INVESTOR AND REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN CORRPRO INVESTMENTS, LLC AND CORRPRO COMPANIES, INC. DATED AS OF MARCH 30, 2004

 

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                                                                    Exhibit 10.2

 

                   INVESTOR AND REGISTRATION RIGHTS AGREEMENT

 

                                 BY AND BETWEEN

 

                            CORRPRO INVESTMENTS, LLC

 

                                       AND

 

                             CORRPRO COMPANIES, INC.

 

                           DATED AS OF MARCH 30, 2004

 

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TABLE OF CONTENTS

1.       Definitions.........................................................................................     1

2.       Registration Rights.................................................................................     3

   2.1.           Demand Registrations.......................................................................     3

      (a)               Timing of Demand Registrations.......................................................     3

      (b)               Underwritten Demand Registrations; Priority..........................................     4

      (c)               Number of Demand Registrations.......................................................     5

      (d)               Withdrawal of Registrable Securities.................................................     5

   2.2.           Piggyback Registrations....................................................................     5

      (a)               Request for Piggyback Registration...................................................     5

      (b)               Priority.............................................................................     5

      (c)               Withdrawal of Registrable Securities.................................................     5

      (d)               Right to Terminate Piggyback Registration............................................     6

   2.3.           Hold-Back Agreements.......................................................................     6

   2.4.           Registration Procedures....................................................................     6

      (a)               Obligations of the Company...........................................................     6

      (b)               Holders' Obligation to Furnish Information...........................................     9

   2.5.           Registration Expenses......................................................................     9

   2.6.           Indemnification............................................................................    10

      (a)               Indemnification by Company...........................................................    10

      (b)               Indemnification by Holder of Registrable Securities..................................    10

      (c)               Indemnification Procedures...........................................................    11

      (d)               Contribution.........................................................................    11

      (e)               Other Indemnification................................................................    12

   2.7.           Rule 144...................................................................................    12

   2.8.           Other Registration Rights Agreements.......................................................    12

   2.9.           Adjustments Affecting Registrable Securities...............................................    12

3.       Information Rights..................................................................................    12

4.       Observer Rights.....................................................................................    13

5.       AMEX Listing........................................................................................    13

6.       Voting of Registrable Securities....................................................................    13

7.       Tax Return Preparation Expenses.....................................................................    13

8.       Board of Directors..................................................................................    13

9.       Miscellaneous.......................................................................................    14

   9.1.           Successors and Assigns.....................................................................    14

   9.2.           Governing Law..............................................................................    14

   9.3.           Execution..................................................................................    14

   9.4.           Headings...................................................................................    14

   9.5.           Notices....................................................................................    14

   9.6.           Assignment and Additional Parties..........................................................    15

   9.7.           Amendment of Registration Rights...........................................................    15

   9.8.           Severability...............................................................................    15

   9.9.           Entire Agreement...........................................................................    15

   9.10.          Delays or Omissions........................................................................    16

   9.11.          Interpretation.............................................................................    16

   9.12.          Other Remedies.............................................................................    16

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                   INVESTOR AND REGISTRATION RIGHTS AGREEMENT

 

         THIS INVESTOR AND REGISTRATION RIGHTS AGREEMENT (this "Agreement") is

made and entered into as of the 30th day of March, 2004, by and between CorrPro

Investments, LLC, a Delaware limited liability company ("Investor"), and Corrpro

Companies, Inc., an Ohio corporation (the "Company"). Capitalized terms used

herein but not defined herein shall have the meanings assigned to such terms in

that certain Securities Purchase Agreement, dated as of December 15, 2003, by

and between the Company and Investor (the "Purchase Agreement").

 

                              W I T N E S S E T H:

 

         WHEREAS, the Company and Investor are parties to the Purchase

Agreement, which provides for, among other things, the issuance and sale by the

Company, and the purchase by Investor, of the Securities; and

 

         WHEREAS, in order to induce Investor to enter into the Purchase

Agreement, the Company agreed to provide to Investor the registration rights and

other rights set forth herein; and

 

         WHEREAS, the execution of this Agreement is a condition to the closing

of the transactions contemplated by this Agreement and the other Transaction

Documents;

 

         NOW, THEREFORE, in consideration of the premises, covenants and

agreements contained in this Agreement, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties hereto hereby agree as follows:

 

1.       Definitions. For the purposes of this Agreement, the following terms

shall have the following meanings:

 

         "Affiliate" shall mean, with respect to any Person, any other Person

directly or indirectly controlling (including, without limitation, all

directors, officers, partners and members of such Person), controlled by, or

under direct or indirect common control with, such Person.

 

         "Articles of Incorporation" shall mean the Amended and Restated

Articles of Incorporation of the Company, as amended from time to time.

