EX-10.25
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") is made as of the
1st day of May, 1996 by and among PURO WATER GROUP, INC., a Delaware
corporation with its principal offices at 00-00 00xx Xxxxxx, Xxxxxxx, Xxx
Xxxx 00000 (the "Company") and XXXXXX ASSOCIATES LIMITED PARTNERSHIP, a
Connecticut limited partnership, with an address of 000 Xxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxx 00000 ("Purchaser" or "Investor").
WITNESSETH:
WHEREAS, this date, the Investor has been issued Two Hundred Thousand
(200,000) shares (the "Shares") of the Company's Common Voting Stock, $.01
par value (the "Common Stock"); and
WHEREAS, the Investor and the Company desire to provide certain rights
to the Investor.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed as follows:
SECTION I
REGISTRATION OF SHARES
----------------------
1.1 The Shares have not been registered under the Securities Act of
1933, as amended (the "Act"). Prior to any registration of the Shares, the
Purchaser shall make no offer, sale or other disposition of any of the Shares
except under circumstances which, in the opinion of counsel to the
Company, will be in compliance with the Act. Each certificate for the Shares
shall bear upon the face thereof the following legend:
The shares represented by this certificate have been issued pursuant
to an exemption from registration under the Securities Act of 1933. These
shares may not be sold, transferred, pledged or hypothecated in the absence
of such registration or an exemption therefrom under such Act or the rules
and regulations thereunder.
1.2 REGISTRATION UNDER THE SECURITIES LAWS.
---------------------------------------
(a) CONTEMPORANEOUS REGISTRATION. In the event that the Company
files a registration statement (defined herein to include a Notification
under Regulation A under the Act and the offering circular included therein)
under the Act which relates to a current offering of securities of the
Company (except in connection with an offering solely to employees), such
registration statement and the prospectus included therein shall also, at the
written request to the Company by the Purchaser,
2
include and relate to, and meet the requirement of the Act with respect to
the public offering of the Shares so as to permit the public sale thereof in
compliance with the Act, provided, however, the underwriter consents to
including said Shares in the contemplated public offering and the Purchaser
agrees to pay to the underwriter the underwriter's discounts or commissions
attributable to said Shares. The Company shall give written notice to the
Purchaser of its intention to file a registration statement under the Act
relating to a current offering of the aforesaid securities of the Company
sixty (60) or more days prior to the filing of such registration statement,
and the written request provided for in the first sentence of this subsection
shall be made by the Purchaser thirty (30) or more days prior to the date
specified in the notice as the date on which it is intended to file such
registration statement. Neither the delivery of such notice by the Company
nor of such request by the Purchaser shall in any way obligate the Company to
file such registration statement and notwithstanding the filing of such
registration statement, the Company may, at any time prior to the effective
date thereof, determine not to offer the securities to which such
registration statement relates, without liability to the Purchaser, except
that the Company shall pay such expenses,
3
costs and the like as are contemplated to be paid by it under subsection (c)
of this Section.
(b) TERMS OF UNDERWRITING. In connection with any offering
involving an underwriting of shares issued by the Company, and in addition to
the underwriter's consent, the Company shall not be required to include any of
the Purchaser's Shares in such underwriting unless the Purchaser accepts the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in
the written opinion of the underwriters, jeopardize the success of the
offering by the Company. If the total amount of Shares that the Purchaser
requests to be included in such offering exceeds the amount of shares that
the underwriters reasonably believe to be compatible with the success of the
offering, the Company shall only be required to include in the offering that
number of the Shares of the Purchaser (pro rata with the other offered shares
of the Company) which the underwriters believe will not jeopardize the
success of the offering provided that no such reduction shall be made as a
consequence of the filing of a registration statement with respect to
treasury securities offered by the Company for its own account. If there is
an excess amount of Shares of selling
4
shareholders, each such shareholder may sell that number of shares permitted
by the underwriter to be sold that is in the same proportion as the aggregate
number of shareholders' Shares that the underwriter will sell is to the
number of Shares of selling shareholders offered by said shareholders to be
sold.
