Exhibit 2.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of December
__, 1992, among SJW CORP., a California corporation (the "Company"), and XXXXXX
XXXX, XX. and XXXXXX X. XXXX, each an individual (collectively, the "Principal
Shareholders" and individually, a "Principal Shareholder").
This Agreement is made pursuant to the Stock Exchange Agreement dated as of
August 20, 1992 (as amended October 21, 1992) by and among the Company, the
Principal Shareholders, Xxxxxx Xxxx Company, a California corporation ("RMC")
and the other RMC shareholders (the "Exchange Agreement"). To induce the
Principal Shareholders to enter into the Exchange Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Exchange
Agreement.
The parties hereto hereby agree as follows:
1. Definitions.
1.1 "Holder" or "Holders". The term "Holder" or "Holders" shall mean
(i) the Principal Shareholders, for as long as they hold shares of Common Stock
(as defined below) issued pursuant to the Exchange Agreement, and (ii) a
transferee or transferees of any of such Common Stock entitled to the benefits
of this Agreement pursuant to Section 7 below.
1.2 "Common Stock". The term "Common Stock" shall mean the Company's
common stock, par value $3.125 per share.
1.3 "Registrable Securities". The term "Registrable Securities" shall
mean (i) the Common Stock issued pursuant to the Exchange Agreement and (ii) any
other equity securities of the Company issued in exchange for any such Common
Stock (including upon recapitalizations) which cannot be publicly resold by the
Holder thereof without restriction except pursuant to registration under the
Securities Act of 1933, as amended ("Securities Act"), or an available exemption
thereunder. For the purposes of this Agreement, securities subject to this
Agreement will cease to be Registrable Securities when (a) they have been
registered under the Securities Act, the registration statement in connection
therewith has been declared effective and they have been disposed of pursuant to
such effective registration statement by the Holders, (b) they are distributed
to the public pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act or (c) they have been otherwise transferred and new
certificates or other evidences of ownership for them not bearing a restrictive
legend and not subject to any stop transfer order or other restriction on
transfer have been delivered by the Company in compliance with applicable
securities laws.
2. Demand Registration.
2.1 Registration Rights. The Holders of Registrable Securities shall
have the right upon the affirmative vote of at least 40% of the Registrable
Securities to require that the Company register, using a registration statement
in such form as is then available to the Company under the Securities Act, the
Registrable Securities and the Company shall use its reasonable best efforts to
have such Registrable Securities registered by the Company under the Securities
Act. In addition, the Company shall be obligated to file and cause to become
effective, when requested by any Holder or Holders and at such time as such
registration is available, a registration statement in such form as is then
available to the Company under the Securities Act, with respect to at least an
aggregate of 85,000 shares of Registrable Securities. The managing underwriter
of any offering pursuant to this Section 2.1, if any, shall be a nationally
recognized investment banking firm selected by the affirmative vote of a
majority of Registrable Securities held by participating Holders and reasonably
acceptable to the Company. If, in the reasonable judgment of the managing
underwriter, if any, the inclusion of all of the participating Holders'
Registrable Securities would interfere with the successful marketing of a
smaller offering, then the total number of Registrable Securities to be included
in the registration statement shall be reduced pro rata among such participating
Holders, based upon the dollar amount of Registrable Securities that each
participating Holder had requested initially to be included in the offering,
until the required level is obtained.
2.2 Terms and Conditions. All registrations pursuant to Section 2.1
shall be made in accordance with the following terms and conditions:
(a) Notice. The participating Holders shall furnish to the
Company written notice stating: (i) the number of Registrable Securities
desired to be registered; (ii) the proposed plan of distribution for such
securities; (iii) the approximate date on which such Holders desire the
registration statement for such Registrable Securities to become effective;
(b) Information to Be Provided by the Participating Holders.
