REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of June 6, 2003,
between Gevity HR, Inc., a Florida corporation (the "Company"), and the
Investors (the "Investors") listed on the Schedule of Investors attached hereto.
The parties to this Agreement are parties to a Preferred Stock
Purchase Agreement, dated April 24, 2003 (the "Purchase Agreement"). In order to
induce the Investors to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement. Unless otherwise provided in this Agreement, capitalized
terms used herein shall have the meanings set forth in Section 8 hereof.
The parties hereto agree as follows:
1. Demand Registrations.
(a) Requests for Registration. The holders of at least a majority of
the Registrable Securities then outstanding may request up to three
registrations under the Securities Act of all or any portion of their
Registrable Securities on Form S-1 or any similar long-form registration as the
Company may elect ("Long-Form Registrations"), and the holders of at least 25%
of the Registrable Securities then outstanding may request an unlimited number
of registrations under the Securities Act of all or any portion of their
Registrable Securities on Form S-3 or any similar short-form registration as the
Company may elect ("Short-Form Registrations"), if available; provided that the
aggregate offering value of the Registrable Securities requested to be
registered in any registration under this Section 1(a) (any "Demand
Registration") must equal at least $10 million in any Long-Form Registration and
at least $2 million in any Short-Form Registration.
All requests for Demand Registrations shall be made by giving
written notice thereof to the Company (a "Demand Notice"). Each Demand Notice
shall specify the approximate number of Registrable Securities requested to be
registered. Within ten business days after receipt of any Demand Notice, the
Company shall give written notice of such requested registration to all other
holders of Registrable Securities and, subject to the terms of Section 1(e)
hereof, shall include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 business days after the delivery of the Company's
notice in accordance with Section 11(k) hereof.
(b) Demand Expenses. The Registration Expenses (as defined in
Section 5(a) hereof) in all Demand Registrations shall be paid by the Company.
(c) Long-Form Registrations. A registration shall not be deemed to
have been effected for purposes of Section 1 and shall not count as one of the
permitted Long-Form Registrations if the applicable registration statement has
not been declared effective and kept effective until the earlier of (i) six
months following the date on which such registration statement was declared
effective and (ii) the sale pursuant to such registration statement of all
Registrable Securities covered thereby; provided that in any event the Company
shall pay all Registration Expenses in connection with any registration
initiated as a Demand Registration whether or not it has become effective and
whether or not such registration has counted as one of the permitted Long-Form
Registrations. All Long-Form Registrations shall be underwritten registrations
unless otherwise requested by the holders of at least a majority of the
Registrable Securities included in the applicable Long-Form Registration.
(d) Short-Form Registrations. Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted to use any applicable
short form and if the managing underwriters (if any) agree to the use of a
Short-Form Registration, and the Company shall use its reasonable efforts to
make Short-Form Registrations on Form S-3 available for the sale of Registrable
Securities. The holders of at least a majority of the Registrable Securities
requested to be included in any Demand Registration that is a Short-Form
Registration may require the Company to file such Short-Form Registration with
the Securities and Exchange Commission in accordance with and pursuant to Rule
415 promulgated under the Securities Act (or any successor rule then in effect)
(a "Shelf Registration"), provided such holders have a bona fide intent, subject
to market conditions, to dispose of the Registrable Securities covered thereby
within 12 months. So long as such Shelf Registration is effective as required
herein and in compliance with the Securities Act and usable for resale of
Registrable Securities, the holders of at least 25% of the Registrable
Securities shall be entitled to demand any number of draw-downs (including
underwritten draw-downs, provided that the aggregate offering value of the
Registrable Securities requested to be included in such underwritten draw-down
must equal at least $2 million) from the shelf and, in connection with any such
draw-down, the Company shall take all customary and reasonable actions that the
Company would take in connection with an underwritten Demand Registration
pursuant to this Section 1 (including, without limitation, all actions referred
to in Section 4 necessary to effectuate such sale in the manner determined by
the holders of at least a majority of the Registrable Securities to be included
in such underwritten draw-▇▇▇▇) as any holder reasonably requests. The Company
shall use its reasonable efforts to cause the registration statement or
statements filed pursuant to a Short-Form Registration to remain effective until
the earlier of (i) the date on which all Registrable Securities included in the
registration statement shall have been sold and (ii) the date which is six
months following the effective date of the applicable Registration Statement,
unless the registration statement is a Shelf Registration, in which case the
date in this clause (ii) shall be 12 months following such effective date.
