EXHIBIT 10.16
EXHIBIT C
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
______________, 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").
This Agreement is contemplated by a certain Stock Purchase Agreement dated
as of May __, 1998 (the "Purchase Agreement") by and among the Company, Xxxxxx-
American Company, Inc., a North Carolina corporation, Xxxx X. Xxxxxx, Xx., as
representative, and the Holders.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS.
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"Business Day" means any day other than a day on which banks are authorized
------------
or required to be closed in the State of New York.
"Closing Date" has the meaning ascribed thereto in the Purchase Agreement.
------------
"Commission" means the Securities and Exchange Commission.
----------
"Common Shares" means the [___________] shares of Common Stock received by
-------------
the Holders pursuant to the Purchase Agreement.
"Common Stock" means the common stock, par value $.01 per share, of the
------------
Company.
"Company" has the meaning set forth in the preamble and shall include the
-------
Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 6(a).
-------------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
------------
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Person" means any individual, corporation, partnership, limited liability
------
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
----------
(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
----------------------
Shares the sale of which is covered by a Registration Statement that has been
declared effective under the Securities Act, (ii) Common Shares which may be
transferred pursuant to Rule 144 (or any similar provision then in force, but
not Rule 144A) under the Securities Act, including a sale pursuant to the
provisions of Rule 144(k), and (iii) Common Shares which cease to be
outstanding.
"Registration Expenses" has the meaning set forth in Section 5.
---------------------
"Registration Statement" means any registration statement of the Company
----------------------
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
--------------
time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Suspension Notice" has the meaning set forth in Section 4.
-----------------
"Suspension Period" has the meaning set forth in Section 4.
-----------------
SECTION 2. PIGGY-BACK REGISTRATIONS.
------------------------
(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
2
shall specify the number of Registrable Securities intended to be disposed of by
such Holder and the intended method of distribution thereof), the Company shall
use 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 2 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 2 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 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 (including
the Holders) to a number deemed satisfactory by the managing underwriter,
provided, however, that the securities 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; and second, securities
held by any Selling Stockholders (including the Holders) participating in such
offering pursuant to the exercise of contractual piggyback or demand
registration rights, as determined on a pro rata basis (based upon the aggregate
number of securities held by such Selling Stockholders). In addition, if, in
the opinion of tax counsel to the Company or its independent auditors, the
number of securities to be sold by Selling Stockholders in an offering with
respect to which registration has been requested by any Holder pursuant to this
Section 2 could jeopardize the status of the transactions contemplated by the
Purchase Agreement as exchanges qualifying under Section 351 of the Internal
Revenue Code, 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 such tax counsel, in the order
of priority set forth in the immediately preceding sentence.
( 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
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of the underwriting
arrangements.
3
SECTION 3. REGISTRATION PROCEDURES.
-----------------------
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.
(b) The Company shall 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 for the
lesser of (i) one hundred eighty (180) days or (ii) the period necessary to
complete the proposed offering of Registrable Securities; shall 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 shall 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 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, 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 3(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 4), 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
4
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 commercially reasonable efforts to prevent
the issuance of any order suspending the effectiveness of any Registration
Statement, and, if one is issued, the Company shall use 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 4. SUSPENSION PERIOD.
-----------------
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 3(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 3(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 5. REGISTRATION EXPENSES.
---------------------
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, 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 (a) underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of
5
Registrable Securities, (b) any fees or expenses of any counsel, accountants or
other persons retained or employed by the Holders, or (c) out-of-pocket expenses
of the Holders and their agents, including, without limitation, any travel
costs.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
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
------------------------------
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 6(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
--------------------------
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
6
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 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
------------
paragraph (a) or (b) of this Section 6 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
6, 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 6(d).
The Company and each Holder agrees that it would not be just or equitable
if contribution pursuant to this Section 6(d) were determined by pro rata
--- ----
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 6
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
7
to contribute an amount under this Section 6(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 Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
SECTION 7. RESTRICTIONS ON SALES BY HOLDERS.
--------------------------------
In the event of an underwritten public offering of securities of the
Company, each Holder shall, upon the written request of the managing underwriter
(or underwriters) of such offering, agree not to effect any sale or disposition
of any securities similar to those being registered in such offering during the
14 days immediately prior to and the 180-day period following the effective date
of the relevant Registration Statement. Such agreement shall be in form and
substance satisfactory to the Company and such underwriter.
SECTION 8. INFORMATION FURNISHED BY HOLDERS.
--------------------------------
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.
-------------
(a) Amendments and Waivers. The provisions of this Agreement, including
----------------------
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
8
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
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, 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; when receipt is
acknowledged, if telecopied; and on the next Business Day if timely delivered to
a courier guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
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
------------
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
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
-------------
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
------------
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
----------------
expression of their agreement and is intended to be the complete and exclusive
statement of the
9
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
------------------
may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
MONROE, INC.
By: _________________________
Xxxxx X. Xxxxxx
President
0 Xxxxx Xxxxxx, Xxxxx 00X
Xxxxxx, XX 00000
Fax: (000) 000-0000
HOLDERS:
_________________________________
Xxxx X. Xxxxx, Xx.
00000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
__________________________________
Xxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
__________________________________
Xxxxx X. Xxxxxx
00000 Xxxx Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
10
__________________________________
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
__________________________________
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
__________________________________
E. Xxx Xxxxxxx
00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
___________________________________
Xxxxxxx X. Xxxxxxx
000 Xxxx Xxxxx Xxx
Xxxxxxxxxx, XX 00000
__________________________________
Xxxxxx X. Xxxxxxxxx, Xx.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
__________________________________
Xxxxxx X. Xxxxxxxxx, Xx.
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
____________________________________
Xxxxxx X. Xxxxx
#00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
11
__________________________________
Xxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
__________________________________
Xxxxxx X. Xxxxxx, III
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
12