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Exhibit 4.2
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
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This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made as of March 6, 1997, by and among WATERLINK, INC., a
Delaware corporation (the "Company"), ▇▇▇▇▇▇▇▇ VENTURE PARTNERS III, L.P., a
Delaware limited partnership ("▇▇▇▇▇▇▇▇ Venture"), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an
individual ("▇▇▇▇▇▇▇▇▇"), RIVER CITIES CAPITAL FUND LIMITED PARTNERSHIP, a
Delaware limited partnership ("River Cities"), IPP95, L.P., a Delaware limited
partnership, ("IPP95"), ENVIRONMENTAL OPPORTUNITIES FUND, L.P., a Delaware
limited partnership ("Fund"), ENVIRONMENTAL OPPORTUNITIES FUND (Cayman), L.P., a
Cayman Island exempted limited partnership ("Cayman Fund"), ▇▇▇▇▇▇▇▇ CAPITAL
CORPORATION ("▇▇▇▇▇▇▇▇ Capital") and NATIONAL CITY CAPITAL CORPORATION ("NCC";
▇▇▇▇▇▇▇▇ Venture, River Cities, IPP95, Fund, Cayman Fund, ▇▇▇▇▇▇▇▇ Capital and
NCC are hereinafter collectively referred to as the "Investors").
PRELIMINARY STATEMENTS:
WHEREAS, the Company, ▇▇▇▇▇▇▇▇ Venture, River Cities, IPP95, ▇▇▇▇▇▇▇▇▇,
Fund, and Cayman Fund are parties to a Registration Rights Agreement dated
August 30, 1995 as amended by an Addendum to Registration Rights Agreement dated
September 15, 1995 as further amended by the First Amendment to Registration
Rights Agreement dated June 27, 1996 (collectively, the "Registration
Agreement");
WHEREAS, ▇▇▇▇▇▇▇▇ Capital, NCC, River Cities, Fund, Cayman Fund and
IPP95 (the "Purchasers") desire to purchase warrants to purchase Common Shares
of the Company (the "Warrants") pursuant to a Warrant Agreement, dated as of
March 6, 1997, among the Company and the Purchasers (the "Warrant Agreement");
WHEREAS, it is a condition precedent to the Purchasers' obligations to
consummate the purchase under the Warrant Agreement that the parties hereto
execute and deliver this Agreement;
WHEREAS, the parties hereto wish to amend the terms of the Registration
Agreement in connection with the issuance by the Company of the Warrants and to
make ▇▇▇▇▇▇▇▇ Capital and NCC additional parties to the Registration Agreement;
NOW, THEREFORE, in consideration of the premises and mutual promises of
the parties and as a condition of the issuance of the Warrants by the Company,
the parties hereto agree as follows:
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1. Demand Registrations.
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(a) REQUESTS FOR REGISTRATION. Subject to the terms
and conditions hereof, (i) the holders of at least 30%
(treated as a single class) of the Preferred Securities (as
defined below) and Warrant Shares (as defined below) may
request registration under the Securities Act of 1933, as
amended (the "Securities Act"), of all or part of their
Preferred Securities or Warrant Shares, as the case may be, on
Form S-1 or any similar long-form registration ("Long-Form
Registrations"), and (ii) the holders of at least 30 (treated
as a single class) of the Preferred Securities or Warrant
Shares may request registration under the Securities Act of
all or part of their Preferred Securities or Warrant Shares,
as the case may be, on Form S-2 or S-3 or any similar
short-form registration ("Short-Form Registrations"), if
available, which requests shall specify the approximate number
of Preferred Securities or Warrant Shares requested to be
registered and the anticipated per share price range for such
offering. In the case of any such request, the Company will
give written notice of such requested registration within ten
days of receiving the request therefor to all holders of
Preferred Securities, Warrant Shares, Other Investor Shares
(as defined below) and ▇▇▇▇▇▇▇▇▇ Shares (as defined below) and
will include in such registration all Preferred Securities,
Warrant Shares, Other Investor Shares and shares of Common
Stock, $.001 par value, of the Company purchased by ▇▇▇▇▇▇▇▇▇
pursuant to that certain Stock Purchase Agreement dated
December 9, 1994 among ▇▇▇▇▇▇▇▇ Venture, ▇▇▇▇▇▇▇▇▇ and the
Company ("▇▇▇▇▇▇▇▇▇ Shares") with respect to which the Company
has received written requests for inclusion therein within 15
days after the receipt of the Company's notice. All
registrations requested pursuant to this paragraph l(a) are
referred to herein as "Demand Registrations." Notwithstanding
the foregoing provisions of this Section 1, the timing of the
exercise by the holders of Preferred Securities or Warrant
Shares of their right to request any Demand Registration shall
be subject to the approval of the holders of a majority of the
