REGISTRATION RIGHTS AGREEMENT
Exhibit 10.38
This REGISTRATION RIGHTS AGREEMENT, dated as of [•] (this “Agreement”), is made
between Primo Water Corporation, a Delaware corporation (the “Company”), and Culligan
International Company, a Delaware corporation (“Culligan”). Capitalized terms used in this
Agreement without definition have the meanings set forth in Section 8.
A. On June 1, 2010, the Company, Culligan Store Solutions, LLC (“CSS”) and Culligan of
Canada, Ltd. entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant
to which the Company agreed to acquire certain assets in exchange for cash and Registrable
Securities, all as more fully described in the Purchase Agreement.
B. Immediately following receipt by CSS of the Registrable Securities following the
Overallotment Option Closing Date, CSS will transfer the Registrable Securities to Culligan.
C. It is a condition to the Closing under the Purchase Agreement that Culligan and CSS enter
into the Lock-Up Agreement, restricting the resale of Registrable Securities as therein provided.
D. It is a condition to the Closing under the Purchase Agreement that this Agreement be
executed by the parties and delivered to Culligan on the Closing Date.
Now, therefore, the parties hereto agree as follows:
1. Registration of Registrable Securities.
(a) Registration. The Company will use its commercially reasonable efforts to
register, in accordance with the provisions of this Agreement, all the Registrable Securities and
to have the Registration Statement declared effective within 181 days of the Closing Date. The
Company will pay all Registration Expenses incurred in connection with the Registration.
(b) Postponement of Registration or Use of Registration Statement. The Company may
postpone for a reasonable period of time, not to exceed 30 days each time it exercises its rights
under this clause (b), (i) the filing of a prospectus or the effectiveness of the Registration
Statement or (ii) Culligan’s use of and ability to make sales pursuant to the Registration
Statement, if, in either such case, the Company furnishes to Culligan a certificate signed by the
Chief Executive Officer of the Company stating that the Company believes that either the
Registration or Culligan’s use of or making sales pursuant to the Registration Statement would be
reasonably likely to have a material adverse effect on any proposal or plan by the Company to
engage in any acquisition of stock or assets (other than in the ordinary course of business) or any
merger, amalgamation, consolidation, tender offer or similar transaction, or otherwise would
require disclosure of material nonpublic information that would not be in the best interests of the
Company and its shareholders; provided that the Company may not effect such a postponement
more than two times in any 12-month period. If the Company so postpones the filing of a prospectus
or the effectiveness of the Registration Statement, the Company will pay all Registration Expenses
incurred in connection with any such postponement.
(c) Selection of Underwriters. If Culligan intends to distribute any or all of the
Registrable Securities by means of an underwritten offering, it will so advise the Company. In
such event, Culligan will have the right to select the investment banker(s) and manager(s) to
administer the offering, subject to the Company’s approval which will not be unreasonably withheld
or delayed.