(e) Priority on Demand Registrations. The Company shall not include
in any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of at least a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of at least a majority of the Registrable Securities
requested to be included in such offering, the Company shall include in such
registration, prior to the inclusion of any securities which are not Registrable
Securities, the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold in an orderly manner within the
price range of such
2
offering, pro rata among the respective holders thereof on the basis of the
amount of Registrable Securities owned by each such holder.
(f) Restrictions on Demand Registrations. The Company shall not be
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration or a previous registration in which the
holders of Registrable Securities were given piggyback rights pursuant to
Section 2.
Notwithstanding the foregoing, the Company may postpone for up to
180 days the filing or the effectiveness of a registration statement for a
Demand Registration if the Company's board of directors determines in its
reasonable good faith judgment that such Demand Registration would reasonably be
expected to have a material adverse effect on any proposal or plan of the
Company or any of its Subsidiaries to engage in any acquisition of assets or any
merger, consolidation, tender offer, reorganization or other material
transaction; provided that in such event, the holders of Registrable Securities
initially requesting such Demand Registration shall be entitled to withdraw such
request and, if such request is withdrawn with respect to a Long-Form
Registration, such Demand Registration shall not count as one of the permitted
Long-Form Registrations hereunder and the Company shall pay all Registration
Expenses in connection with such registration. The Company may delay a Demand
Registration hereunder only once in any twelve-month period.
(g) Selection of Underwriters. The holders of a majority of the
Registrable Securities included in any Demand Registration shall have the right
to select the investment banker(s) and manager(s) to administer the offering;
provided, however, that such banker(s) and manager(s) must be reasonably
acceptable to the Company (its acceptance not to be unreasonably withheld or
delayed).
(h) Other Registration Rights. The Company represents and warrants
that it is not a party to, or otherwise subject to, any other agreement granting
registration rights to any other Person with respect to any securities of the
Company. Except as provided in this Agreement, the Company shall not grant to
any Person the right to request the Company to register any equity securities of
the Company, or any securities convertible or exchangeable into or exercisable
for such securities, without the prior written consent of the holders of at
least a majority of the Registrable Securities; provided that without such
consent the Company may grant rights to other Persons to participate in
Piggyback Registrations so long as such rights are subordinate to the rights of
the holders of Registrable Securities with respect to such Piggyback
Registrations as provided in Sections 2(c) and 2(d) below. Any securities (other
than Registrable Securities) as to which the Company has granted contractual
registration rights shall be referred to as "Other Securities."
(i) Liquidity Event Registration. Any Liquidity Event Registration
shall be deemed a Demand Registration hereunder (including, without limitation,
for purposes of Section 5 and Section 6); provided that (i) in no event shall a
Liquidity Event Registration be deemed a Long-Form Registration and (ii) the
Company shall have the right to select the investment banker(s) and manager(s)
to administer the offering; provided, however, that such banker(s) and
manager(s) must be reasonably acceptable to the Company (its acceptance not to
be unreasonably withheld or delayed).
3
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
any of its securities under the Securities Act other than pursuant to a Demand
Registration and other than in connection with the registration of equity
securities issued or issuable pursuant to an employee equity option, purchase,
bonus or similar plan or pursuant to a merger, exchange offer or transaction of
the type specified in Rule 145(a) under the Securities Act, and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company shall give prompt written notice to all
holders of Registrable Securities of its intention to effect such a registration
and shall (subject to Sections 2(c) and 2(d)) include in such registration (and
in all related registrations or qualifications under blue sky laws or in
compliance with other registration requirements and in any related underwriting)
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 20 days after the receipt of the
Company's notice.