(c) DEMAND REGISTRATION RIGHTS: EXISTING REGISTRATION. In addition
to the aforementioned registration rights if, at any time after the date
hereof, any Shares acquired hereunder have not been included in the
registration statement referred to in Section 1.2 (a) either because the
Purchaser did not desire to sell or was not permitted to sell pursuant
thereto, or if said registration statement included some but not all of the
Shares owned by the Purchaser, then upon written notification to the Company
from the Purchaser that the Purchaser contemplates a sale under such
circumstances that constitute a public offering within the meaning of the
Act, the Company shall as expeditiously as reasonably possible prepare and
file a registration statement with the Securities and Exchange Commission for
such Shares and use its best efforts to cause such registration statement to
become and remain effective; provided, however, that (a) common Shares of the
Company are then publicly traded pursuant to an effective registration
statement, and (b) in connection with any
5
proposed registration intended to permit an offering of any securities from
time to time (i.e., a so-called "shelf registration") the Company shall in no
event be obligated to cause any such registration to remain effective for
more than one hundred twenty (120) days. The expense of this registration
statement including, without limitation, all legal and accounting fees,
travel and all other expenses, shall be borne by the Company.
(d) DEMAND REGISTRATION RIGHTS: INITIAL REGISTRATION;
-------------------------------------------------
(i) In addition to the aforementioned registration rights, at
any time after February 1, 1997, if the Company has not filed a registration
statement as referred to in Section 1.2(a), then upon written notification to
the Company by the Purchaser that it wishes to cause a public offering of
some or all of the Shares, within the meaning of the Act, the Company shall
then as expeditiously as reasonably possible prepare and file a registration
statement with the Securities and Exchange Commission for such Shares and use
its best efforts to cause such registration statement to become and remain
effective; provided, however, that the Company be permitted to include an
offering of any other securities of the Company in such registration
statement and further provided that in connection with any
6
proposed registration intended to permit an offering of any of the Shares
from time to time (i.e., a so-called "shelf registration") the Company shall
in no event be obligated to cause any such registration to remain effective
for more than one hundred twenty (120) days. The expense of this registration
statement, including but not limited to all legal and accounting fees, travel
and all other expenses, shall be borne by the Company.
(ii) In connection with this demand registration right, the
Purchaser shall have the right to compel the Company to adjust the number of
its Shares outstanding in order to cause the availability of that number of
Shares for sale to the public which shall be deemed by the Purchaser to be in
the Purchaser's best interests in effecting the registration of the Shares and
ultimate disposition of the same.
(e) In each instance in which pursuant to this Section the Company
shall take any action to permit a public offering or sale or other
distribution of any of the Shares, the Company shall:
(i) Supply to the Purchaser if it intends to make a public
distribution four (4) executed copies of each registration statement or
Notification and four (4) executed
7
copies of the preliminary, final and other prospectus or offering circular in
conformity with the requirements of the Act and the rules and regulations
promulgated thereunder.
(ii) Cooperate in taking such action as may be necessary to
register or qualify the Shares under such other securities acts or blue sky
laws of such jurisdictions as the Purchaser shall reasonably request and to
do any and all other acts and things which may be necessary or advisable to
enable the Purchaser to consummate such proposed sale or other disposition of
its Shares in any such jurisdiction; PROVIDED, HOWEVER, that in no event
shall the Company be obligated to qualify to do business or to file a general
consent to service of process in any jurisdiction where it shall not then be
qualified.
(iii) Keep effective for a period of not less than one hundred
eighty (180) days after the initial effectiveness thereof all such
registration statements or Notifications under the Act and cooperate in
taking such action as may be necessary to keep effective such other
registrations and qualifications, and do any and all other acts and things for
such period - not to exceed twelve (12) months - as may be necessary to
permit the public sale or other disposition of such Shares by the Purchaser.
8
(iv) Indemnify and hold harmless the Purchaser and each
underwriter, within the meaning of the Act, who may purchase from or sell for
the Purchaser, any Shares, from and against any and all losses, claims,
damages, and liabilities (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing, defending or
settling any claim) arising from (a) any untrue statement of a material fact
contained in any prospectus, registration statement or Notification furnished
pursuant to clause (i) of this subsection, or any prospectus or offering
circular included therein, or (b) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (unless such untrue statement or omission was based upon
information furnished in writing to the Company by the Purchaser or any such
underwriter expressly for use therein), which indemnification shall include
each person, if any, who controls the Purchaser or any such underwriter
within the meaning of the Act; provided, however, that the Company shall not
be so obligated to indemnify the Purchaser or any such underwriter or
controlling person unless the Purchaser and underwriter shall at the same
time indemnify the Company, its directors, each officer signing any
registration statement or Notification or any
9
amendment to any registration statements or Notifications and each person, if
any, who controls the Company within the meaning of the Act, from and against
any and all losses, claims, damages and liabilities (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing, defending or settling any claim) arising from (a)
any untrue statement of a material fact contained in any registration
statement or Notification or any amendment to any registration statement or
offering circular furnished pursuant to Clause (i) of this subsection, or
(b) any omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but the indemnity
of the Purchaser, or any such underwriter or controlling person shall be
limited to liability based upon information furnished in writing to the
Company by the Purchaser or any such underwriter or controlling person
expressly for use therein. The indemnity agreement of the Company therein shall
not inure to the benefit of any such underwriter (or to the benefit of any
person who controls such underwriter) on account of any losses, claims,
damages, liabilities (or actions or proceedings in respect thereof) arising
from the sale of any of such Shares by such underwriter to any person if such
underwriter failed to send or
10
give a copy of the prospectus or offering circular furnished pursuant to
Clause (i) of this subsection, as the same may then be supplemented or
amended.