▇▇▇▇▇▇▇▇▇ Shares, which approval shall not be unreasonably
withheld or delayed. For purposes of calculating the 30%
required to request any Demand Registration pursuant to this
Section 1, a holder or group of holders must hold the
equivalent of at least 30% of common stock, $.001 par value,
of the Company, which have been issued or are issuable upon
conversion of all Preferred Securities, upon exercise of
"Conversion Rights" as defined in the Company's Fourth Amended
and Restated Certificate of Incorporation or upon exercise of
the Warrants as set forth in the Warrant Agreement.
(b) CERTAIN EXPENSES OF REGISTRATIONS. (i) The
holders of Preferred Securities and Warrant Shares, as a
group, will be entitled to request three Demand Registrations
which are Long-Form Registrations, and (ii) the holders of
Preferred Securities and Warrant Shares, as a group, will be
entitled to request an unlimited number of Demand
Registrations which are Short-Form Registrations in which,
except as otherwise required by state securities or blue sky
laws, the Company will pay all Registration Expenses
(collectively, "Company-paid Demand Registrations"). In
addition, the holders of Preferred Securities and Warrant
Shares, as a group, will be entitled to request an
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unlimited number of Demand Registrations which are Long-Form
Registrations in which the holders of the shares to be
registered will pay their shares of the Registration Expenses
as set forth in paragraph 5 hereof; provided, that the
[combined] aggregate offering value of the Preferred
Securities and Warrant Shares requested to be registered in
any Demand Registration must equal at least $3,000,000. A
Demand Registration which is a Long-Form Registration will not
count as one of the permitted Company-paid Demand
Registrations until it has become effective, and neither the
second nor any subsequent Demand Registration which is an
Long-Form Registration will count as one of the permitted
Company-paid Demand Registrations unless the holders of
Preferred Securities and Warrant Shares are able to register
and sell at least 85% of the Preferred Securities and Warrant
Shares requested to be included in such registration;
provided, that in any event the Company will pay all
Registration Expenses in connection with any registration
initiated as a Company-paid Demand Registration whether or not
it has become effective. Demand Registrations will be
Short-Form Registrations whenever the Company is permitted to
use any applicable short form. After the Company has become
subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the Company
will use its best efforts to make Short-Form Registrations
available for the sale of Preferred Securities and Warrant
Shares.
(c) PRIORITY ON DEMAND REGISTRATIONS. The Company
will not include in any Demand Registration any securities
which are not Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares, without the prior written
consent of the holders of a combined majority (treated as a
single class) of the Preferred Securities and Warrant Shares
initially requesting such registration. If a Demand
Registration requested by holders of Preferred Securities or
Warrant Shares is an underwritten offering and the managing
underwriters advise the Company in writing that in their
opinion the number of Preferred Securities, Warrant Shares,
Other Investor Shares, ▇▇▇▇▇▇▇▇▇ Shares and, if permitted
hereunder, other securities requested to be included in such
offering, exceeds the number of securities which can be sold
in an orderly manner in such offering within a price range
acceptable to the holders of a combined majority of the
Preferred Securities (treated as a single class) and Warrant
Shares, the Company will include in such registration (i)
first, the Preferred Securities and Warrant Shares requested
to be included in such registration, pro rata among the
respective holders thereof on the basis of the amount of
Preferred Securities and Warrant Shares owned by each such
holder, (ii) second, the Other Investor Shares and ▇▇▇▇▇▇▇▇▇
Shares requested to be included by the holders thereof in such
registration, pro rata among the respective holders thereof on
the basis of the amount of shares owned by each such holder
(on a fully diluted basis) and (iii) third, other securities
requested to be included in such registration. Any Persons
other than holders of Preferred Securities, Warrant Shares,
Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares who participate in
Demand Registrations which are not at the Company's expense
must pay their respective shares of the Registration Expenses
as provided in paragraph 5 hereof.
