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EXHIBIT 4.3
DRAFT: 5/20/98
Cynara
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated May __, 1998 by and between NATCO
Group Inc., a Delaware corporation (the "Company"), and the undersigned holders
of Common Stock of the Company (the "Designated Stockholders").
R E C I T A L S:
Cap I owns of record and beneficially, after giving effect to the
Stock Split, 4,553,334 shares (68.3%) of the outstanding Common Stock.
Cap II owns of record and beneficially, after giving effect to the
Stock Split, 2,113,334 shares (31.7%) of the outstanding Common Stock.
Together, Cap I and Cap II own of record and beneficially, as of the
date of this Agreement, all the outstanding Common Stock.
The Company, Cap I and Cap II are parties to that certain Securities
Exchange Agreement dated as of March 5, 1998 pursuant to which (i) Cap I and
Cap II have agreed to sell to the Company, and the Company has agreed to
purchase, certain outstanding promissory notes of the Company in exchange for
the issuance by the Company of additional shares of Common Stock and (ii) Cap I
and Cap II will, upon consummation of the transactions contemplated thereby,
own of record and beneficially an aggregate of 5,563,667 shares and 2,582,259
shares, respectively, of Common Stock.
Cap I and Cap II have entered into a Registration Rights Agreement of
even date herewith between the Company and such stockholders which contains
terms and provisions substantially similar to those herein (the "Capricorn
Registration Rights Agreement").
On March 26, 1998, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") dated that date with The Cynara Company, a
Delaware corporation ("Cynara"), pursuant to which Cynara will be merged with
and into a subsidiary of the Company (the "Merger").
The consummation of the Merger is conditioned upon concurrent
consummation of the initial public offering of Common Stock by the Company (the
"Initial Public Offering").
It is a further condition to consummation of the Merger that the
stockholders of Cynara who will become stockholders of the Company upon
consummation of the Merger shall have entered into a registration rights
agreement as contemplated by the Merger Agreement.
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NOW, THEREFORE, for and in consideration of the foregoing, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions and Usage.
A. Definitions. The terms defined in this Section, wherever
used in this Agreement, shall, unless the context otherwise requires, have the
respective meanings hereinafter specified.
"Affected Stockholders" shall mean each Stockholder all or a portion
of whose shares of Common Stock have been included in a Registration Statement
filed with the Commission pursuant to the provisions of this Agreement.
"Agreement" shall mean this Registration Rights Agreement.
"Cap I" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.
"Cap II" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.
"Capricorn Registration Rights Agreement" shall have the meaning
ascribed to such term in the recitals to this Agreement.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Stock" shall mean the Company's authorized Common Stock, par
value $.01 per share.
"Company" shall mean NATCO Group Inc., a Delaware corporation, and any
successor corporation by merger, consolidation or otherwise and any parent
corporation resulting from the merger or consolidation of the Company with or
into a subsidiary of another corporation.
"Cynara" shall mean The Cynara Corporation, a Delaware corporation.
"Designated Stockholders" shall have the meaning ascribed to such term
in the recitals to this Agreement.
"Earnout Shares" shall mean Conditional Accelerated Earnout Shares,
Accelerated Earnout Shares and Earnout Shares as those terms are defined in the
Merger Agreement.
"Effective Period" shall mean such period as shall be required under
the provisions of the Securities Act and the Securities Act Rules for delivery
of a prospectus meeting the requirements of Section 10(a) of the Securities Act
to any Person purchasing Common Stock in connection with
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an Underwritten Public Offering or a Market Public Offering; provided, however,
that such period shall not include any delivery requirement with respect to the
distribution by an underwriter of its unsold allotment relating to an
Underwritten Public Offering.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as the same shall be in effect at the date of any determination to be
made hereunder.
"Exchange Act Rules" shall mean the rules and regulations promulgated
by the Commission under the Exchange Act, as the same shall be in effect at the
date of any determination to be made hereunder.
"Initial Public Offering" shall have the meaning ascribed to such term
in the recitals to this Agreement.
"Market Public Offering" shall mean a public offering for cash of
shares of Common Stock into an existing trading market for outstanding shares
of Common Stock at other than a fixed price on or through the facilities of a
national securities exchange or to or through a market maker otherwise than on
an exchange, but in any case pursuant to a Registration Statement filed and
declared effective under the Securities Act and the Securities Act Rules.
"Merger" shall have the meaning ascribed to such term in the recitals
to this Agreement.
"Merger Agreement" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Notice of Registration Request" shall mean a written notice given by
the Company pursuant to Section 2.A or 4.A to each Stockholder that did not
send the applicable Registration Request, notifying such Stockholders that the
applicable Registration Request has been received by the Company and briefly
advising such Stockholders that they have the right to request Registration for
the distribution of their holdings of Common Stock, subject to the terms and
provisions of this Agreement.
"Person" shall mean an individual, a corporation, a partnership, a
trust, an unincorporated organization or a government or any agency or
political subdivision thereof.
"Primary Distribution" shall mean an Underwritten Public Offering of
Common Stock offered, sold and delivered by the Company.
"Primary Distribution Registration Statement" shall mean a
Registration Statement filed by the Company and declared effective under the
Securities Act and the Securities Act Rules relating to a Primary Distribution.
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"Public Offering" shall mean either an Underwritten Public Offering or
a Market Public Offering.