Each participating Holder shall furnish to the Company all information
regarding both itself and the proposed plan of distribution which is
required for inclusion in the registration statement;
(c) Filing Under State Securities Laws. The Company shall
effect all filings under state securities laws that any participating
Holder may reasonably request and take such other action as any
participating Holder may reasonably request to facilitate the offer and
sale of the Registrable Securities; provided, that such action does not
require the Company to register as a dealer in such state;
(d) Expenses. The Company shall pay all reasonable fees, costs
and expenses incurred in connection with all registration or qualification
of Registrable Securities under the Securities Act and under state
securities laws pursuant to Section 2.1, including, without limitation, all
reasonable registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, and
reasonable fees and disbursements of one Special Counsel for the
participating Holders ("Special Counsel"); provided, that the participating
Holders shall bear their pro rata share of the underwriting discounts and
commissions, if any, based upon their share of the total number of shares
offered and that each participating Holder shall bear all fees and expenses
of its own counsel, other than the Special Counsel, if any;
(e) Number of Registrations. The Company shall be obligated to
effect only one registration pursuant to Section 2.1 on Form S-1 or S-2 (or
their equivalent successor forms) if such forms are then available to the
Company under the Securities Act and shall be obligated to effect up to ten
registrations pursuant to Section 2.1 on Form S-3 (or its equivalent
successor form) if such form is then available to the Company under the
Securities Act; provided, that the Company shall not be obligated to file a
registration statement on Form S-3 within 180 days of the effective date of
any prior registration statement on Form X-0, X-0 or S-3, and no more than
three registration statements on Form S-3 per calendar year. If a
registration statement fails to become effective pursuant to Section 2.1
for any reason other than a request for withdrawal by the participating
Holders, then such registration shall not be counted as a demand
registration pursuant to Section 2.2(e) herein; and
(f) Exclusivity. The Company agrees that it shall not, except
with the written consent of a majority of the participating Holders,
include in any registration statement filed at the participating Holders'
request any other offering or sale of shares by the Company or by the other
shareholders of the Company if, in the reasonable judgment of the managing
underwriter, if any, such inclusion would be materially prejudicial to the
participating Holders' offering. If the Company or other shareholders of
the Company do include, with the participating Holders' consent, the
offering of their shares in any registration statement filed at the
participating Holders' request, then all reasonable expenses relating to
such registration shall be borne pro rata among the Company, the other
shareholders and the participating Holders according to the number of
shares offered by each participant; provided, that the Company shall pay
all reasonable fees, costs and expenses of the participating Holders as
required by Section 2.2(d).
(g) Termination of Rights. Notwithstanding anything to the
contrary contained in this Agreement, the registration rights set forth in
this Section 2 shall terminate with respect to each Holder who may sell his
Registrable Securities to the public without registration with the SEC (as
defined below) and without volume limitations on such sale or sales.
3. Incidental Registration.
3.1 Reasonable Efforts Obligation. The Company agrees that each time it
proposes to file a registration statement (other than a registration statement
relating solely to the issuance of Company securities pursuant to employee
benefit plans or the distribution of Company securities in a merger or
acquisition) under the Securities Act for the proposed sale for cash of shares
of its Common Stock on a form that would also permit the registration of the
Registrable Securities, the Company shall use all reasonable efforts to cause
the Registrable Securities to be included in such registration statement.
3.2 Terms and Conditions. All registrations pursuant to Section 3.1
shall be subject to the following terms and conditions:
(a) Notice. The Company shall give to the Holders written
notice of the proposed registration prior to filing. To participate in the
registration, a Holder must notify the Company in writing within 20 days
after receipt of the notice from the Company that such Holder desires to
participate in the registration and indicate the number of Registrable
Securities such Holder desires to sell;
(b) Number of Shares. Each participating Holder agrees that
the number of Registrable Securities which the participating Holders shall
have the right to register, if any, shall be determined solely by the
reasonable
judgment of the managing underwriter, if any. If, in the reasonable
judgment of the managing underwriter, if any, the inclusion of the
participating Holders' Registrable Securities would interfere with the
successful marketing of a smaller offering, then the total number of shares
to be included in the registration statement shall be reduced to the
required level as follows:
(i) First, the number of shares held by all other
holders of securities which have rights of incidental registration shall be
reduced pro rata among such other holders until the required level is obtained;
and
(ii) Second, if the required level cannot be obtained
even though all of the shares held by such other holders are eliminated from the
offering, then the number of Registrable Securities held by the participating
Holders shall be reduced pro rata among such participating Holders according to
the percentage that the number of shares of Registrable Securities held by each
participating Holder bears to the aggregate number of shares of Registrable
Securities held by the participating Holders, until the required level is
obtained.
