(i) hereof, if any fact or event contemplated by Section
4(b)(iii)(D) hereof shall exist or have occurred, use its reasonable best
efforts to prepare a supplement or post–effective amendment to the Shelf
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
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.
(xiv) Provide CUSIP
numbers for all Transfer Restricted Securities not later than the effective
date of the Shelf Registration Statement and provide the Trustee under the
Indenture with certificates for the Notes that are in a form eligible for
deposit with The Depository Trust Company.
(xv) Cooperate and
assist in any filings required to be made with the NASD and in the performance
of any due diligence investigation by any underwriter that is required to be
retained in accordance with the rules and regulations of the NASD.
(xvi) Otherwise use
its reasonable best efforts to comply with all applicable rules and regulations
of the Commission and all reporting requirements under the Exchange Act.
(xvii) Cause the
Indenture to be qualified under the TIA not later than the effective date of
the Shelf Registration Statement required by this Agreement, and, in connection
therewith, cooperate with the Trustee and the holders of Notes
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to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee thereunder to execute all documents that may be
required to effect such changes and all other forms and documents required to
be filed with the Commission to enable such Indenture to be so qualified in a
timely manner.
(xviii) Cause all
shares of Common Stock covered by the Shelf Registration Statement to be listed
or quoted, as the case may be, on each securities exchange or automated
quotation system on which similar securities issued by the Issuer are then
listed or quoted.
(xix) Provide to
each Holder upon written request each document filed with the Commission
pursuant to the requirements of Section 13 and Section 15 of the Exchange Act
after the effective date of the Shelf Registration Statement.
(xx) If requested
by the underwriters, make appropriate officers of the Issuer available to the
underwriters for meetings with prospective purchasers of the Transfer
Restricted Securities and prepare and present to potential investors customary
“road show” or marketing materials in a manner consistent with other new
issuances of other securities similar to the Transfer Restricted Securities.
(c) Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice (a “Suspension Notice”) from the Issuer of the existence of any
fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will,
and will use its reasonable best efforts to cause any underwriter(s) in an
Underwritten Offering to, forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement until:
(i) such Holder
has received copies of the supplemented or amended Prospectus contemplated by
Section 4(b)(xiii) hereof; or
(ii) such Holder
is advised in writing by the Issuer that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus.
If so directed by the Issuer, each Holder
will deliver to the Issuer (at the Issuer’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice of suspension.
(d) Upon the effectiveness of the Shelf
Registration Statement, each Holder shall notify the Issuer at least three
Business Days prior to any intended distribution of Transfer Restricted
Securities pursuant to the Shelf Registration Statement (a “Sale Notice”), which notice shall be effective for five
Business Days. Each Holder of Transfer
Restricted Securities, by accepting the same, agrees to hold any communication
by the Issuer in response to a Sale Notice in confidence.
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5. Registration Expenses. All expenses incident to the Issuer’s performance of
or compliance with this Agreement shall be borne by the Issuer regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:
(i) all
registration and filing fees and expenses (including filings, if any, required
to be made by any Initial Purchasers or Holders with the NASD);
(ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws;
(iii) all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes) and the Issuer’s
expenses for messenger and delivery services and telephone;
(iv) all fees and
disbursements of counsel to the Issuer and, subject to Section 5(b) below, the
Holders of Transfer Restricted Securities;
(v) all
application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and
(vi) all fees and
disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuer shall bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal, accounting or other duties), the expenses of any
annual audit and the fees and expenses of any Person, including special
experts, retained by the Issuer.
(b) In connection with the Shelf Registration
Statement required by this Agreement, including any amendment or supplement
thereto, and any other documents delivered to any Holders, the Issuer shall
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being registered pursuant to the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements (not to exceed $15,000)
of not more than one counsel, which shall be Simpson Thacher & Bartlett, or
such other counsel as may be chosen prior to the initial filing of the Shelf
Registration Statement by a Majority of Holders for whose benefit the Shelf
Registration Statement is being prepared.
6. Indemnification and Contribution. The Issuer shall indemnify and hold harmless
each Holder, such Holder’s officers, directors, partners and employees and each
person, if any, who controls such Holder within the meaning of the Securities
Act (each, an “Indemnified Holder”),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as
any such loss, claim, damage, liability or action arises out of, or is based
upon:
13
(i) any untrue
statement or alleged untrue statement of a material fact contained in (A) the
Shelf Registration Statement or Prospectus or any amendment or supplement
thereto or (B) any blue sky application or other document or any amendment or
supplement thereto prepared or executed by the Issuer (or based upon written
information furnished by or on behalf of the Issuer expressly for use in such
blue sky application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a “Blue Sky Application”); or
(ii) the
omission or alleged omission to state in the Shelf Registration Statement,
Prospectus or any amendment or supplement thereto, or in any Blue Sky
Application, any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading,
and shall reimburse each Indemnified Holder
promptly upon demand for any legal or other expenses reasonably incurred by
such Indemnified Holder in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided,
however, that the Issuer shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or Prospectus or
amendment or supplement thereto or Blue Sky Application in reliance upon and in
conformity with written information furnished to the Issuer. The foregoing indemnity agreement is in
addition to any liability which the Issuer may otherwise have to any
Indemnified Holder.
(b) Each Holder, severally and not jointly, shall
indemnify and hold harmless the Issuer, its officers, directors and employees
and each person, if any, who controls the Issuer within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Issuer or any such
officer, director, employee or controlling person may become subject, insofar
as any such loss, claim, damage or liability or action arises out of, or is
based upon:
(i) any untrue
statement or alleged untrue statement of any material fact contained in the
Shelf Registration Statement or Prospectus or any amendment or supplement
thereto or any Blue Sky Application; or
(ii) the
omission or the alleged omission to state in the Shelf Registration Statement,
Prospectus or any amendment or supplement thereto, or in any Blue Sky
Application, any 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,
but in each case only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Issuer by or on behalf of such Holder (or its related Indemnified
14
Holder) specifically for use therein, and
shall reimburse the Issuer and any such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by the
Issuer or any such officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Holder may otherwise have to the Issuer and
any such officer, employee or controlling person.