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(d) RESTRICTIONS ON REGISTRATIONS. The Company will
not be obligated to effect any Demand Registration within six
months after the effective date of a previous Demand
Registration. The Company may postpone for up to two months
the filing or the effectiveness of a registration statement
for a Demand Registration if the Company and the holders of a
combined majority of the Preferred Securities (treated as a
single class) and the Warrant Shares agree that such Demand
Registration would be substantially disadvantageous to the
Company; provided, that in such event, the holders of
Preferred Securities and Warrant Shares initially requesting
such Demand Registration will be entitled to withdraw such
request and, if such request is withdrawn, such Demand
Registration will not count as one of the permitted Demand
Registrations hereunder, and the Company will pay all
Registration Expenses in connection with such withdrawn
registration; provided further, that the Company may exercise
its right to postpone filings only once within any 18-month
period.
(e) SELECTION OF UNDERWRITERS. The Board of Directors
of the Company shall, by majority vote, have the right to
select the investment banker(s) and manager(s) to administer
any Demand Registration, subject to the approval of the
holders of a majority of the ▇▇▇▇▇▇▇▇▇ Shares, which approval
shall not be unreasonably withheld or delayed.
2. Piggyback Registrations.
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(a) RIGHT TO PIGGYBACK. Whenever the Company proposes
to register any of its securities under the Securities Act
(other than pursuant to a Demand Registration) and the
registration form to be used may be used for the registration
of Preferred Securities, Warrant Shares, Other Investor Shares
or ▇▇▇▇▇▇▇▇▇ Shares (a "Piggyback Registration"), the Company
will give prompt written notice (in any event within five
business days after its receipt of notice of any exercise of
demand registration rights other than under this Agreement) to
all holders of Preferred Securities, Warrant Shares, Other
Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares of its intention to
effect such a registration, and subject to subparagraphs 2(b)
and 2(c) hereof, will include in such registration all
Preferred Securities, Warrant Shares, Other Investor Shares
and ▇▇▇▇▇▇▇▇▇ Shares with respect to which the Company has
received written requests for inclusion therein within 15 days
after the receipt of the Company's notice.
(b) PIGGYBACK EXPENSES. The Registration Expenses of
the holders of Preferred Securities, Warrant Shares, Other
Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares will be paid by the
Company in all Piggyback Registrations.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf
of the Company, and the managing underwriters advise the
Company in writing that in their opinion the number of
securities requested to be included in such registration
exceeds the number which can
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be sold in an orderly manner in such offering within a price
range acceptable to the Company, the Company will include in
such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Preferred Securities and
Warrant Shares requested to be included in such registration,
pro rata among the holders of such Preferred Securities and
Warrant Shares on the basis of the number of shares owned by
each such holder at the time of the filing of the registration
statement, (iii) third, the Other Investor Shares, the
▇▇▇▇▇▇▇▇▇ Shares and the Holders of Registrable Securities (as
defined in that certain Registration Rights Agreement dated
January 31, 1996 between the Company and Mass Transfer
Systems, Inc.) requested to be included by the holders thereof
in such registration, pro rata among the respective holders
thereof on the basis of the amount of shares owned by each
such holder (on a fully diluted basis) at the time of filing
the registration statement and (iv) fourth, all Holders of
Registrable Shares (as defined in that certain Registration
Rights Agreement dated April 26, 1996 between the Company and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and in that certain Registration Rights
Agreement dated September 30, 1996 between the Company and the
Shareholders of Water Equipment Technologies, Inc., a Florida
corporation, listed on Schedule I thereto) in proportion, as
nearly as practicable, to the respective amounts of
Registrable Shares held by such Holders at the time of filing
the registration statement and among holders of other
registration rights that may be granted by the Company in
connection with business acquisitions, mergers, combinations
and the like; and (v) fifth, other securities requested to be
included in such registration.