 

         "Board of Directors" shall mean the Board of Directors of the Company,

including any committees thereof.

 

         "Code of Regulations" shall mean the Amended and Restated Code of

Regulations of the Company, as amended from time to time.

 

         "Common Stock" shall mean the common shares, without par value, of the

Company.

 

         "Demand Registration" shall have the meaning set forth in Section

2.2(a)(i) hereof.

 

         "Equity Securities" shall mean any capital stock or other equity

interests of the Company, or any security convertible into, or exercisable for,

any such capital stock or equity interests, or any security carrying any

warrant, option or other right to subscribe to or purchase any such capital

stock or equity interests.

 

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as

amended, and the rules and regulations promulgated thereunder.

 

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         "Holder" shall mean any Person who is the record holder of, or

otherwise has the right to acquire, Registrable Securities, including such

Person's respective successors and assigns.

 

         "Indemnified Holder" shall mean any Holder of Registrable Securities,

whose Registrable Securities are included in a Registration pursuant to this

Agreement, any partner, member, officer, director, employee, advisor or agent of

any such Holder and any other Person who controls any such Holder within the

meaning of the Securities Act or the Exchange Act.

 

         "Indemnified Party" shall have the meaning set forth in Section 2.6(c)

hereof.

 

         "Indemnifying Party" shall have the meaning set forth in Section 2.6(c)

hereof.

 

         "Initiating Holder" shall have the meaning set forth in Section

2.1(a)(i) hereof.

 

         "Initial Preferred Shares" shall mean 13,000 shares of the Series B

Preferred Stock.

 

         "Investor" shall have the meaning set forth in the preamble hereof.

 

         "Losses" shall mean each and all of the following items: claims, losses

(including, without limitation, losses or earnings), liabilities (joint or

several), obligations, payments, damages (actual or consequential), charges,

judgments, fines, penalties, amounts paid in settlements, costs and expenses

(including, without limitation, interest which may be imposed in connection

therewith, costs and expenses of investigation, actions, suits, proceedings,

demands, assessments and reasonable fees, expenses, disbursements of counsel,

consultants and other experts).

 

         "Original Warrant" shall mean that certain Warrant, dated as of March

30, 2004, issued by the Company to Investor.

 

         "Person" shall mean an individual, corporation, limited liability

company, partnership, trust, incorporated or unincorporated organization, joint

venture, joint stock company, or a government or any agency or political

subdivision thereof or other entity of any kind.

 

          "Piggyback Notice" shall have the meaning set forth in Section 2.2(a)

hereof.

 

         "Piggyback Registration" shall have the meaning set forth in Section

2.2(a) hereof.

 

         "Prior Registrable Securities" shall mean the "Registrable Securities,"

as such term is defined in each of the Prior Registration Rights Agreements.

 

         "Prior Registration Rights Agreements" shall mean (i) that certain

Registration Rights Agreement, dated as of September 23, 2002, by and between

the Company and Bank One, NA and (ii) that certain Registration Rights

Agreement, dated as of September 23, 2002, by and between the Company and The

Prudential Insurance Company of America.

 

         "Prior Rights Holders" shall mean the holders of the Prior Registrable

Securities.

 

         "Purchase Agreement" shall have the meaning set forth in the recitals

herein.

 

         "Prospectus" shall mean the prospectus included in any Registration

Statement, as supplemented from time to time by any and all prospectus

supplements thereto, as amended from time to time by any and

 

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all post-effective amendments thereto, and including all documents, information

and/or other materials incorporated by reference therein.

 

         "Registrable Securities" shall mean (i) the Warrant Shares, (ii) any

securities issued as (or issuable upon the conversion or exercise of any

warrant, right, option or other security that is issued as) a dividend or other

distribution with respect to, or in exchange for or in replacement of, the

Warrant Shares and (iii) any securities issued or issuable in respect of any

Warrant Shares in connection with a merger, consolidation, recapitalization,

reorganization or otherwise; provided, however, that the term "Registrable

Securities" shall not include any Warrant Shares or other shares of Common Stock

that are sold by a Holder to the public pursuant to a Registration Statement or

Rule 144 under the Securities Act.

 

         "Registration" shall mean any Demand Registration or Piggyback

Registration.

 

         "Registration Expenses" shall have the meaning set forth in Section 2.5

hereof.

 

         "Registration Statement" shall mean a registration statement filed by

the Company with the SEC pursuant to the Securities Act and shall include,

without limitation, all financial statements and schedules required by the

Securities Act to be filed with such registration statement, the Prospectus

included in such registration statement, any amendments (including

post-effective amendments), supplements and exhibits to such registration

statement, and all documents, information and/or other materials incorporated by

reference into such registration statement.

 

         "Securities Act" shall mean the Securities Act of 1933, as amended, and

the rules and regulations promulgated thereunder.