2. Registration Procedures. The Company will use its commercially reasonable efforts
to effect the registration and sale of the Registrable Securities in accordance with Culligan’s
intended method of disposition thereof. Without limiting the generality of the foregoing, the
Company will:
(a) prepare and file the Registration Statement with the Commission, make all required filings
with FINRA and thereafter use its commercially reasonable efforts to cause the Registration
Statement to become effective within 181 days after the Closing Date; provided that
(i) before filing the Registration Statement or any amendments or supplements thereto, the
Company will furnish to one firm of counsel selected by Culligan copies of all such documents
proposed to be filed; (ii) unless such counsel earlier informs the Company that it has no
objections to the filing of such Registration Statement, amendment or supplement, the Company will
not file such Registration Statement, amendment or supplement prior to the date that is two
Business Days from the date that such counsel received such document; and (iii) the Company
will not file any Registration Statement or amendment or post-effective amendment or supplement to
such Registration Statement if such counsel has reasonably objected in writing on the grounds that
(and explaining why) such amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations thereunder;
(b) prepare and file with the Commission such amendments and supplements to the Registration
Statement and such free writing prospectuses under Rule 433 (each, a “Free Writing
Prospectus”) as may be necessary to keep the Registration Statement effective until the
earliest of (i) three years from the Closing Date, (ii) such time as (A)
Culligan owns less than 5% of the Company’s outstanding common stock, $0.01 par value per share
(“Common Stock”), and (B) all of the Registrable Securities held by Culligan at
such time could be sold without restriction in a single transaction under Rule 144, and
(iii) such time as all of the Registrable Securities have been disposed of by Culligan in
accordance with the intended methods of disposition set forth in the Registration Statement (but in
any event not before the expiration of any longer period required under the Securities Act);
provided that, at any time after the Company becomes eligible to register Common Stock on
Form S-3, the Company shall, if either (1) so requested by Culligan or (2) the
Company so chooses, convert the then effective Registration Statement into a shelf Registration
Statement on Form S-3 so as to enable Culligan to sell its Common Stock pursuant thereto from time
to time in accordance with Rule 415;
(c) comply with the provisions of the Securities Act with respect to the disposition of the
Registrable Securities until such time as all of the Registrable Securities have been disposed of
by Culligan in accordance with the intended methods of disposition set forth in such Registration
Statement;
(d) furnish to Culligan such number of copies, without charge, of the Registration Statement,
each amendment and supplement thereto, including each preliminary prospectus, final prospectus, any
Free Writing Prospectus, all exhibits and other documents filed therewith and such other documents
as Culligan may reasonably request in order to facilitate the disposition of the Registrable
Securities;
(e) use its commercially reasonable efforts to register or qualify the Registrable Securities
under such other securities or blue sky laws of such United States jurisdictions as Culligan
reasonably requests and do any and all other acts and things that may be reasonably necessary or
reasonably advisable to enable Culligan to consummate the disposition in such jurisdictions of the
Registrable Securities; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any such jurisdiction;
(f) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other United States governmental agencies, authorities or
self-regulatory bodies as may be necessary or reasonably advisable in light of the business and
operations of
2
the Company to enable Culligan to consummate the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition thereof;
(g) promptly notify Culligan, at any time when a prospectus relating to the Registration
Statement is required to be delivered under the Securities Act, upon discovery that, or upon the
discovery of the happening of any event as a result of which, the prospectus contains an untrue
statement of a material fact or omits any fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and, as promptly as
practicable but subject to Section 1(b) hereof, prepare and furnish to Culligan a reasonable number
of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements therein not misleading
in the light of the circumstances under which they were made;
(h) promptly notify Culligan (i) when the prospectus or any prospectus supplement or
post-effective amendment or any Free Writing Prospectus has been filed and, with respect to the
Registration Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission for amendments or supplements to the Registration
Statement or to amend or to supplement such prospectus or for additional information, and
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for any of such purposes;
(i) use its commercially reasonable efforts to cause the Registrable Securities to be listed,
within 181 days after the Closing Date, on each securities exchange or automated quotation system
on which shares of Common Stock are then listed;
(j) provide a transfer agent and registrar for the Registrable Securities not later than the
effective date of, or date of the final receipt issued for, the Registration Statement;
(k) enter into such customary agreements (including underwriting agreements with customary
provisions) on terms reasonably satisfactory to the Company and take all such other actions as
Culligan or the underwriters, if any, reasonably request in order to facilitate the disposition of
the Registrable Securities;
(l) upon reasonable advance notice by Culligan, make available for inspection by Culligan, any
underwriter participating in any disposition pursuant to the Registration Statement and any
attorney, accountant or other agent retained by Culligan or any such underwriter, all relevant
financial and other records, pertinent corporate documents and documents relating to the business
of the Company, and cause the Company’s officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with the Registration Statement; provided that Culligan
will, and will cause each such underwriter, accountant or other agent to, (i) enter into a
confidentiality agreement in form and substance reasonably satisfactory to the Company and
(ii) minimize the disruption to the Company’s business in connection with the foregoing;
(m) otherwise use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve months beginning with the
first day of the Company’s first full calendar quarter after the effective date of the Registration
Statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;
3
(n) in the event of the issuance of any stop order suspending the effectiveness of the
Registration Statement, or of any order suspending or preventing the use of any related prospectus
or ceasing trading of any securities included in the Registration Statement for sale in any
jurisdiction, subject to Section 1(b) hereof, use its commercially reasonable efforts promptly to
obtain the withdrawal of such order;
(o) enter into such agreements and take such other actions as Culligan or the underwriters, if
any, reasonably request in order to facilitate the disposition of the Registrable Securities,
including, without limitation, preparing for and participating in such number of “road shows” and
such other customary selling efforts as the underwriters reasonably request in order to facilitate
such disposition; provided that, for any underwritten public offering, (i) Culligan
shall provide the Company with at least 10 Business Days notice prior to any such “road show”,
(ii) the Company shall not be obligated to participate in any “road show” that extends more
than 4 Business Days and (iii) the Company shall have no obligation to participate in more
than two “road shows”.
