EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of May 18, 1998,
by and among Monroe, Inc., a Delaware corporation (the "Company"), and each of
the holders named on the signature pages hereto (collectively, the "Holders" and
each individually, a "Holder").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the following
meanings:
"Authorizing Certificate" has the meaning set forth in Section 2(b).
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"Business Day" means any day other than a day on which banks are authorized
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or required to be closed in the State of New York.
"Commission" means the Securities and Exchange Commission.
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"Common Shares" means (i) the 1,500 shares of Common Stock received by
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Monroe & Company II, LLC pursuant to the subscription letter dated March 4, 1998
and (ii) the 300 shares of Common Stock received by Xxxxxx X. Xxxxxxx pursuant
to the subscription letter dated April 8, 1998, together with any shares of
Common Stock or any other class of capital stock of the Company received in
respect of such shares, by stock split, stock dividend, exchange,
recapitalization, reclassification or otherwise.
"Common Stock" means the common stock, par value $.01 per share, of the
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Company.
"Company" has the meaning set forth in the preamble and shall include the
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Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 7(a).
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"Damages" has the meaning set forth in Section 7(a).
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"Demand Registration Statement" has the meaning set forth in Section 2(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
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"Person" means any individual, corporation, partnership, limited liability
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company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement
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(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Common Shares except for (i) Common
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Shares the sale of which is covered by a Registration Statement that has been
declared effective under the Securities Act and (ii) Common Shares which cease
to be outstanding.
"Registration Expenses" has the meaning set forth in Section 6.
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"Registration Statement" means any registration statement of the Company
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that covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended from time to
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time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Selling Stockholders" has the meaning set forth in Section 2(a).
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"Suspension Notice" has the meaning set forth in Section 5.
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"Suspension Period" has the meaning set forth in Section 5.
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SECTION 2. DEMAND REGISTRATIONS.
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On any two (2) occasions after the date which is one hundred eighty (180)
days after the consummation by the Company of an initial public offering of
Common Stock, subject to the conditions set forth in this Agreement, including
without limitation the conditions set forth in Section 2(b) below, Holders
holding at least forty percent (40%) of the Registrable Securities then held by
all Holders may request that the Company cause to be filed with the Commission
and cause to become effective a registration statement (a "Demand Registration
Statement") under the Securities Act relating to the sale by such Holders of
their Registrable
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Securities in accordance with the terms hereof. Upon receipt of any such
request, the Company shall give written notice of such proposed registration to
all Holders of Registrable Securities. Such Holders shall have the right, by
giving written notice to the Company within fifteen (15) business days after
such notice referred to in the preceding sentence has been given by the Company,
to elect to have included in the Demand Registration Statement such of their
Registrable Securities as each Holder may request in such notice of election.
Thereupon, the Company shall as soon as practicable thereafter cause such Demand
Registration Statement to be filed and declared effective by the Commission for
all Registrable Securities which the Company has been requested to register. The
Company shall in no event be obligated to effect under this Section 2 more than
two (2) demand registrations. If the managing underwriter of an underwritten
offering with respect to which registration has been requested by any Holder
pursuant to this Section 2 has advised the Company that, in such underwriter's
good faith judgment, the number of securities to be sold in such offering by
persons other than the Company (collectively, "Selling Stockholders") is greater
than the number which can be offered without adversely affecting such offering,
then the Company may reduce the number of securities to be included in such
offering for the accounts of Selling Stockholders to a number deemed
satisfactory by the managing underwriter, provided, however, that the securities
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to be excluded shall be determined in the following order of priority: first,
securities held by any Selling Stockholder not having contractual, incidental
registration rights; second, securities held by any Selling Stockholder (not
including the Holders) participating in such offering pursuant to the exercise
of contractual piggyback registration rights (other than pursuant to the
Registration Rights Agreement by and among the Company and the stockholders of
Xxxxxxx Enterprises, Inc. (the "Xxxxxxx Agreement"), as determined on a pro rata
basis (based upon the aggregate number of securities held by such Selling
Stockholders); and third, securities held by (i) any Selling Stockholder
participating in such offering pursuant to the exercise of piggyback
registration rights under the Xxxxxxx Agreement and (ii) any Holder
participating in such registration pursuant to the exercise of the demand
registration rights set forth in this Section 2, as determined on a pro rata
basis (based upon the aggregate number of securities held by such Selling
Stockholders and such Holders).