 

         "SEC" shall mean the Securities and Exchange Commission, or any

successor agency thereto.

 

         "Series B Preferred Stock" shall mean the Series B Cumulative

Redeemable Voting Preferred Stock, without par value, of the Company.

 

         "Transaction Documents" shall mean, collectively, this Agreement, the

Purchase Agreement, the Securities, the Warrant Agreement, the Services

Agreement, the Amended Articles, the Amended Regulations and all other

agreements executed pursuant to or in connection herewith or therewith, as such

documents may be amended from time to time.

 

         "Warrant" shall mean the Original Warrant and all warrants issued upon

transfer, division or combination of, or in substitution of, the Original

Warrant or any other such warrants.

 

         "Warrant Shares" shall mean the shares of Common Stock issued or

issuable upon exercise of, or in respect of, the Warrant.

 

2.       Registration Rights.

 

         2.1.     Demand Registrations.

 

                  (a)      Requests for Demand Registration.

 

                           (i)      At any time and from time to time after the

date hereof, the Holders of at least thirty percent (30%) of the outstanding

Registrable Securities (the "Initiating Holders") may make a written request for

registration, whether or not such registration involves an underwritten

offering, under the Securities Act of all or any part of such Holder's

Registrable Securities (a "Demand Registration"), which

 

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request shall specify the amount of Registrable Securities to be registered and

the intended method or methods of disposition thereof.

 

                           (ii)     Promptly after receipt by the Company of any

request for a Demand Registration from the Initiating Holders pursuant to this

Section 2.1 (and in any event within five (5) days after such receipt), the

Company shall give written notice of such request to all other Holders of

Registrable Securities from whom written notice has not been received and shall,

subject to the provisions of this Section 2.1, include in such Demand

Registration all Registrable Securities with respect to which the Company

receives written requests (each request specifying the amount of Registrable

Securities to be registered under the Securities Act and the intended method or

methods of disposition thereof) for inclusion therein within ten (10) days after

the date on which the Company delivers its notice pursuant to the preceding

sentence.

 

                           (iii)    As promptly as is reasonably practicable,

but in no event later than sixty (60) days, after receiving any request for a

Demand Registration from the Initiating Holders pursuant to this Section 2.1,

the Company shall prepare and file with the SEC a Registration Statement

registering all Registrable Securities requested to be included in such Demand

Registration and shall use its best efforts to cause such Registration Statement

to become effective as promptly as practicable after the date on which such

Registration Statement was filed with the SEC. The Company shall cause such

Registration Statement to remain continuously effective, supplemented, amended

and current as required by, and subject to, the provisions of Section 2.4 hereof

and in conformity with the requirements of this Agreement, the Securities Act

and the policies, rules and regulations of the SEC as announced from time to

time, until the date on which all Registrable Securities covered by such

Registration Statement shall have been sold. If requested by the Initiating

Holders, such Demand Registration shall provide for the resale, from time to

time, of such Registrable Securities on a delayed or continuous basis pursuant

to Rule 415 under the Securities Act.

 

                  (b)      Underwritten Demand Registrations; Priority.

 

                           (i)      If in connection with a Demand Registration

the Initiating Holders desire to distribute their Registrable Securities by

means of an underwritten offering, they shall so advise the Company as part of

the request delivered to the Company pursuant to Section 2.2(a) hereof. In such

event, the right of any Holder to include its Registrable Securities in such

underwritten Demand Registration shall be conditioned upon such Holder's

participation in such underwritten Demand Registration and the inclusion of such

Holder's Registrable Securities therein. Any Holder who proposes to offer and

sell its Registrable Securities pursuant to such underwritten Demand

Registration shall enter into an underwriting agreement in customary form

(including all questionnaires, powers of attorney, indemnities or other

documents required by such underwriting agreement) with the managing underwriter

or underwriters selected for such underwritten Demand Registration pursuant to

Section 2.2(b)(ii) below.

 

                           (ii)     The managing underwriter or underwriters of

any underwritten public offering of Registrable Securities covered by a Demand

Registration shall be selected by the Holders of a majority of the number of

outstanding Registrable Securities to be included in such Demand Registration.

 

                           (iii)    If the managing underwriter or underwriters

for an underwritten Demand Registration shall advise the Company that, in its

opinion, the inclusion of the amount of Registrable Securities to be sold for

the Holders thereof would create a substantial risk that the proceeds or price

per share to be derived from such Demand Registration will be reduced to a price

range that is below a price range reasonably acceptable to a majority of the

Holders of Registrable Securities requested to be included in such Demand

Registration, then the amount of Registrable Securities to be included in such

Demand Registration shall be allocated (x) first, to the Initiating Holders, (y)

second, to all remaining Holders who did not initiate such Demand Registration

on a pro rata basis, and (z) third, to any other Person on a pro rata basis.