(p) for so long as Culligan holds at least 10% of the Company’s outstanding Common Stock or if
such registration includes an underwritten public offering, upon reasonable notice, obtain one or
more comfort letters addressed to Culligan dated the effective date of the Registration Statement,
each amendment and supplement thereto (and if such registration includes an underwritten public
offering, dated the date of the underwriting agreement for such offering and the date of the
closing under the underwriting agreement for such offering), signed by the Company’s independent
public accountants in customary form and covering such matters of the type customarily covered by
comfort letters;
(q) for so long as Culligan holds at least 10% of the Company’s outstanding Common Stock or if
such registration includes an underwritten public offering, upon reasonable notice, provide legal
opinions of the Company’s outside counsel addressed to Culligated dated the effective date of the
Registration Statement, each amendment and supplement thereto (and if such registration includes an
underwritten public offering, dated the date of the closing under the underwriting agreement for
such offering), with respect to the Registration Statement, each amendment and supplement thereto
(including the preliminary prospectus) and such other documents relating thereto in customary form
and covering such matters of the type customarily covered by legal opinions of such nature;
(r) furnish to Culligan such information and assistance as Culligan may reasonably request in
connection with any “due diligence” effort which Culligan may reasonably deem appropriate, provided
that Culligan shall enter into a confidentiality agreement in form and substance reasonably
satisfactory to the Company; and
(s) use its commercially reasonable efforts to take or cause to be taken all other actions,
and do and cause to be done all other things, necessary or reasonably advisable in the opinion of
Culligan to effect the registration of the Registrable Securities contemplated hereby.
The Company agrees not to file or make any amendment to the Registration Statement, or any
amendment of or supplement to the prospectus or any Free Writing Prospectus used in connection
therewith, that refers to Culligan as a selling stockholder without the consent of Culligan, such
consent not to be unreasonably withheld or delayed, unless and to the extent such disclosure is
required by law.
The Company may require Culligan to furnish the Company with such information regarding Culligan
and pertinent to the disclosure requirements relating to the registration and the distribution of
such securities as the Company may from time to time reasonably request in writing.
4
3. Shelf Take-Downs. At any time after the Registration Statement is converted into a
shelf Registration Statement pursuant to the proviso in Section 2(b), if Culligan delivers a
notice to the Company (a “Take-Down Notice”) stating that it intends to effect a
disposition of all or part of the Registrable Securities (a “Shelf Disposition”) and
stating the number of the Registrable Securities to be included in the Shelf Disposition, then the
Company shall amend or supplement the shelf Registration Statement or related prospectus as may be
necessary in order to enable such Registrable Securities to be disposed of pursuant to the Shelf
Disposition, provided that Culligan shall not be entitled to deliver (i) an
aggregate of more than three Take-Down Notices in any twelve month period, (ii) any
Take-Down Notice within 30 days after the effective date of any registration statement of the
Company hereunder, or (iii) any Take-Down Notice unless it relates to the anticipated sale
of Registrable Securities with a market value of at least $5.0 million (based upon the market value
of the Company’s Common Stock on the date of the delivery of such Take-Down Notice).