SECTION 3. PIGGY-BACK REGISTRATIONS.
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(a) If at any time or times after the date hereof the Company shall
determine to register under the Securities Act any shares of Common Stock (other
than in connection with a registration on Form S-4 or S-8 (or then equivalent
forms) or a registration statement filed in connection with an exchange offer or
offering of securities solely to the Company's existing securityholders) and the
form of registration statement to be used permits the registration of
Registrable Securities, then the Company shall promptly give written notice of
such proposed registration to the Holders (but in no event less than thirty (30)
days prior to the anticipated effective date of the registration statement). If
within twenty (20) days after the receipt of such notice the Company receives a
written request from any Holder for the inclusion in such registration of some
or all of the Registrable Securities held by such Holder (which request shall
specify the number of Registrable Securities intended to be disposed of by such
Holder
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and the intended method of distribution thereof), the Company shall use all
commercially reasonable efforts to cause such Registrable Securities to be
included in such registration on the same terms and conditions as any similar
securities of the Company or any other securityholder included therein and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. The Company may
withdraw a registration under this Section 3 at any time prior to the time it
becomes effective, provided that the Company shall give prompt notice of such
withdrawal to the Holders which requested to be included in such registration.
(b) In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include a Holder's
Registrable Securities in the underwritten offering unless such Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by the Company. If the managing underwriter of an
underwritten offering with respect to which registration has been requested by
any Holder pursuant to this Section 3 has advised the Company in writing that,
in such underwriter's good faith judgment, the number of securities to be sold
in such offering by Selling Stockholders is greater than the number which can be
offered without adversely affecting such offering, then the Company may reduce
the number of securities to be included in such offering for the accounts of
Selling Stockholders (including the Holders) to a number deemed satisfactory by
the managing underwriter, provided, however, that the securities to be excluded
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shall be determined in the following order of priority: first, securities held
by any Selling Stockholder not having contractual, incidental registration
rights; and second, securities held by any Selling Stockholder (including the
Holders) participating in such offering pursuant to the exercise of contractual
piggyback registration rights, as determined on a pro rata basis (based upon the
aggregate number of securities held by such Selling Stockholders).
(c) Each Holder hereby agrees that such Holder may not participate in any
underwritten offering hereunder unless such Holder (i) agrees to sell such
Holder's Registrable Securities on the basis provided in the underwriting
arrangements for such offering, and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of the underwriting
arrangements.
SECTION 4. REGISTRATION PROCEDURES.
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In connection with the obligations of the Company to register Registrable
Securities pursuant to the terms and conditions of this Agreement:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities Act,
which form shall comply as to form in all materials respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith.
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(b) The Company shall (i) prepare and file with the Commission such
amendments and post-effective amendments to any Registration Statement as
may be necessary to keep such Registration Statement effective until the
earlier of (A) one hundred eighty (180) days following the effectiveness of
such Registration Statement; provided, however, that such 180-day period
shall be extended by the number of days for which any Suspension Period is
in effect during the effectiveness of such Registration Statement, or (B)
the completion of the proposed offering of Registrable Securities pursuant
to such Registration Statement, (ii) cause the prospectus included in such
Registration Statement to be supplemented by any required prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under
the Securities Act and (iii) comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement.
(c) The Company shall furnish to any Holder, without charge, such
number of conformed copies of any Registration Statement and any post-
effective amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or supplements
thereto, as such Holder may reasonably request in order to facilitate the
sale of such Holder's Registrable Securities.