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a
Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities,
and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be
sold in an orderly manner in such offering within a price
range acceptable to the holders initially requesting such
registration, the Company will include in such registration
(i) first, the securities requested to be included therein by
the holders requesting such registration and the Preferred
Securities and Warrant Shares requested to be included in such
registration, pro rata among the holders of such securities on
the basis of the number of securities owned by each such
holder, (ii) second, the Other Investor Shares and the
▇▇▇▇▇▇▇▇▇ Shares requested to be included in such registration
by the holders thereof, pro rata among the respective holders
thereof on the basis of the amount of shares owned by each
such holder (on a fully diluted basis) and (iii) third, other
securities requested to be included in such registration.
(e) SELECTION OF UNDERWRITERS. If any Piggyback
Registration is an underwritten offering, the selection of
investment banker(s) and manager(s) for the offering shall be
approved by the majority of the Board of Directors of the
Company.
(f) OTHER REGISTRATIONS. If the Company has
previously filed a registration statement with respect to
Preferred Securities or Warrant Shares pursuant to paragraph 1
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or pursuant to this paragraph 2, and if such previous
registration has not been withdrawn or abandoned, the Company
will not file or cause to be effected any other registration
of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities
under the Securities Act (except on Form ▇-▇, ▇▇▇▇ ▇-▇, or any
successor forms), whether on its own behalf or at the request
of any holder or holders of such securities, until a period of
at least six months has elapsed from the effective date of
such previous registration.
3. Holdback Agreements.
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(a) Each holder of Preferred Securities, Warrant
Shares, Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares agrees not
to effect any public sale or distribution (including sales
pursuant to Rule 144 promulgated pursuant to the Securities
Act) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such
securities, during the seven days prior to or during the
90-day period beginning on the effective date of any
underwritten Demand Registration or underwritten Piggyback
Registration in which Preferred Securities, Warrant Shares,
Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares are included (except
for sales of such securities as part of such underwritten
registered offering and as otherwise permitted under Rule
144(k)), unless the underwriters managing the registered
public offering otherwise agree.
(b) The Company agrees (i) not to effect any public
sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and during the
90-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration
or pursuant to registrations on Form ▇-▇, ▇▇▇▇ ▇-▇, or any
successor forms), unless the underwriters managing the
registered public offering otherwise agree, and (ii) to cause
each holder of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity
securities, purchased from the Company at any time after the
date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any
such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise
agree.
4. REGISTRATION PROCEDURES. Whenever the holders of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares
have requested that any Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares, as the case may be, be registered
pursuant to this Agreement, the Company will use its best efforts to
effect the registration and the sale of such Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares in accordance
with the intended method of disposition thereof (including the
registration of warrants held by a holder of Preferred Securities
requesting registration as to which the Company has received reasonable
assurances that only Preferred Securities will be distributed to the
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public), and pursuant thereto the Company will as expeditiously as
possible:
(a) Prepare and file with the Securities and Exchange
Commission a registration statement with respect to such
Preferred Securities, Warrant Shares, Other Investor Shares
and ▇▇▇▇▇▇▇▇▇ Shares and use its best efforts to cause such
registration statement to become effective and remain
effective until the earlier of (i) the date when all Preferred
Securities, Warrant Shares, Other Investor Shares and
▇▇▇▇▇▇▇▇▇ Shares covered by the registration statement have
been sold, or (ii) 180 days from the effective date of the
registration statement; provided, that before filing a
registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel
selected by the holders of a majority (treated as a single
class) of the Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares covered by such
registration, as the case may be, copies of all such documents
proposed to be filed including documents that are to be
incorporated by reference into such registration statement,
amendment or supplement, which documents will be subject to
the review of such counsel, and which proposed registration
statement or amendment or supplement thereto shall not be
filed by the Company if any of such holders reasonably objects
to such filing;
(b) Prepare and file with the Securities and Exchange
commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration
statement effective for the period referred to in paragraph
4(a) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) Furnish to each holder of Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares, as
the case may be, such number of copies of such registration
statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such
holder may reasonable request in order to facilitate the
disposition of the Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares;
(d) Use its best efforts to register or qualify such