(b) Piggyback Expenses. The Registration Expenses in all Piggyback
Registrations shall be paid by the Company.
(c) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the Company, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares requested to be included therein by each such holder, and (iii) the Other
Securities requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders initially requesting
such registration, the Company shall include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included in such
registration, pro rata among the holders of such securities on the basis of the
number of securities so requested to be included therein, and (ii) second, the
Other Securities requested to be included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be approved by the holders of at least a majority of the
Registrable Securities included in such Piggyback Registration, which such
approval shall not be unreasonably withheld or delayed.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company
4
shall not file or cause to be effected any other registration of any of its
equity securities or securities convertible or exchangeable into or exercisable
for its equity securities under the Securities Act (except pursuant to a
registration on Form ▇-▇, ▇▇▇▇ ▇-▇ or any successor form), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least 90 days has elapsed from the effective date of such previous
registration.
3. Holdback Agreements.
(a) Holders of Registrable Securities. Each holder of Registrable
Securities shall not effect any public sale or distribution (including sales
pursuant to Rule 144 promulgated under the Securities Act) of equity securities
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during (i) with respect to any underwritten
Demand Registration or any underwritten Piggyback Registration in which
Registrable Securities are included, the seven days prior to and the 90-day
period beginning on the effective date of such registration (or such shorter
period as agreed to by the managing underwriters), and (ii) upon notice from the
Company of the commencement of an underwritten distribution in connection with
any Shelf Registration, the seven days prior to and the 90-day period beginning
on the date of commencement of such distribution (or such shorter period as
agreed to by the managing underwriters), in each case except as part of such
underwritten registration and in each case unless the underwriters managing the
registered public offering otherwise agree.
(b) The Company (i) shall not effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities (except pursuant to registration on Form ▇-▇,
▇▇▇▇ ▇-▇ or any successor form), during (A) with respect to any underwritten
Demand Registration or any underwritten Piggyback Registration in which
Registrable Securities are included, the seven days prior to and the 90-day
period (or such shorter period as agreed to by the underwriters) beginning on
the effective date of such registration, and (B) upon notice from any holder(s)
of Registrable Securities subject to a Shelf Registration that such holder(s)
intend to effect an underwritten distribution of Registrable Securities pursuant
to such Shelf Registration (upon receipt of which, the Company will promptly
notify all other holders of Registrable Securities of the date of commencement
of such distribution), the seven days prior to and the 90-day period (or such
shorter period as agreed to by the underwriters) beginning on the date of
commencement of such distribution, and (ii) shall cause each holder or group of
affiliated holders who purchases from the Company at any time after the date of
this Agreement at least 10% of its Common Stock, or any securities convertible
into or exchangeable or exercisable for at least 10% of its Common Stock, (other
than purchases in a registered public offering or pursuant to an underwritten
offering under Rule 144A or pursuant to equity subscription agreements, stock
option agreements, stock appreciation rights, phantom stock plans or similar
rights or plans in effect on the date of this Agreement) (a "Private Purchaser")
to agree not to effect any public sale or distribution (including sales pursuant
to Rule 144) of any such securities during such 90 day periods (or such shorter
or longer periods as provided below) so long as (x) the holders of Registrable
Securities continue to hold at least 50% of the Registrable Securities held as
of the date hereof (provided that a Private Purchaser shall be subject to such
periods only twice in any twelve-month period) and (y) such Private Purchaser
has entered into an agreement with the Company limiting such Private Purchaser's
right or ability to effectuate a public sale or distribution during an
underwritten registered offering by the Company (provided that such Private
Purchaser shall be limited for the same period of time that
5
it is limited by with respect to an underwritten registered offering by the
Company (which may be greater or less than the 90 day period set forth above),
in each case except as part of such underwritten registration and in each case
unless the underwriters managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as practicable:
(a) prepare and file with the Securities and Exchange Commission a
registration statement, and all amendments and supplements thereto and related
prospectuses as may be necessary to comply with applicable securities laws, with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed, and the Company shall in good faith
consider any comments of such counsel);
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 180 days (or, in the case of a Shelf Registration, a period
ending on the earlier of (i) the date on which all Registrable Securities have
been sold pursuant to the Shelf Registration or have otherwise ceased to be
Registrable Securities and (ii) the first anniversary of the effective date of
such Shelf Registration) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of the prospectus included in such registration statement (including each
preliminary prospectus), each amendment and supplement thereto and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
6
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its reasonable
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, use its reasonable efforts to
arrange for at least two market makers to register as such with respect to such
Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including preparing for and participating in such number
of "road shows" as the underwriters managing such offering may reasonably
request);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement (unless the
Company can demonstrate that such Person already possesses the requested
information);
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the
7
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing in a timely manner, which in the reasonable judgment of such
holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its reasonable efforts promptly to obtain
the withdrawal of such order;
(m) use its reasonable efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and
(n) in the case of an underwritten offering, use reasonable efforts
to obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters as the holders of at least a majority of the
Registrable Securities being sold reasonably request.
