Exhibit 10.24.1
SOUTHWEST WATER
COMPANY
INVESTORS’ RIGHTS
AGREEMENT
February 25, 2000
TABLE OF CONTENTS
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SOUTHWEST WATER
COMPANY
INVESTORS’ RIGHTS
AGREEMENT
This Investors’ Rights
Agreement (the “ Agreement ”) is made as of the
25 th day of February, 2000, by and among SOUTHWEST
WATER COMPANY, a Delaware corporation (the “ Company
”) and the persons listed on Exhibit A hereto, each of
which is herein referred to as an “ Investor ,”
with respect to the following:
RECITALS
A.
Concurrently with the execution and
delivery of this Agreement, the Company is issuing to each Investor
a warrant (each, a “ Warrant ” herein) to
purchase certain common stock, $0.01 par value of the Company (the
“ Common Stock ”).
B.
As a part of the agreement pursuant
to which the Warrants are being issued to the Investors, the
Company and the Investors enter into this Agreement in order to
provide the Investors with (i) certain rights to register shares of
the Common Stock issuable upon exercise of the warrants and (ii)
certain rights to receive or inspect information pertaining to the
Company. The Company and Investors also desire to set forth
certain representations and warranties of Investors applicable with
respect to all Common Stock issued to each Investor upon exercise
of a Warrant.
AGREEMENT
The parties hereby agree as
follows:
1 .
Registration
Rights . The
Company and the Investors covenant and agree as follows:
1.1
Definitions
. For purposes of this Section
1:
(a)
The terms “ register
,” “ registered ,” and “
registration ” refer to a registration effected by
preparing and filing a registration statement or similar document
in compliance with the Securities Act of 1933, as amended (the
“ Securities Act ”), and the declaration or
ordering of effectiveness of such registration statement or
document;
(b)
The term “ Registrable
Securities ” means (i) the share of Common Stock issuable
or issued upon exercise of the Warrants and (ii) any other shares
of Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, the shares listed in
(i); provided , however , that the foregoing
definition shall exclude in all cases any Registrable Securities
sold by a person in a transaction in which his or her rights under
this Agreement are not assigned. Notwithstanding the
foregoing, Common Stock or other securities shall only be treated
as Registrable Securities if and so long as they have not been (A)
sold to or through a broker or dealer or underwriter in a
public
distribution or a public securities transaction,
or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon
the consummation of such sale;
(c)
The number of shares of “
Registrable Securities then outstanding ” shall be
determined by the number of shares of Common Stock outstanding
which are, and the number of shares of Common Stock issuable
pursuant to then exercisable Warrants which are, Registrable
Securities;
(d)
The term “ Holder
” means any person owning or having the right to acquire
Registrable Securities or any assignee thereof in accordance with
Section 1.10 of this Agreement;
(e)
The term “ Form S-3
” means such form under the Securities Act as in effect on
the date hereof or any successor form under the Securities Act;
and
(f)
The term “ SEC ”
means the Securities and Exchange Commission.
1.2
Company
Registration .
If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the
Company for shareholders other than the Holders) any of its Common
Stock under the Securities Act in connection with the public
offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to
participants in a Company stock plan, stock purchase plan or
dividend reinvestment plan or a transaction covered by Rule 145
under the Securities Act, a registration in which the only stock
being registered is Common Stock issuable upon conversion of debt
securities which are also being registered, or any registration on
any form which does not include substantially the same information
as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company
shall, at such time, promptly give each Holder written notice of
such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 5.3, the Company shall, subject
to the provisions of Section 1.6, cause to be registered under the
Securities Act all of the Registrable Securities that each such
Holder has requested to be registered. The so-called
“piggyback” registration rights granted to the Holders
pursuant to this Section are the only registration rights granted
by the Company to the Holders, and the Holders shall have no
so-called “demand” registration rights as to the
Registrable Securities.
1.3
Obligations of the
Company .