Preferred Securities, Warrant Shares, Other Investor Shares or
▇▇▇▇▇▇▇▇▇ Shares under such other securities or blue sky laws
of such jurisdictions as any holder thereof reasonably
requests and dc any and all other acts and things which may be
reasonably necessary or advisable to enable such holder to
consummate the disposition in such jurisdictions of the
Preferred Securities or Warrant Shares owned by such holder;
provided, however, that the Company shall not be required to
qualify to do business or file a general consent to service of
process in any such jurisdiction unless such qualification or
registration is required to qualify such
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securities therein;
(e) Notify each holder of such Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares, as
the case may be, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act,
of the happening of any event as a result of which the
prospectus included in such registration statement contains an
untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and,
at the request of any such holder, the Company will prepare a
supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares, as the case may be, 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;
(f) Promptly notify the holders of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares, as the case may be, and the underwriters, if any, of
the following events and (if requested by any such person)
confirm such notification in writing: (i) the filing of the
prospectus or any prospectus supplement and the registration
statement and any amendment or post-effective amendment
thereto and, with respect to the registration statement or any
post-effective amendment thereto, the declaration of the
effectiveness of such documents, (ii) any requests by the
Securities and Exchange Commission for amendments or
supplements to the registration statement or the prospectus or
for additional information, (iii) the issuance or threat of
issuance by the Securities and Exchange Commission of spending
the effectiveness of the registration any stop order statement
or the initiation of any proceedings for that purpose, and
(iv) the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Preferred Securities, Warrant Shares, Other Investor Shares or
▇▇▇▇▇▇▇▇▇ Shares for sale in any jurisdiction or the
initiation or threat of initiation of any proceeding for such
purpose;
(g) Cause all such Preferred Securities, Warrant
Shares, Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares to be
listed on each securities exchange on which similar securities
issued by the Company are then listed and, if not so listed,
to be listed on the NASD automated quotation system and, if
listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares covered by such registration statement as a NASDAQ
"national market system security" within the meaning of Rule
11Aa2-1 of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares and, without limiting the generality of the foregoing,
to arrange for at least two market makers to register as such
with respect to such Preferred Securities, Warrant Shares,
Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares with the NASD;
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(h) Provide a transfer agent and registrar for all
such Preferred Securities, Warrant Shares, Other Investor
Shares or ▇▇▇▇▇▇▇▇▇ Shares not later than the effective date
of such registration statement;
(i) Enter into such customary agreements (including,
without limitation, underwriting agreements in customary form)
and take all such other actions as the holders of a majority
(treated as a single class) of the Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares
being sold or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such
Preferred Securities, Warrant Shares, Other Investor Shares or
▇▇▇▇▇▇▇▇▇ Shares or ▇▇▇▇▇▇▇▇▇ Shares (including, without
limitation, effecting a stock split or a combination of
shares);
(j) Make available for inspection by any holder of
Preferred Securities, Warrant Shares, or ▇▇▇▇▇▇▇▇▇, any
underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other
agent retained by any such holder or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all
information reasonably requested by any such holder,
underwriter, attorney, accountant or agent in connection with
such registration statement;
(k) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and
Exchange 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 shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(l) Permit any holder of Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares to
participate in the preparation of such registration or
comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be
included, provided that such material shall be furnished under
such circumstances as shall cause it to be subject to the
indemnification provisions provided pursuant to paragraph 6(b)
hereof;
(m) Make every reasonable effort to prevent the entry
of any order suspending the effectiveness of the registration
statement and, in the event of the issuance of any such stop
order, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any
security included in such registration statement for sale in
any jurisdiction, the Company will use its best efforts
promptly to obtain the withdrawal of such order;
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(n) Use its best efforts to cause such Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares covered by such registration statement to be registered
with or approved by such other governmental agencies or
authorities as may be necessary to enable the holders thereof
to consummate the disposition of such Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares;
(o) Cooperate with the selling holders of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares and the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing
Preferred Securities, Warrant Shares, Other Investor Shares or
▇▇▇▇▇▇▇▇▇ Shares to be sold and not bearing any restrictive