Those shares which are excluded from the registration statement shall
be withheld from the market by the holders thereof for the period, not to exceed
120 days, which the managing underwriter, if any, reasonably determines to be
necessary to effect the offering; provided, that the principal officers of the
Company have also agreed to such restrictions;
(c) Expenses. With respect to each inclusion of Registrable
Securities in a registration statement pursuant to Section 3.1, all reasonable
fees, costs and expenses of and incidental to such inclusion shall be borne by
the Company; provided, that the participating Holders shall bear their pro rata
share of the underwriting discounts and commissions, if any, and that each
Holder shall bear the fees and expenses of its own counsel other than those of
one Special counsel, which shall be borne by the Company;
(d) Information to Be Furnished by the Participating Holders.
The participating Holders shall furnish to the Company such information
regarding the participating Holders and the proposed plan of distribution as is
required to be included in the registration statement; and
(e) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under
Section 3.1 prior to the effectiveness of such registration whether or not the
participating Holders have elected to include securities in such registration.
(f) Termination of Rights. Notwithstanding anything to the
contrary contained in this Agreement, the incidental registration rights set
forth in this Section 3 shall terminate with respect to each Holder who may sell
his Registrable Securities to the public without registration with the SEC (as
defined below) and without volume limitations on such sale or sales.
4. Additional Registration Procedures. If, at any time and from time to
time, the Company is required by the provisions of either Section 2.1 or 3.1
hereinabove to effect the registration of shares of Registrable Securities under
the Securities Act, then the Company shall:
4.1 Filing of Registration Statement. Prepare and file with the
Securities and Exchange Commission (the "SEC") the applicable registration
statement with respect to the Registrable Securities and use its reasonable best
efforts to cause such registration statement to become and remain effective
until the Registrable Securities covered by such registration statement have
been sold, and prepare and file with the SEC amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective until the Registrable
Securities covered by such registration statement have been sold.
4.2 Underwriting Agreement. Enter into a written underwriting agreement
in customary form and substance reasonably satisfactory to the Company and the
managing underwriter or underwriters, if any, of the offering of the Registrable
Securities. The Company acknowledges that such underwriting agreement may
contain restrictions on the Company's ability to offer equity securities but in
no event shall the Company be obligated to refrain from marketing its equity
securities for longer than 120 days after the effective date of any registration
statement filed by the Company.
4.3 Copies of Documents. Furnish to the participating Holders and to
the underwriters of the securities being registered, if any, such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such Holders or underwriters may
reasonably request.
4.4 Notice of Effectiveness. Notify the participating Holders,
reasonably promptly after it shall receive notice thereof, of the time when such
registration statement has become effective, or a supplement to any prospectus
forming apart of such registration statement has been filed.
4.5 Notice of Amendments. Notify such Holders reasonably promptly of
any request by the SEC for the amending or supplementing of such registration
statement or prospectus or for the provision of additional information.
4.6 Filing of Amendments. Prepare and file reasonably promptly with the
SEC, and notify reasonably promptly such Holders of the filing of such amendment
or supplement to such registration statement or prospectus as may be necessary
to correct any statements or omissions if, at the time when a prospectus
relating to such securities is required to be delivered under the Securities
Act, the principal officers of the Company are on notice that any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of fact or omit to state any
fact necessary to make the statements therein not misleading in light of the
circumstances in which they were made.
4.7 Amendment of Prospectus. If, within 150 days of the effectiveness
of the applicable registration statement, any such Holder or underwriter for any
such Holder, if any, is required to deliver a prospectus at a time when the
prospectus then in effect may no longer be used under the Securities Act, then
prepare reasonably promptly upon written request such amendment or amendments to
such registration statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of the Securities Act.
4.8 Notice of Stop Orders. Advise such Holders reasonably promptly
after it receives notice or obtains knowledge thereof, of the issuance of any
stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for that purpose
and reasonably promptly use its reasonable best efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such stop order should be
issued.