5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and, to the
extent provided in Section 5(b), fees and disbursements of counsel for any
holder of Registrable Securities and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne by the Company as provided in this
Agreement, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance
which the Company has agreed to obtain in its reasonable discretion and the
expenses and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by the Company are then listed or on
the NASD automated quotation system.
(b) In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration for work customarily performed by counsel for
selling shareholders.
(c) To the extent any expenses relating to a registration hereunder
are not required to be paid by the Company, each holder of securities included
in any registration hereunder shall pay those expenses allocable to the
registration of such holder's securities so
8
included, and any expenses not so allocable shall be borne by all sellers of
securities included in such registration in proportion to the aggregate selling
price of the securities to be so registered.
(d) Any obligation to pay Registration Expenses or other expenses
provided for in this Agreement shall survive the termination of this Agreement.
6. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers, directors, employees,
agents, Affiliates and each Person who controls such holder (within the meaning
of the Securities Act and the Securities Exchange Act) against all losses,
claims, actions, damages, liabilities and expenses caused by (i) any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and to pay to each holder of
Registrable Securities, its officers and directors and each Person who controls
such holder (within the meaning of the Securities Act), as incurred, any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, except
insofar as the same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has furnished such
holder with such number of copies of the same as was previously requested by
such holder. In connection with an underwritten offering, the Company shall
indemnify such underwriters, their officers, directors, employees, agents and
each Person who controls such underwriters (within the meaning of the Securities
Act and the Securities Exchange Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities, but the
provisions of the underwriting agreement with such underwriters, if different,
shall govern.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors, officers, employees, agents, Affiliates and each Person who controls
the Company (within the meaning of the Securities Act and the Securities
Exchange Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in writing by
such holder; provided that the obligation to indemnify shall be individual and
ratable, not joint and several, for each holder and shall be limited to the net
amount of proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
9
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicting indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration, at the expense of the
indemnifying party. No indemnifying party, in the defense of such claim or
litigation, shall, except with the consent of each indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director, employee, agent,
Affiliate or controlling Person of such indemnified party and shall survive the
transfer of securities and the termination of this Agreement. The Company also
agrees to make such provisions, as are reasonably requested by any indemnified
party, for contribution to such party in the event the Company's indemnification
is unavailable for any reason.
7. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder that is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements in a timely manner;
provided that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties regarding
such holder, such holder's title to the securities and such holder's intended
method of distribution) or to undertake any indemnification obligations to the
Company or the underwriters with respect thereto, except as otherwise provided
in Section 6 hereof.
8. Definitions.
"Affiliate" of any particular Person means (i) any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the
10
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities,
contract or otherwise and (ii) if such Person is a partnership or limited
liability company, any partner or member thereof.
"Certificate of Designation" means the Certificate of Designation
filed with respect to the Company's Series A Preferred Stock on June 9, 2003, as
amended from time to time in accordance with its terms.