(c) Promptly after receipt by an indemnified
party under this Section 6 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided,
further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 6. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 6 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however,
that a Majority of Holders shall have the right to employ a single counsel to
represent jointly a Majority of Holders and their respective officers,
directors, partners, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by a Majority of Holders against the Issuer under this Section 6, and, if a
Majority of Holders seeking indemnification shall have been advised by legal
counsel that there may be one or more legal defenses available to them and
their respective officers, employees and controlling persons that are different
from or additional to those available to the Issuer and its officers,
directors, employees and controlling persons, the fees and expenses of a single
separate counsel shall be paid by the Issuer.
No indemnifying party shall:
(i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or
(ii) be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the
15
indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this
Section 6 shall for any reason be unavailable or insufficient to hold harmless
an indemnified party under Section 6(a) or 6(b) in respect of any loss, claim,
damage or liability (or action in respect thereof) referred to therein, each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability (or action in respect thereof):
(i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuer from the offering and sale of the Transfer Restricted Securities on the
one hand and a Holder with respect to the sale by such Holder of the Transfer
Restricted Securities on the other, or
(ii) if the
allocation provided by clause (6)(d)(i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 6(d)(i) but also the relative fault of the Issuer on the one
hand and the Holders on the other in connection with the statements or
omissions or alleged statements or alleged omissions that resulted in such
loss, claim, damage or liability (or action in respect thereof), as well as any
other relevant equitable considerations.
The relative benefits received by the Issuer
on the one hand and a Holder on the other with respect to such offering and
such sale shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Notes purchased under the Purchase Agreement
(before deducting expenses) received by the Issuer on the one hand, bear to the
total proceeds received by such Holder with respect to its sale of Transfer
Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuer on the one hand or the Holders on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Issuer and each Holder agree that it would not be just and equitable
if the amount of contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the first sentence of this paragraph (d). The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 6 shall be deemed to include, for
purposes of this Section 6, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities purchased by it were resold
exceeds the amount of any damages which such Holder has otherwise been required
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. 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.
The Holders’ obligations to contribute as provided in this Section 6(d)
are several and not joint.
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7. Rule 144A. In the event the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, the Issuer hereby agrees with each
Holder, for so long as any Transfer Restricted Securities remain outstanding,
to make available to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
8. Participation
in Underwritten Registrations. No Holder may participate in any Underwritten
Registration hereunder unless such Holder:
(i) agrees to
sell such Holder’s Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements; and
(ii) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
9. Selection of Underwriters. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering if
approved by the Issuer. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by a Majority of
Holders whose Transfer Restricted Securities are included in such offering; provided, that such investment bankers and
managers must be reasonably satisfactory to the Issuer.
(a) Remedies. The Issuer acknowledges and agrees that any
failure by the Issuer to comply with its obligations under Section 2 hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Issuer’s obligations under Section 2
hereof.
(b) Actions Affecting
Transfer Restricted Securities. The Issuer shall not take any action with the
purpose of adversely affecting the ability of the Holders of the Transfer
Restricted Securities as a class to include such Transfer Restricted Securities
in a registration undertaken pursuant to this Agreement.
(c) No Inconsistent Agreements. The Issuer will not, on or after the date of
this Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Issuer shall not grant to any of its security
holders (other than the Holders of Transfer Restricted Securities in such
capacity) the right to include any of its securities in the Shelf Registration
Statement provided for in this Agreement other than the Transfer Restricted
Securities. The Issuer has not previously
entered into any agreement (which has not expired or
17
been terminated) granting any registration
rights with respect to its securities to any Person which rights conflict with
the provisions hereof.
(d) Amendments and Waivers. This Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent of
a Majority of Holders or such greater percentage of the Holders as required by
the Indenture.
(e) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand–delivery,
first–class mail (registered or certified, return receipt requested),
telex, facsimile transmission, or air courier guaranteeing overnight delivery:
(i) if to a
Holder, at the address set forth on the records of the registrar under the
Indenture or the transfer agent of the Common Stock, as the case may be; and
(ii) if to the
Issuer:
Labor Ready,
Inc.
1015 A Street
Tacoma,
WA 98402
Attention: Tim Adams
Fax: (800) 587-9257
Telephone: (253) 680-8471
With a copy to:
Preston, Gates
& Ellis LLP
701 Fifth
Avenue, Suite 5000
Seattle,
WA 98104
Attention: Gary J. Kocher
Fax: (206) 623-7022
Telephone: (206) 467-2709
All such notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt acknowledged, if
transmitted by facsimile; and on the next Business Day, if timely delivered to
an air courier guaranteeing overnight delivery.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that (i) this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder and (ii) nothing contained herein shall
be deemed to permit any assignment, transfer or other disposition of Transfer
Restricted
18
Securities in violation of the terms of the
Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities, in
any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
(k) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(l) Entire Agreement. This Agreement is intended by the parties as
a final expression of their 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 with respect to the
registration rights granted by the Issuer with respect to the Transfer
Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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In Witness Whereof,
the parties have executed this Agreement as of the date first written above.
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Labor
Ready, Inc.
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By
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Name:
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Title:
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Lehman
Brothers Inc.
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Wells
Fargo Securities, LLC
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Gerard
Klauer Mattison & Co., Inc.
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By: Lehman Brothers Inc.
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By
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/s/
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Authorized
Representative
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A-1