(d) The Company shall use all commercially reasonable efforts to
register or qualify the Registrable Securities covered by any Registration
Statement under such other securities or "blue sky" laws of such states of
the United States as any Holder reasonably requests; provided, however,
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that the Company shall not be required (i) to qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) to file any general consent to
service of process, or (iii) to subject itself to taxation in any
jurisdiction where it would not otherwise be subject to taxation.
(e) The Company shall promptly notify each Holder of the happening of
any event which makes any statement made in any Registration Statement or
related Prospectus untrue or which requires the making of any changes in
such Registration Statement or Prospectus so that it will not contain any
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 under which they were made, not misleading,
and promptly following expiration of any Suspension Period (as defined in
Section 5), the Company shall prepare and file with the Commission and
furnish a supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(f) The Company shall use all commercially reasonable efforts to
prevent the issuance of any order suspending the effectiveness of any
Registration Statement,
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and, if one is issued, the Company shall use all commercially reasonable
efforts to obtain the withdrawal of such order as promptly as practicable.
(g) The Company shall cause the Registrable Securities included in any
Registration Statement to be listed on the New York Stock Exchange or such
other securities exchange on which similar securities issued by the Company
are then listed.
SECTION 5. SUSPENSION PERIOD.
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Each Holder, upon receipt of any notice (a "Suspension Notice") from the
Company of the happening of any event of the kind described in Section 4(e) or
of any event which, in the Company's reasonable business judgment, could become
such an event, shall immediately discontinue disposition of the Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(e) (the period from the date on which such
Holder receives a Suspension Notice to the date on which such Holder receives
copies of the supplemented or amended Prospectus is referred to herein as the
"Suspension Period"). If so directed by the Company, each Holder will deliver
to the Company all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities that
is current at the time of receipt of such notice. In the event that the Company
shall give any Suspension Notice, the Company shall use commercially reasonable
efforts and take such actions as are reasonably necessary to end the Suspension
Period as promptly as practicable.
SECTION 6. REGISTRATION EXPENSES.
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Subject to the proviso below, any and all expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation Commission and securities exchange registration and filing fees,
reasonable fees and expenses of one legal counsel for the Holders, fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws, printing expenses, fees and expenses incurred in connection with the
listing of the Registrable Securities and fees and disbursements of counsel for
the Company and of the independent certified public accountants of the Company
(all such expenses being herein called "Registration Expenses"), will be borne
by the Company; provided, however, that Registration Expenses shall not include
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(a) underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of Registrable Securities, (b) any fees or expenses
of any counsel, accountants or other persons retained or employed by the Holders
(other than the fees and expenses of one legal counsel as provided above), or
(c) out-of-pocket expenses of the Holders and their agents, including, without
limitation, any travel costs.
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SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
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(a) Indemnification by the Company. The Company agrees to indemnify and
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hold harmless, to the full extent permitted by law, each Holder, its officers,
directors, trustees, employees and agents and each Person, if any, which
controls such Holder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, (collectively, "Controlling Persons"),
from and against all losses, claims, damages, liabilities and expenses
(including without limitation any legal or other fees and expenses reasonably
incurred by any Holder or any such Controlling Person in connection with
defending or investigating any action or claim in respect thereof)
(collectively, "Damages") to which any of them may become subject under the
Securities Act or otherwise, insofar as such Damages arise out of or are based
upon (i) any untrue or alleged untrue statement of material fact contained in
any Registration Statement (including any related preliminary or final
Prospectus) pursuant to which Registrable Securities were registered under the
Securities Act, or (ii) any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
Damages arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company by such Holder expressly for use therein.
(b) Indemnification by the Holders. Each Holder agrees to indemnify and
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hold harmless, to the full extent permitted by law, the Company, its directors,
officers, employees and agents and each Controlling Person of the Company, from
and against any and all Damages to which any of them may become subject under
the Securities Act or otherwise to the same extent as the foregoing indemnity
from the Company to such Holder, but only to the extent such Damages arise out
or are based upon any untrue statement or omission or alleged untrue statement
or omission based upon information furnished to the Company in writing by such
Holder expressly for use in any Registration Statement. In no event shall the
liability of any Holder for indemnification under this Section 7(b) in its
capacity as such (and not in such Holder's capacity as an officer or director of
the Company) exceed the proceeds received by such Holder from the sale of
Registrable Securities under such Registration Statement.