legends, and enable such Preferred Securities, Warrant Shares,
Other Investor Shares, or ▇▇▇▇▇▇▇▇▇ Shares to be in such lots
and registered in such names as the underwriters may request
at least two business days prior to any delivery of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares to the underwriters;
(p) Provide a CUSIP number for all Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares not later than the effective date of the registration
statement; and
(q) Prior to the effectiveness of the registration
statement and any post-effective amendment thereto and at each
closing of an underwritten offering, (i) make such
representations and warranties to the selling holders of such
Preferred Securities, Warrant Shares, Other Investor Shares or
▇▇▇▇▇▇▇▇▇ Shares and the underwriters, if any, with respect to
the Preferred Securities, Warrant Shares, Other Investor
Shares or ▇▇▇▇▇▇▇▇▇ Shares and the registration statement as
are customarily made by issuers to underwriters in primary
underwritten offerings, (ii) obtain opinions of counsel to the
Company and updates thereof (which counsel and which opinions
shall be reasonably satisfactory to the underwriters, if any,
and to the holders of a majority of the Preferred Securities
(treated as a single class), Warrant Shares, Other Investor
Shares or ▇▇▇▇▇▇▇▇▇ Shares being sold) addressed to each
selling holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters or their
counsel, (iii) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public
accountants addressed to the selling holders of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in
connection with primary underwritten offerings, and (iv)
deliver such documents and certificates as may be reasonably
requested by the holders of a majority of the Preferred
Securities (treated as a single class), Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares being sold and by the
underwriters, if any, to evidence compliance with clause (i)
above and with any
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customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
5. Registration Expenses.
---------------------
(a) All expenses incident 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 securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees
arid disbursements of counsel for the Company and all
independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons
retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this
Agreement, except that the Company will, in any event, pay its
internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or
quarterly review, the expense 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
NASD automated quotation system.
(b) In connection with each Company-paid Demand
Registration and each Piggyback Registration, the Company will
reimburse the holders of Preferred Securities, Warrant Shares,
Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares covered by such
registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority (treated as a
single class) of the Preferred Securities and Warrant Shares
initially requesting such registration and approved by the
company, which approval shall not be unreasonably withheld or
delayed.
(c) To the extent Registration Expenses are not
required to be paid by the Company, each holder of securities
included in any registration hereunder will pay those
Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses
not so allocable will be borne by all sellers of securities
included in such registration in proportion to the aggregate
selling price of the securities to be so registered.
6. Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent
permitted by law, each holder of Preferred Securities, Warrant
Shares, Other Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares and their
respective officers, directors, partners, successors and
assigns, as the case may be, and each Person who controls any
of the foregoing Persons (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment
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thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such Person
expressly for use therein or by such Person's failure to
deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of
the same. In connection with an underwritten offering, the
Company will indemnify such underwriters, their officers,
directors and partners, as the case may be, 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 holders of Preferred
Securities, Warrant Shares, Other Investor Shares and
▇▇▇▇▇▇▇▇▇ Shares.
(b) In connection with any registration statement in
which a holder of Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares is participating, each
such holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests
for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify
the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement
of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in
any information or affidavit so furnished in writing by such
Person; provided that the obligation to indemnify will be
individual to each holder and will be limited to the net
amount of proceeds received by such holder from the sale of
securities by such holder pursuant to such 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, 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, 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
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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 transfer of securities.
The Company also agrees to make such provisions, as are
reasonably requested by any indemnified party, for
contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless
such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements, and (b)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under
the terms of such underwriting arrangements; provided, that no holder
of Preferred Securities or Warrant Shares included in any underwritten
registration shall be required to make any representations or
warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's
intended method of distribution.