The Company's obligation under said subsection 1.2(d) shall be
conditioned as to such public offering, upon a timely receipt by the Company
in writing of:
(A) Information as to the terms of such public offering furnished
by or on behalf of the Purchaser, if it intends to make a public distribution
of its Shares; and
(B) Such other information as the Company may reasonably require
from the Purchaser, or any underwriter for any of them, for inclusion in
such registration statement, Notification or post-effective amendment.
(v) Notwithstanding the foregoing, the Company shall make a
just and equitable contribution in the event that (i) an indemnified party
makes a claim for indemnification pursuant to subparagraph (iv) above but it
is found in a final judicial determination, not subject to further appeal,
that such determination may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act of 1934, as amended, or
11
otherwise, then the Company and each other party shall contribute to the
losses, liabilities, claims, damages, and expenses ("Losses") whatsoever to
which any of them may be subject, so that each is responsible for that
portion of the Losses equal to the relative fault of each of the parties in
connection with the facts which resulted in such Losses.
SECTION II
GENERAL PROVISIONS
------------------
2.1 Any failure on the part of any party hereto to comply with any of
its obligations, agreements or conditions hereunder may be waived in writing
by the parties hereto.
2.2 Without limiting any other indemnification set forth herein, each
party agrees to indemnify and hold harmless the others against any fee, loss
or expense arising out of claims by brokers or finders employed or alleged
to have been employed by the indemnifying party in connection with this
agreement.
2.3 All notices, elections, demands or other communications required or
permitted to be made or given pursuant to this agreement shall be in writing
and shall be considered as properly given or made if sent and actually
received by courier service, overnight delivery service or first class mail,
postage prepaid
12
or if transmitted (and receipt confirmed) by any telecommunication device
(e.g. telex or facsimile) and addressed or sent to the respective parties'
addresses specified below. Any party may change its address by giving notice
in writing to the other parties of its new address.
To the Company: Puro Water Group, Inc.
00-00 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention : Messrs. Xxxxx Xxxx
and Xxxx X. Xxxx,
Co-Presidents
With a copy to: Lev, Berlin & Xxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
To Investor: Xxxxxx Associates Limited Partnership
000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
With a copy to: Xxxx & Xxxxxxxxx, P.C.
Milford Place Corporate Center
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx, Esq.
2.4 This agreement and any agreements related hereto constitute the
entire agreement between the parties and supersede and cancel any other
agreement, representation, or communication, whether oral or written,
between the parties hereto relating to
13
the transactions contemplated herein or the subject matter hereof.
2.5 The Company and the Investor hereby consent to submit themselves to
the jurisdiction of the United States District Court for the Southern
District of New York and the Courts of the State of New York in connection
with any disputes which may arise hereunder. The Company hereby consents to
service of process in the State of New York by naming the Secretary of State
of the State of New York as agent for service of process. Such submission to
jurisdiction and consent to service of process is nonexclusive of any other
jurisdiction or manner of service in which or by which personal jurisdiction
over the Company or the Investor may be obtained.
2.6 This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York without giving effect to
principles of conflicts of law.
2.7 This agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their successors and assigns; provided, however, that
any assignment by any party of its rights under this agreement without the
prior written consent of the other parties shall be void.
14
2.8 This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this agreement effective the
day and year first above written.
PURO WATER GROUP, INC.
By: /s/ Xxxx X. Xxxx
----------------
Xxxx X. Xxxx,
Its Co-President
Hereunto Duly Authorized
By: /s/ Xxxxx Xxxx
----------------
Xxxxx Xxxx,
Its Co-President
Hereunto Duly Authorized
INVESTOR:
XXXXXX ASSOCIATES LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx Xxxxxxx Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Hereunto Duly Authorized
------------------------
15