4. Registration Expenses. All expenses incidental to the Company’s performance of or
compliance with this Agreement, including, without limitation, all registration and filing fees,
fees and expenses of compliance with United States securities or blue sky laws, word processing,
duplicating and printing expenses, messenger and delivery expenses, and fees and disbursements of
counsel for the Company and all independent certified public accountants, underwriters and other
Persons retained by the Company in accordance with this Agreement, and all of the Company’s
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual audit or quarterly
review, the expenses of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar securities issued by the
Company are then listed or on the NASDAQ (all such expenses, “Registration Expenses”), will
be borne by the Company; provided that (i) all Selling Expenses and (ii) fees and
disbursements of counsel for Culligan will be borne by Culligan. Notwithstanding the foregoing,
the Company shall bear all of the expenses incurred in connection with the first request by
Culligan (other than in connection with an underwritten public offering) pursuant to Section 2(p)
and Section 2(q) for a comfort letter addressed to Culligan and a legal opinion of the Company’s
outside counsel addressed to Culligan, respectively, with the expenses for each subsequent comfort
letter or legal opinion (other than in connection with an underwritten public offering) to be borne
50% by the Company and 50% by Culligan.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless, and hereby does indemnify and hold
harmless, Culligan, its affiliates and their respective officers, directors and partners and each
Person who directly or indirectly controls Culligan (within the meaning of the Securities Act)
(each, a “Culligan Indemnitee”) against, and pay and reimburse such Culligan Indemnitee for
any losses, claims, damages, liabilities, joint or several, or actions or proceedings, whether
commenced or threatened, in respect thereof, (collectively, “Losses”) to which such
Culligan Indemnitee may become subject under the Securities Act or otherwise, insofar as such
Losses arise out of or are based upon (i) any untrue or alleged untrue statement of
material fact contained in any Registration Statement, prospectus, preliminary prospectus or Free
Writing Prospectus or any amendment thereof or supplement thereto, (ii) any omission or
alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities laws applicable to the
Company and relating to action or inaction required of the Company in connection with the
Registration, and the Company will pay and reimburse each such Culligan Indemnitee for any legal or
any other expenses actually and reasonably incurred by them in connection with investigating,
defending or settling any such Losses, provided that the Company will not be liable in any
such case to the extent that any such Losses or expenses arise out of (i) or are based upon an
untrue statement or alleged untrue statement, or omission or alleged omission, made in such
Registration Statement, any such prospectus, preliminary prospectus or Free Writing Prospectus or
5
any amendment or supplement thereto, or in any application, in reliance upon, and in
conformity with, written information prepared and furnished to the Company by Culligan expressly
for use therein or (ii) facts or circumstances that resulted in a breach of any representation or
warranty of Culligan, CSS or Culligan of Canada Ltd. in the Purchase Agreement or any document or
certificate delivered pursuant thereto (without regard to any baskets, caps, survival periods or
other limitations on the Company’s (or its subsidiaries’) ability to make an indemnification claim
with respect to any such breach under the Purchase Agreement. In connection with an underwritten
offering, the Company, if requested, will indemnify such underwriters, their officers and directors
and each Person who controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the Culligan Indemnitees.
(b) Culligan will furnish to the Company in writing such information with respect to itself as
the Company reasonably requests for use in connection with any such Registration Statement or
prospectus and, will indemnify and hold harmless the Company, its directors and officers, and each
other Person who controls the Company (within the meaning of the Securities Act but excluding any
Culligan Indemnitee to the extent it may be deemed to control the Company) (each, a “Company
Indemnitee”) against any Losses to which any such Company Indemnitee may become subject under
the Securities Act or otherwise, insofar as such Losses arise out of or are based upon (i)
any untrue or alleged untrue statement of material fact contained in the Registration Statement,
prospectus, preliminary prospectus or Free Writing Prospectus or any amendment thereof or
supplement thereto or in any application or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein not
misleading, but, in each case, only to the extent that such untrue statement or omission is made in
such Registration Statement, any such prospectus, preliminary prospectus or Free Writing Prospectus
or any amendment or supplement thereto, or in any application, in reliance upon and in conformity
with written information prepared and furnished to the Company by Culligan expressly for use
therein, and Culligan will reimburse the Company and each such Company Indemnitee for any legal or
any other expenses actually and reasonably incurred by it in connection with investigating,
defending or settling any such Loss; provided that the obligation to indemnify and hold
harmless will be limited in the aggregate to the net amount of proceeds received by Culligan from
the sale of Registrable Securities pursuant to the Registration Statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks indemnification and
(ii) unless in such indemnified party’s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than
one counsel for all parties indemnified by such indemnifying party with respect to such claim (to
the extent such fees and expenses are otherwise indemnifiable hereunder), unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such indemnified party
and any other of such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the registration and sale
of any securities by any Person entitled to any indemnification hereunder and the expiration or
termination of this Agreement.