 

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                  (c)      Number of Demand Registrations. The Company shall not

be required to effect more than a total of three (3) Demand Registrations

pursuant to this Section 2.1. For purposes of this Section 2.1, a Demand

Registration shall not be counted as one (1) of the three (3) Demand

Registrations under this Section 2.1 (i) unless the Registration Statement

covering the Registrable Securities that are the subject of such Demand

Registration shall have become effective under the Securities Act and is

maintained effective in accordance with the requirements set forth in Section

2.1(a) hereof, (ii) if, after such Registration Statement has become effective

under the Securities Act, such Demand Registration shall be interfered with by

any stop order, injunction or other order or requirement of the SEC or other

governmental agency or court for any reason so as to materially interfere with

the distribution of Registrable Securities thereunder, (iii) if the conditions

to closing specified in the purchase agreement or underwriting agreement, if

any, entered into in connection with such Demand Registration are not satisfied

or waived, or (iv) if the Holders of Registrable Securities requested to be

included in such Demand Registration are not able to register at least fifty

percent (50%) of the Registrable Securities requested to be included therein .

 

                  (d)      Withdrawal of Registrable Securities. The Initiating

Holders shall be entitled to withdraw a request for a Demand Registration by

providing written notice thereof to the Company, and such request shall not be

counted as a Demand Registration for purposes of this Section 2.1 if the

Initiating Holders shall have paid all Registration Expenses incurred in

connection therewith.

 

         2.2.     Piggyback Registrations.

 

                  (a)      Request for Piggyback Registration. If at any time

after the date hereof the Company proposes to file a Registration Statement

(other than a Registration Statement on Forms S-4 or S-8 or any successor forms

thereto and other than a Registration Statement filed by the Company pursuant to

Section 2.1 hereof) with the SEC to register an offering of Equity Securities or

any other securities for its own account or for the account of any other Person

(a "Piggyback Registration"), the Company shall each such time promptly (but in

any event not less than twenty (20) days prior to the date on which the Company

proposes to file such Registration Statement with the SEC) provide written

notice thereof to each Holder of Registrable Securities (i) describing the terms

and conditions of such Piggyback Registration, (ii) identifying the form of

Registration Statement that the Company proposes to file in connection with such

Piggyback Registration and (iii) offering to include in such Piggyback

Registration all Registrable Securities held by each such Holder (a "Piggyback

Notice"). The Company shall include in such Piggyback Registration all

Registrable Securities for which the Company has received from the Holders

thereof for inclusion therein written requests within thirty (30) days of the

date on which such Piggyback Notice was given by the Company. Notwithstanding

anything to the contrary contained herein, no Piggyback Registration shall be

deemed to constitute a Demand Registration.

 

                  (b)      Priority. If the managing underwriter or underwriters

for a Piggyback Registration involving an underwritten offering in which

Registrable Securities are proposed to be included pursuant to this Section 2.2

shall advise the Company that, in its opinion, the inclusion of the amount of

Registrable Securities to be sold for the account of Holders would (i) create a

substantial risk that the proceeds or price per share to be derived from such

Piggyback Registration will be materially reduced or (ii) materially and

adversely affect such Piggyback Registration in any other respect, then the

number of securities to be included in such Piggyback Registration shall be

allocated (1) first, to the Company, (2) second, to the Holders and, if

applicable, the Prior Rights Holders on a pro rata basis, and (3) third, to any

other Person on a pro rata basis.

 

                  (c)      Withdrawal of Registrable Securities. If, as a result

of the proration provisions of Section 2.2(b), any Holder shall not be entitled

to include all of such Holder's Registrable Securities in a Piggyback

Registration that such Holder has requested be included, such Holder may elect

to withdraw its Registrable Securities from such Piggyback Registration;

provided, however, that such withdrawal

 

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election shall be irrevocable and, after making such withdrawal election, a

Holder shall no longer have any right to include Registrable Securities in the

Piggyback Registration as to which such withdrawal election was made.

 

                  (d)      Right to Terminate Piggyback Registration. If at any

time prior to the date on which the Registration Statement for a Piggyback

Registration is declared effective by the SEC the Company shall determine for

any reason to terminate such Piggyback Registration, the Company shall provide

written notice of such determination to each Holder of Registrable Securities

and, thereupon, shall be relieved of its obligations to register any Registrable

Securities in connection with such Piggyback Registration, without prejudice,

however, to the rights of Holders of Registrable Securities to request that such

terminated Piggyback Registration be effected as a Demand Registration;

provided, however, that the Company shall pay all Registration Expenses incurred

by a Holder of Registrable Securities or otherwise in connection with such

terminated Piggyback Registration.