"Company" has the meaning given to such term in the recitals.
"Demand Notice" has the meaning given to such term in Section 1(a).
"Demand Registration" has the meaning given to such term in Section
1(a).
"Governmental Entity" means a domestic (federal, state, municipal or
local) or foreign government or governmental, regulatory or administrative
subdivision, department, authority, agency, commission, board, bureau, court of
instrumentality or arbitrator of any kind.
"Investors" has the meaning given to such term in the recitals.
"Liquidity Event Registration" means any underwritten public
offering pursuant to Section 5(a)(ii) of the Certificate of Designation.
"Long-Form Registrations" has the meaning given to such term in
Section 1(a).
"Other Securities" has the meaning given to such term in Section
1(h).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a Governmental Entity.
"Piggyback Registration" has the meaning given to such term in
Section 2(a).
"Private Purchaser" has the meaning given to such term in Section
3(b).
"Purchase Agreement" has the meaning given to such term in the
recitals.
"Registration Expenses" has the meaning given to such term in
Section 5(a).
"Registrable Securities" means (i) any Common Stock issued upon the
conversion of any Preferred Stock issued pursuant to the Purchase Agreement and
(ii) any Common Stock issued or issuable with respect to any Registrable
Securities by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when they have been distributed to the
public pursuant to an offering registered under the Securities Act, sold to the
public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force) or repurchased by
the Company or any Subsidiary. For purposes of this Agreement, including
11
exercising any rights or meeting any threshold tests hereunder, a Person shall
be deemed to hold any Registrable Securities and such Registrable Securities
shall be deemed to be in existence, whenever such Person has the right to
acquire directly or indirectly such Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected, and such Person
shall be entitled to exercise the rights of a holder of Registrable Securities
hereunder.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body
or agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal law then in force.
"Shelf Registration" has the meaning given to such term in Section
1(d).
"Short-Form Registrations" has the meaning given to such term in
Section 1(a).
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. Notwithstanding the
foregoing, "Subsidiary" also shall include each "significant subsidiary" of the
Company, as such term is defined in Rule 1-02 of Regulation S-X. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity. For purposes of this Agreement, if the context does not otherwise
specify in respect of which Person the term "Subsidiary" is used, the term
"Subsidiary" shall refer to a Subsidiary of the Company.
Unless otherwise stated, other capitalized terms contained herein
have the meanings set forth in the Purchase Agreement.
9. Termination. Except as otherwise provided herein, this Agreement
shall terminate at such time as no holder of Registrable Securities has any
rights hereunder.
12
10. Miscellaneous.
(a) Aggregation. For purposes of this Agreement, all holdings of
Registrable Securities by Persons who are Affiliates of each other shall be
aggregated for purposes of meeting any threshold tests under this Agreement. For
purposes of this Section 10(a), an "Affiliate" shall include any Persons which
have received distributions of securities from a partnership or limited
liability company holding such securities.
(b) No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.
(c) Current Public Information. The Company shall file all reports
required to be filed by it under the Securities Act and the Securities Exchange
Act and the rules and regulations adopted by the Securities and Exchange
Commission thereunder and shall take such further action as any holder or
holders of Registrable Securities may reasonably request, all to the extent
required to enable such holders to sell Registrable Securities pursuant to Rule
144 adopted by the Securities and Exchange Commission under the Securities Act
(as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission. Upon
request, the Company shall deliver to any holder of Registrable Securities a
written statement as to whether it has complied with such requirements. The
Company shall at all times use its best efforts to cause the Common Stock into
which the Preferred Stock is convertible to be listed on one or more of the New
York Stock Exchange, the American Stock Exchange or the NASDAQ National Market
System.
(d) Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
(e) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that, in
addition to any other rights and remedies existing in its favor, any party shall
be entitled to specific performance and/or other injunctive relief from any
court of law or equity of competent jurisdiction (without posting any bond or
other security) in order to enforce or prevent violation of the provisions of
this Agreement.