4.9 Opinion of Counsel and Accountant's Letter. At the reasonable
request of any such Holder, furnish on the effective date of the registration
statement and, if such registration includes an underwritten public offering, at
the closing provided for in the underwriting:
(i) an opinion of the counsel representing the
Company for the purposes of such registration, addressed to the underwriters, if
any, and to the Holders making such request, covering such matters with respect
to the registration statement, the prospectus and each amendment or supplement
thereto, proceedings under state and federal securities laws, other matters
relating to the Company, the securities being registered, and the offer and sale
of such securities as are customarily the subject of opinions of issuer's
counsel provided to underwriters in underwritten public offerings; and
(ii) a letter dated as of each such date, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the Holders making such request, stating that they
are independent certified public accountants within the meaning of the
Securities Act and that in the opinion of such accountants the financial
statements and other financial data of the Company included in the registration
statement, the prospectus or any amendment or supplement thereto comply in all
respects with the applicable accounting requirements of the Securities Act, and
additionally covering such other financial matters, including, without
limitation, information as to the period ending not more than five calendar days
prior to the date of such letter with respect to the registration statement and
prospectus, as the underwriters, if any, or such requesting Holders may
reasonably request.
4.10 Objectionable Amendments. Not file any amendment or supplement to
each registration statement or prospectus to which a majority of such Holders
has reasonably objected on the grounds that such amendment or supplement does
not comply in all respects with the requirements of the Securities Act or the
rules and regulations there under, having been furnished with a copy thereof
prior to the filing thereof.
5. Indemnification
5.1 Indemnification by Company. The Company shall indemnify and hold
harmless the Holders, any underwriter (as defined in the Securities Act) for the
Holders, and each person who controls any Holder or any underwriter for any
Holder within the meaning of the Securities Act, from and against, and shall
reimburse such persons with respect to, any and all losses, damages,
liabilities, costs or expenses to which they may become subject under the
Securities Act, or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue statement
of any fact by the Company contained in any registration statement filed
pursuant to the provisions of this Agreement, any prospectus contained therein,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission by the Company to state therein a fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, that the
Company shall not be liable in any such case to the extent that any such losses,
damages, liabilities, costs or expenses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission by the
Company so made in strict conformity with information furnished by the Holders
or any such underwriter in writing specifically for use in the preparation
thereof; provided, that the indemnity contained in this Section 5.1 shall not
apply to amounts paid in settlement of any such losses, damages, liabilities,
costs or expenses if such settlement is effected without the consent of the
Company.
5.2 Indemnification by Holder. Each Holder, severally but not jointly,
shall indemnify and hold harmless the Company from and against, and shall
reimburse the Company, any underwriter for the Company and any person who
controls the Company or any such underwriter with respect to, any and all
losses, damages, liabilities, costs or expenses to which the Company may become
subject under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any fact contained in any registration statement filed
pursuant to the provisions of this Agreement, any prospectus contained therein,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, in light of the circumstances in which they were made, not
misleading; in each case to the extent, but only to the extent, that such untrue
statement, or alleged untrue statement, or omission, or alleged omission, was so
made in reliance upon and in strict conformity with written information
furnished by such Holder specifically for use in the preparation thereof;
provided, that the indemnity contained in this Section 5.2 shall not apply to
amounts paid in settlement of any such losses, damages, liabilities, costs or
expenses if such settlement is effected without the consent of such Holder.
5.3 Conduct of Indemnification Proceedings. Reasonably promptly after
receipt by an indemnified party of notice, pursuant to the provisions of
Sections 5.1 and 5.2, of the commencement of any action involving the subject
matter of the foregoing indemnity provisions, such indemnified party shall, if a
claim thereof is to be made against the indemnifying party pursuant to the
provisions of Sections 5.1 and 5.2, notify the indemnifying party of the
commencement
thereof, but the omission to notify the indemnifying party shall not relieve it
from any liability it may have to any indemnified party thereunder. If such
action is brought against any indemnified party and it notifies the then
indemnifying party of the commencement thereof, then the indemnifying party
shall have the right to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party pursuant to the provisions of Section 5.1 or
5.2, as applicable, for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, other than
reasonable costs of investigation.