6
(e) If the indemnification provided for in this Section 5 is unavailable or insufficient for
any reason whatsoever to hold harmless an indemnified party with respect to any Losses or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, will contribute to the amount paid or payable by such indemnified party as a result of
such Losses or expenses in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other hand in connection
with the statements or omissions which resulted in such loss, liability, claim, damage or expense
as well as any other relevant equitable considerations. The relevant fault of the indemnifying
party and the indemnified party will be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the foregoing, the amount Culligan will be obligated to
contribute pursuant to this Section 5(e) will be limited to the net amount of proceeds received by
Culligan from the sale of Registrable Securities pursuant to the Registration Statement (less the
aggregate amount of any damages which Culligan has otherwise been required to pay in respect of
such Losses or any substantially similar Losses arising from the sale of such Registrable
Securities).
6. Ticking Fee.
(a) If either (i) the Registration Statement is not effective on the date which is 181
days after the Closing Date (the “Target Effective Date”) or (ii) the Registrable
Securities are not listed on the securities exchanges provided for in Section 2(i) on the Target
Effective Date, the Company agrees to pay to Culligan the Ticking Fee, during the period from and
including the Target Effective Date to and including the date on which both the Registration
Statement is effective and the Registrable Securities are so listed (the “Ticking Period”).
Any such Ticking Fee shall accrue daily and be payable on the first business day of each month
during the Ticking Period and on the effective date of the Registration Statement. No Ticking Fee
shall accrue or be payable (A) during any extension of the 180-day initial Lock-Up Period
(as such term is used in the Lock-Up Agreement) pursuant to the terms of the Lock-Up Agreement or
(B) to the extent that the Registration Statement is not effective due to Culligan’s
(1) failure to furnish the Company information regarding itself as a selling shareholder ,
the Registrable Securities held by it or its intended method of distribution thereof or (2)
breach of any of its covenants or agreements contained hereunder.
(b) Culligan agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 1(b) or 2(g), Culligan will forthwith discontinue the
disposition of its Registrable Securities pursuant to the Registration Statement until Culligan
receives copies of a supplemented or amended prospectus as contemplated by such section. In the
event the Company gives any such notice, (i) the applicable time period mentioned in
Section 2(b) during which the Registration Statement is to remain effective will be extended by the
number of days during the period from and including the date of the giving of such notice pursuant
to this Section 6(b) to and including the date when Culligan will have received the copies of the
supplemented or amended prospectus contemplated by Section 2(g) and (ii) the Company shall
pay to Culligan the Ticking Fee during the period described in clause (i) of this sentence.
7. Term. This Agreement will be effective as of the Closing Date and will continue in
effect, subject to the terms of Section 5, thereafter until the earliest of (a) its
termination by the consent of the parties hereto or their respective successors in interest,
(b) the date on which the Company is no longer required to keep the Registration Statement
effective pursuant to Section 2(b) and (c) the dissolution, liquidation or winding up of
the Company.
7
8. Defined Terms. Capitalized terms when used in this Agreement have the following
meanings:
“Commission” means the Securities and Exchange Commission or any other federal
agency administering the Securities Act.
“Closing” has the meaning given to such term in the Purchase Agreement.