8. REPORTS UNDER THE SECURITIES LAWS. With a view to making
available to the holders of Preferred Securities, Warrant Shares, Other
Investor Shares and ▇▇▇▇▇▇▇▇▇ Shares the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation
of the Securities and Exchange Commission that may at any time permit
such holder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as
those terms are understood and defined in Rule 144, at all
times subsequent to 90 days after the effective date of any
registration statement covering an underwritten public
offering filed under the Securities Act by the Company;
(b) File with the Securities and Exchange Commission
in a timely manner all reports and other documents required of
the Company under the Securities Act and the 1934 Act at any
time after it is subject to such registration requirements and
(c) Furnish to any such holder so long as such holder
owns any of the Preferred Securities, Warrant Shares, Other
Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares so long as forthwith upon
request a written statement by the Company that it has
complied with the reporting requirements of Rule 144 (at any
time after 90 days after the effective date of such
registration statement filed by the Company), and of the
Securities Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as
may be reasonably requested by any such holder
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in availing any such holder of any rule or regulation of the
Securities and Exchange Commission permitting the selling of
any such securities without registration.
9. CERTAIN LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF
REGISTRATION RIGHTS. From and after the date of this Agreement, the
Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company providing for the
granting to such holder of registration rights, without the consent of
the holders of at least sixty percent (60%) of the Preferred Securities
and Warrant Shares (treated as a single class) then outstanding;
provided, however, that the Company may grant registration rights
subordinate to the rights of the holders of the Preferred Securities
and Warrant Shares to effectuate any acquisition or merger approved by
the Company's Board of Directors.
10. TRANSFER OF CERTAIN REGISTRATION RIGHTS. Provided that the
Company is given written notice by the holder of Preferred Securities,
Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇ Shares, as the case
may be, at the time of such transfer stating the name and address of
the transferee and identifying the securities with respect to which the
rights under this Agreement are being assigned, the rights of such
holders under this Agreement may be transferred in whole or in part at
any time, so long as such transfer of securities is in accordance with
all applicable state and federal securities laws and regulations.
11. DEFINITIONS. "Other Investor Shares" means any equity
securities of the Company purchased by an Investor pursuant to a
Purchase Agreement or held by an Investor, other than Preferred
Securities or Warrant Shares.
"Person" means an individual, a partnership a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Securities" means (i) all common stock, par value $.001 per
share, of the Company issued or issuable upon conversion of the shares of Series
A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock issued
to an Investor pursuant to a Purchase Agreement, and (ii) any equity securities
of the Company issued or issuable with respect to the securities referred to in
clause (i) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Preferred Securities, such securities will
cease to be Preferred Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act or sold to the
public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a Person will also be deemed to be a holder of Preferred
Securities whenever such Person has the right to acquire directly or indirectly
such Preferred Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
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"Warrant Shares" means (i) all common stock, par value $.001 per share,
of the Company issued or issuable upon exercise of the Warrants; and (ii) any
equity securities of the Company issued or issuable with respect to the
securities referred to in clause (i) by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Warrant Shares, such
shares will cease to be Warrant Shares when they have been distributed to the
public pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a person will also be deemed to be a holder of Warrant Shares
whenever such person has the right to acquire directly or indirectly such
Warrant Shares (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.
12. Miscellaneous.
-------------
(a) REGISTRATION AGREEMENT SUPERSEDED; NO
INCONSISTENT AGREEMENTS. This Agreement shall supersede and
replace the Registration Agreement. Upon the execution and
delivery of this Agreement by all of the parties hereto, the
Registration Agreement shall be canceled and rendered null and
void and of no further force or effect. The Company will not
hereafter enter into any agreement with respect to its
securities which is inconsistent with or violates the rights
granted to the holders of Preferred Securities or Warrant
Shares in this Agreement.