6. Reporting Requirements Under the Securities Exchange Act of 1934. The
Company shall timely file such information, documents and reports as the SEC may
require or prescribe under either Section 13 or 15(d) (whichever is applicable)
of the Securities Exchange Act of 1934, as amended ("Exchange Act"). The Company
shall thereafter, whenever reasonably requested by any Holder, notify such
Holder in writing whether the Company's has, as of the date specified by such
Holder, complied with the Exchange Act reporting requirements to which it is
subject for a period prior to such date as shall be specified by such Holder.
The Company acknowledges and agrees that the purposes of the requirements
contained in this Section 6 are:
(i) to enable any such Holder to comply with the current
public information requirement contained in Paragraph (b) of Rule 144 under the
Securities Act should such Holder ever wish to dispose of any of the securities
of the Company acquired by it without registration under the Securities Act in
reliance upon Rule 144 (or any equivalent successor provision); and
(ii) to qualify the Company for the use of registration
statements on Form S-3, or its equivalent successor form, with respect to
secondary distributions. In addition, the Company shall take such other
reasonable measures and file such other information, documents, and reports as
shall hereafter be required by the SEC as a condition to the availability of
Rule 144 under the Securities Act (or any equivalent successor provision).
7. Transferees. The rights contained in this Agreement shall inure to the
benefit of any transferee of a Holder receiving a number of shares of such
Holders' Registrable Securities equal to or greater than ten percent of the
Company's then outstanding shares of Common Stock; provided, that (a) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee and the Registrable Securities
with respect to which such registration rights are being transferred as well as
a copy of a duly executed written instrument in form reasonably satisfactory to
the Company by which such transferee assumes all of the obligations and
liabilities of its transferor hereunder and under the Affiliate Agreement of
such transferor referred to in the Exchange Agreement and agrees to be bound
hereunder and thereunder; and (b) immediately following such transfer
disposition of such Registrable Securities by the transferee is restricted under
the Securities Act.
8. Stand-Off Agreement. The Holders shall refrain from making any public
sale or distribution of the Company's equity securities during the period
commencing 7 days prior to, and expiring 120 days after, a registration
statement has become effective, if, but only if, the managing underwriter or
underwriters, if any, determine it necessary in order to effect the offering and
the Company's principal officers are subject to the same restrictions.
9. Miscellaneous.
9.1 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which materially adversely
affects the rights granted to the Holders of Registrable Securities in this
Agreement. The Company has not previously entered into any agreement with
respect to any of its equity securities granting any registration rights to any
person.
9.2 Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement 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 agreed in writing thereto and has obtained the written
consent of Holders of at least a majority of the Registrable Securities then
outstanding and the written consent of the parties hereto. Notwithstanding the
foregoing, the addition of additional parties hereto as "Holders" pursuant to
Section 1.1 above shall not constitute an amendment, modification or supplement
hereof.
9.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given (i) upon receipt, if delivered personally, (ii)
upon confirmation of receipt, if given by electronic facsimile and (iii) on the
third business day following mailing, if mailed first-class, postage prepaid,
registered or certified mail as follows:
If to the Company: SJW Corp.
000 Xxxx Xxxxx Xxxxx Xxxxxx Xxx Xxxx, XX 00000
Telecopier No.:(000) 000-0000
Attn: X .X. Xxxx, Chief Financial Officer and Treasurer
With a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx Xxx Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
If to the Shareholders: Xxxxxx Xxxx, Xx.
Xxxxxx X. Xxxx
c/o Xxxxxx Xxxx Company
0000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
With a copy to: Sheppard, Mullin, Xxxxxxx & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Any party may, by notice given to the other parties in accordance with this
Section 9.4, designate another address, telecopier number or person for receipt
of notice under this Agreement.
9.4 Successors and Assigns. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties.
9.5 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.
9.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and to be performed wholly within that State without regard to principles of
conflicts of law.
9.8 Severability. In the event that anyone or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and the remaining provisions contained
herein shall not be affected or impaired thereby.
9.9 Entire Agreement. This Agreement, together with the Exchange
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the, agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement, together with the Exchange Agreement, supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
9.10 Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof or thereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SJW CORP.
By:
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Title
By:
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Xxxxxx Xxxx, Xx.
By:
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Xxxxxx X. Xxxx