Whenever required under this Section 1 to effect the registration
of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a)
Prepare and file with the SEC a
registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred
twenty
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(120) days. The Company shall not be
required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a
distribution of securities on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act.
(b)
Prepare and file with the SEC such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as
may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by
such registration statement for up to one hundred twenty (120)
days.
(c)
Furnish to the Holders such numbers
of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
them.
(d)
Use its best efforts to register and
qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders, provided that
the Company shall not be required in connection therewith or as
condition thereto to qualify to do business or to file general
consent to service of process in any such states or
jurisdictions.
(e)
In the event of any underwritten
public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(f)
Notify each Holder of Registrable
Securities covered by such registration statement 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, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, such obligation to continue for one
hundred twenty (120) days.
(g)
Cause all such Registrable
Securities registered pursuant to this Section 1 to be listed on
each securities exchange on which similar securities issued by the
Company are then listed.
(h)
Provide a transfer agent and
registrar for all Registrable Securities registered pursuant to
this Section 1 and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration.
(i)
Use its best efforts to furnish, at
the request of any Holder requesting registration of Registrable
Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Section 1, if
such securities are being sold through underwriters, or, if
such
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securities are not being sold through
underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated
such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such
date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if
any, and to the Holders requesting registration of Registrable
Securities.
1.4
Furnish
Information . It
shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall
furnish to the Company such information regarding himself or
itself, the Registrable Securities held by him or it, and the
intended method of disposition of such securities as shall be
required to effect the registration of such Holder’s
Registrable Securities.
1.5
Expenses of
Registration . All
expenses including underwriting discounts and commissions incurred
in connection with registrations, filings or qualifications of
Registrable Securities pursuant to this Section 1 for each Holder
(which right may be assigned as provided in Section1.10), including
(without limitation) all registration, filing, and qualification
fees, printers’ and accounting fees, fees and disbursements
of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders
selected by them with the approval of the Company, which approval
shall not be unreasonably withheld, shall be borne by the Company.
Provided, however , that each Holder with Registrable
Securities included in any registration statement pursuant to this
Section 1 shall reimburse the Company for his or its pro rata share
of (a) all costs and expenses of such registration described in
this Section 1.5 and (b) all underwriting discounts and commissions
incurred in connection with such registration, but in an amount not
to exceed One Dollar ($1.00) per share of Registrable Securities
sold by such Holder. As used herein, and subject to the limitation
set forth in the immediately preceding sentence, the pro rata share
of any Holder shall be equal to that portion of the total amount
determined pursuant to clauses (a) and (b) which bears the same
relation to the total as the number of shares of Registrable
Securities sold by such Holder bears to the number of shares
covered by such registration statement.
1.6
Underwriting
Requirements . In
connection with any offering involving an underwriting of shares of
the Company’s capital stock, the Company shall not be
required under this Section 1 to include any of the Holders’
securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select
the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize
the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters
determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in
the offering only that number of such securities, including
Registrable Securities, which the underwriters
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determine in their sole discretion will not
jeopardize the success of the offering (the securities so included
to be apportioned pro rata among the selling shareholders according
to the total amount of securities entitled to be included therein
owned by each selling shareholder or in such other proportions as
shall mutually be agreed to by such selling shareholders). For
purposes of the preceding parenthetical concerning apportionment,
for any selling shareholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners,
retired partners and shareholders of such holder, or the estates
and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single “ selling shareholder ,”
and any pro-rata reduction with respect to such “selling
shareholder” shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and
individuals included in such “selling shareholder,” as
defined in this sentence.
1.7
Delay of
Registration . No
Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.8
Indemnification
. In the event any Registrable Securities are
included in a registration statement under this Section
1:
(a)
To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, any
underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), against
any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations (collectively a “ Violation
”): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and
the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action;
provided , however , that the indemnity agreement
contained in this subsection 1.8(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the
Company be liable to any Holder, underwriter or controlling person
for any such loss, claim, damage, liability, or action to the
extent that it arises out of or