“Closing Date” has the meaning given to such term in the Purchase Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar
federal statute and the rules and regulations thereunder, as in effect from time to time.
“IPO” has the meaning given to such term in the Purchase Agreement.
“Lock-Up Agreement” has the meaning given to such term in the Purchase Agreement.
“Person” means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a government or
department or agency thereof.
“Registrable Securities” means (i) any equity securities of the Company
issued to Culligan as consideration under the Purchase Agreement, and (ii) any
equity securities issued or issuable directly or indirectly with respect to the securities
referred to in the foregoing clause (i) by way of conversion or exchange thereof or
share dividend or share split or in connection with a combination of shares,
recapitalization, reclassification, merger, amalgamation, arrangement, consolidation or
other reorganization. As to any particular securities constituting Registrable Securities,
such securities will cease to be Registrable Securities when (x) they have been
effectively registered or qualified for sale by prospectus filed under the Securities Act
and disposed of in accordance with the Registration Statement, or (y) they are no
longer owned by Culligan.
“Register,” “registered” and “registration” refers to a registration
effected by preparing and filing a Registration Statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such Registration Statement,
and compliance with applicable state securities laws of such states in which Culligan
notifies the Company of its intention to offer Registrable Securities.
“Registration” means the registration of Registrable Securities required by Section
1.
“Registration Expenses” has the meaning set forth in Section 4(a).
“Registration Statement” means the prospectus and other documents filed with the
Commission to effect the Registration under the Securities Act.
“Rule 144” means Rule 144 under the Securities Act or any successor or similar rule
as may be enacted by the Commission from time to time, as in effect from time to time.
“Rule 415” means Rule 415 under the Securities Act or any successor or similar rule
as may be enacted by the Commission from time to time, as in effect from time to time.
8
“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute and the rules and regulations thereunder, as in effect from time to time.
“Selling Expenses” means all underwriting discounts, selling commissions and
transfer taxes applicable to the sale of Registrable Securities hereunder.
“Shelf Disposition” has the meaning set forth in Section 3.
“Take-Down Notice” has the meaning set forth in Section 3.
“Ticking Fee” means a fee, payable pursuant to Section 6, which shall accrue daily
at the variable rate equal to Culligan’s cost of capital at the time such Ticking Fee is
incurred (not to exceed 12.0% per annum), and be applied to the value of the Registrable
Securities held by Culligan at such time, with such value to be determined by multiplying
the number of Registrable Securities held by Culligan by the price per share at which shares
of Common Stock were first offered to the public in the IPO; provided,
however, that during any period of time with respect to which the Company has
exercised its rights under Section 1(b) the Ticking Fee shall accrue daily at the rate of
9.0% per annum.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates the rights granted
to Culligan in this Agreement.
(b) Remedies. The parties hereto agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and that any party hereto
will have the right to injunctive relief, in addition to all of its other rights and remedies at
law or in equity, to enforce the provisions of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the provisions of
this Agreement may be amended or waived only upon the prior written consent of the parties hereto.
(d) Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, no transferee or assignee of Culligan shall be entitled to have
shares of Common Stock held by it included in the Registration Statement.
(e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or the effectiveness or validity of any provision in any other
jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been contained herein.
(f) Counterparts. This Agreement may be executed simultaneously in two counterparts,
any one of which need not contain the signatures of more than one party, but all such counterparts
taken together will constitute one and the same Agreement.
9
(g) Descriptive Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
(h) Governing Law. This Agreement and the rights and duties of the parties hereto
hereunder shall be governed by and construed in accordance with laws of the State of New York,
without giving effect to its principles or rules of conflict of laws to the extent such principles
or rules are not mandatorily applicable by statute and would require or permit the application of
the laws of another jurisdiction.
(i) Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and will be deemed to
have been given when personally delivered or received by certified mail, return receipt requested,
or sent by guaranteed overnight courier service. Such notices, demands and other communications
will be sent to the Company and Culligan in the manner and at the addresses set forth in the
Purchase Agreement.
[the remainder of this page intentionally left blank]
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| PRIMO WATER CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CULLIGAN INTERNATIONAL COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