(b) ADJUSTMENTS AFFECTING PREFERRED SECURITIES. The
Company will not take any action, or permit any change to
occur, with respect to its securities which would materially
and adversely affect the ability of the holders of Preferred
Securities or Warrant Shares to include such Preferred
Securities or Warrant Shares, at the case may be, in a
registration undertaken pursuant to this Agreement or which
would materially and adversely affect the marketability of
such Preferred Securities or Warrant Shares in any such
registration (including, without limitation, effecting a stock
split or a combination of shares).
(c) REMEDIES. Any Person having rights under any
provision of this Agreement will be entitled to enforce such
rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all
other rights granted by law. 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 may in its sole discretion apply to any court of law
or equity of competent jurisdiction (without posting any bond
or other security) for specific performance and for other
injunctive relief in order to enforce or prevent violation of
the provisions of this Agreement.
(d) AMENDMENTS AND WAIVERS. Except as otherwise
provided herein, the
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provisions of this Agreement may be amended or waived only
upon the prior written consent of the Company and the holders
of a [combined] majority of the Preferred Securities (treated
as a single class, but excluding all Preferred Securities held
by the Company, or, to the extent purchased pursuant to
paragraph 3 of that certain Amended and Restated Shareholders
Agreement among the Company, the Investors and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
any Shareholders (as defined in the Amended and Restated
Shareholders Agreement)) and the Warrant Shares; provided,
however, that amendments or waivers of the provisions of this
Agreement which directly relate to the rights of ▇▇▇▇▇▇▇▇▇
require, in addition to the foregoing consents, the prior
written consent of ▇▇▇▇▇▇▇▇▇.
(e) SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any
express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders
of Preferred Securities or Warrant Shares are also for the
benefit of, and enforceable by, any subsequent holder of
Preferred Securities or Warrant Shares, as the case may be.
(f) SEVERABILITY. Whenever possible, each provision
of this Agreement shall 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 prohibited by or invalid under
applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which
need not contain the signatures of more than one party, but
all such counterparts taken together shall constitute one and
the same Agreement.
(h) DESCRIPTIVE HEADINGS; INTERPRETATION. The
descriptive headings of this Agreement are inserted for
convenience only and do not constitute a paragraph of this
Agreement. The use of the word "including" in this Agreement
shall be by way of example rather than by limitation.
(i) GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Ohio.
(j) NOTICES. All notices, demands or other
communications to be given or delivered under or by reason of
the provisions of this Agreement shall be in writing and shall
be delivered personally to the recipient, sent by reputable
express courier service (charges prepaid) or sent by certified
or registered mail, return receipt requested and postage
prepaid and shall be deemed to have been given when so
delivered, sent or deposited in the U.S. Mail. Such notices,
demands and other communications shall be
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sent to the parties hereto and subsequent holders of Preferred
Securities, Warrant Shares, Other Investor Shares or ▇▇▇▇▇▇▇▇▇
Shares, at the addresses of such holders set forth in the
books and records of the Company, or to the attention of such
other person as the recipient party has specified by prior
written notice to the sending party.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement on the date first above written.
WATERLINK, INC.
By:
Its:
▇▇▇▇▇▇▇▇ VENTURE PARTNERS III, L.P.,
By: ▇▇▇▇▇▇▇▇ Venture Management III,
L.P., its general partner
By: Pinkas Family Partners, L.P.,
its general partner
By:
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, its general partner
RIVER CITIES CAPITAL FUND LIMITED
PARTNERSHIP
By: River Cities Management Limited
Partnership, general partner
By: ▇▇▇▇▇▇, Inc., general partner
By:
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, individually
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ENVIRONMENTAL OPPORTUNITIES
FUND, L.P.
By: Environmental Opportunities
Management Co., LLC
Its: General Partner
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Manager
ENVIRONMENTAL OPPORTUNITIES
FUND (CAYMAN), L.P.
By: Environmental Opportunities
Management Co., LLC
Its: General Partner
By:
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Manager
▇▇▇▇▇▇▇▇ CAPITAL CORPORATION
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman, Chief
Executive Officer and Treasurer
NATIONAL CITY CAPITAL CORPORATION
By:
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
IPP95, L.P.
By: WESINVEST, Inc., its general partner
By:
-------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
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