(c) Indemnification Procedures. In case any proceeding (including any
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governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceedings and shall pay the fees and
disbursements of such counsel relating to such proceeding. The failure or delay
of an indemnified party to notify the indemnifying party with respect to a
particular proceeding shall not relieve the indemnifying party from any
obligation or liability which it may have pursuant
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to this Agreement if the indemnifying party is not prejudiced by such failure or
delay. In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent. No indemnifying party shall, without the prior written consent of any
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the subject
matter of such proceeding.
(d) Contribution. To the extent that the indemnification provided for in
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paragraph (a) or (b) of this Section 7 is held by a court of competent
jurisdiction to be unavailable to an indemnified party in respect of any
Damages, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such Damages (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand, and each Holder on the other, from the offering of
the Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Holders, on the
other, in connection with the statements or omissions which resulted in such
Damages, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Holders on the other hand shall
be determined by reference to, among other things, 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 Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
If indemnification is available under paragraph (a) or (b) of this Section
7, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in such paragraphs without regard to the relative benefits to or
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 7(d).
The Company and each Holder agrees that it would not be just or equitable
if contribution pursuant to this Section 7(d) were determined by pro rata
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allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the Damages referred to in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred (and
not otherwise reimbursed) by such indemnified party in connection with
investigating or defending any such action or claim. In no event shall any
Holder be required to contribute an amount under this Section 7(d) in excess of
the proceeds received by such Holder from the sale of Registrable Securities
under the relevant Registration Statement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
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Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
SECTION 8. INFORMATION FURNISHED BY HOLDERS.
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Each Holder shall furnish to the Company such information regarding such
Holder and such Holder's intended method of distribution of the Registrable
Securities as the Company may from time to time reasonably request in writing in
order to comply with the Securities Act and the provisions of this Agreement.
Each Holder agrees (a) to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by the Holder to the
Company or of the occurrence of any event, in either case as a result of which
any Prospectus contains or would contain an untrue statement of a material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities or omits or would omit to state any material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and (b) to promptly furnish to the Company any additional information required
to correct and update any previously furnished information or required so that
the Prospectus shall not contain, with respect to the Holder or the Holder's
intended method of distribution of the Registrable Securities, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.
SECTION 9. MISCELLANEOUS.
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(a) Amendments and Waivers. The provisions of this Agreement, including
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the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Holders of a
majority in interest of the Registrable Securities then outstanding.
(b) Notices. All notices and other communications provided for or
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permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by registered or certified mail (return
receipt requested), postage prepaid or courier to the parties at their
respective addresses set forth on the signature pages hereof (or at such other
address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been received: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; and on the next
Business Day if timely delivered to a courier guaranteeing overnight delivery.
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(c) Successors and Assigns. This Agreement shall inure to the benefit of
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and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable 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 and such person shall be entitled to
received the benefits hereof.
(d) Counterparts. This Agreement may be executed in any number of
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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.
(e) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
(g) Severability. In the event that any one or more of the provisions
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contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(h) Entire Agreement. This Agreement is intended by the parties as a final
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expression of their agreement and is intended to be the 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.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(i) Further Assurances. Each party shall cooperate and take such action as
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may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(j) Rule 144. The Company shall timely file any reports required to be
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filed by it under the Securities Act and the Exchange Act to the extent required
from time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act pursuant to the exemption provided by Rule
144 under the Securities Act. Upon request of any
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Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
[End of text]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.
MONROE, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
Address:
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0 Xxxxx Xxxxxx, Xxxxx 00X
Xxxxxx, XX 00000
HOLDERS:
MONROE & COMPANY II, LLC
By: MONROE & COMPANY, LLC,
its Manager
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Manager
Address:
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0 Xxxxx Xxxxxx, Xxxxx 00X
Xxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Address:
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000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