(f) Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or modified and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of a majority of the Registrable Securities outstanding
at the time the amendment or waiver becomes effective; provided that if
13
any such amendment, modification or waiver is to a provision in this Agreement
that requires a specific vote to take an action thereunder or to take an action
with respect to the matters described therein, such amendment, modification or
waiver shall not be effective unless such vote is obtained with respect to such
amendment, modification or waiver. No other course of dealing between the
Company and the holder of any Registrable Securities or any delay in exercising
any rights hereunder shall operate as a waiver of any rights of any such
holders. For purposes of this Agreement, Registrable Securities held by the
Company or any Subsidiaries shall not be deemed to be outstanding.
(g) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(h) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(i) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts (including by means of telecopied signature pages), any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same Agreement.
(j) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a substantive part of
this Agreement. Whenever required by the context, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns, pronouns, and verbs shall include the plural
and vice versa. Reference to any agreement, document, certificate, or instrument
means such agreement, document, certificate or instrument as the same is
amended, waived or otherwise modified from time to time in accordance with the
terms thereof and, if applicable, hereof. Except as otherwise provided in this
Agreement, words such as "herein," "hereunder," "hereof" and the like shall be
deemed to refer to this Agreement as a whole and not to any particular document
or article, Section, paragraph or other portion of a document. The use of the
words "include" or "including" in this Agreement shall be by way of example
rather than by limitation. The use of the words "or," "either" or "any" shall
not be exclusive.
(k) Governing Law. The corporate law of the State of Florida shall
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or
14
conflict of law rules or provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(l) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, telecopied to the recipient (with hard copy sent by overnight
courier in the manner provided hereunder) if sent prior to 4:00 p.m. Chicago
time on a business day (and otherwise, on the immediately succeeding business
day), one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid) or three business days after being mailed to
the recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications shall be sent to
each Investor at the address indicated on the Schedule of Investors and to the
Company at the address indicated below:
Gevity HR, Inc.
600 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(m) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the State of Illinois or the jurisdiction in which the Company's principal
office is located, the time period shall automatically be extended to the
business day immediately following such Saturday, Sunday or legal holiday.
15
(n) Delivery by Facsimile. This Agreement, the agreements referred
to herein and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute originals forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
* * * * *
16
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
THE COMPANY: GEVITY HR, INC.
-----------
By:
--------------------------------------
Its:
--------------------------------------
INVESTORS: FRONTENAC VIII LIMITED PARTNERSHIP
---------
By: FRONTENAC VIII PARTNERS, L.P.
Its: General Partner
By: FRONTENAC COMPANY VIII, L.L.C.
Its: General Partner
By:
--------------------------------------
Its:
--------------------------------------
FRONTENAC MASTERS VIII LIMITED PARTNERSHIP
By: FRONTENAC VIII PARTNERS, L.P.
Its: General Partner
By: FRONTENAC COMPANY VIII, L.L.C.
Its: General Partner
By:
--------------------------------------
Its:
--------------------------------------
SUNTRUST EQUITY FUNDING, LLC DBA
SUNTRUST EQUITY PARTNERS
By:
--------------------------------------
Its:
--------------------------------------
BVCF IV, L.P.
By: ▇.▇. ▇▇▇▇ ASSOCIATES, LLC
Its: General Partner
By: ▇▇▇▇▇▇▇ VENTURE MANAGEMENT, LLC
Its: Attorney-in-fact
By: ▇▇▇▇▇ STREET PARTNERS, LLC
Its: Administrative Member
By:
--------------------------------------
Its:
--------------------------------------
C&B Capital, L.P.
By: C&B CAPITAL GP, LLC
Its: General Partner
By:
--------------------------------------
Its:
--------------------------------------
2
SCHEDULE OF INVESTORS
Name and Address:
Frontenac VIII Limited Partnership
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Frontenac Masters VIII Limited Partnership
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
each with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SunTrust Equity Funding, LLC DBA
SunTrust Equity Partners
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
King & Spalding LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BVCF IV, L.P.
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
C&B Capital, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
2