"Registrable Shares" shall mean shares of Common Stock owned of record
by any Stockholder as to which such Stockholder has requested Registration
pursuant to the provisions of Section 2.A, 3.B or 4.A.
"Registration" shall mean the registration under the registration
provisions of the Securities Act of the offering, sale and delivery of shares
of Common Stock.
"Registration Expenses" shall mean the expenses associated with the
preparation and filing of any registration statement pursuant to Section 2.B,
3.C or 4.B herein and any sale covered thereby (including the reasonable fees
and expenses of legal counsel to the Affected Stockholders, fees related to
blue sky qualifications and filing fees in respect of the National Association
of Securities Dealers, Inc.), but excluding underwriting discounts or
commissions in respect of shares of Common Stock to be sold by the Affected
Stockholders.
"Registration Request" shall mean a written notice from a Stockholder
requesting that the Company file a Registration Statement with respect to an
Underwritten Public Offering pursuant to Section 2.A herein or with respect to
a Public Offering pursuant to Section 4.A herein.
"Registration Period" shall mean the period of time from the decision
of the Company to prepare and file a Registration Statement to and including
the effective date of such Registration Statement.
"Registration Statement" shall mean a registration statement filed on
Form ▇-▇, ▇-▇ or S-3 (or any successor form) under the registration provisions
of the Securities Act and the Securities Act Rules.
"Request Period" shall mean a period of ten business days after
receipt of a Notice of Registration Request from the Company pursuant to
Section 2.A or 4.A by each Stockholder that did not send the applicable
Registration Request.
"Secondary Distribution" shall mean an Underwritten Public Offering of
Common Stock offered, sold and delivered by shareholders of the Company other
than the Stockholders, but including the holders of Common Stock acquired
pursuant to the Merger and subject to the Capricorn Registration Rights
Agreement.
"Secondary Distribution Registration Statement" shall mean a
Registration Statement filed by the Company and declared effective under the
Securities Act and the Securities Act Rules relating to a Secondary
Distribution, including a distribution requested by the shareholders subject to
the Capricorn Registration Rights Agreement.
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"Securities Act" shall mean the Securities Act of 1933, as amended, as
the same shall be in effect at the date of any determination to be made
hereunder.
"Securities Act Rules" shall mean the rules and regulations
promulgated by the Commission pursuant to the Securities Act, as the same shall
be in effect at the date of any determination to be made hereunder.
"Stockholders" shall mean any or all of the Designated Stockholders
and any assignee of shares of Common Stock theretofore held by either of them
(other than any assignee who acquires such shares of Common Stock pursuant to a
Public Offering); provided, however, that such assignee has agreed to be bound
by the provisions of this Agreement in accordance with Section 14 herein.
"Stock Split" shall mean the four-for-three split of the outstanding
Common Stock effected by amendment to the Company's Certificate of
Incorporation on March __, 1998.
"Supplemental Registration Request" shall mean a written notice given
by any Stockholder pursuant to the provisions of Section 2.B, 3.B or 4.A
herein, in which the Stockholder advises the Company as to the number of shares
of Common Stock that the Stockholder wishes to include in the applicable
Registration and in which the Stockholder agrees to (i) the specified method of
distribution, (ii) if applicable, the designated managing underwriter and (iii)
provide to the Company all such information as may be required by the Company
pursuant to Section 6 herein.
"Underwritten Public Offering" shall mean a firm commitment
underwritten public offering for cash of shares of Common Stock pursuant to a
Registration Statement filed and declared effective under the Securities Act
and the Securities Act Rules.
B. Rules of Construction. Unless the context otherwise
requires, as used in this Agreement: (a) a term has the meaning ascribed to
it; (b) "or" is not exclusive; (c) "including" means "including without
limitation;" (d) words in the singular include the plural; (e) words in the
plural include the singular; (f) words applicable to one gender shall be
construed to apply to each gender; (g) the terms "hereof," "herein," "hereby,"
"hereto" and derivative or similar words refer to this entire Agreement; and
(h) the term "Section" shall refer to the specified Section of this Agreement.
Section 2. Registration Rights.
A. Registration Request. If the Company shall receive a
Registration Request from a Stockholder requesting that the Company file a
Registration Statement relating to an Underwritten Public Offering of shares
of Common Stock owned by such Stockholder, the Company shall give promptly (and
in any event within ten business days) a Notice of Registration Request to each
other Stockholder of the receipt of the Registration Request, enclosing a copy
of the Registration Request. During the Request Period, the other Stockholders
shall be entitled to give a Supplemental Registration Request to the Company in
which any or all such Stockholders request that the
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Company register pursuant to the Securities Act and the Securities Act Rules
all or any portion of the shares of Common Stock owned by such Stockholders to
be distributed in an Underwritten Public Offering.
B. Required Registration. At the end of the Request Period, the
Company shall, subject to the provisions of Section 2.C herein, prepare as
promptly as practicable and file a Registration Statement with respect to the
distribution in accordance with the applicable method of distribution of the
Registrable Shares to be included therein and use its best efforts to cause the
Registration Statement to become effective under the Securities Act in
accordance with the Securities Act Rules,.
C. Suspension of Obligations. The Company's obligations under
Section 2.B herein to prepare and file a Registration Statement and to seek its
effectiveness shall be subject to the following provisions:
i. The Company shall be required to file no more than one
(1) Registration Statement pursuant to Section 2.A herein and one (1)
Registration Statement pursuant to Section 4.B herein.
ii. The Company's obligations to prepare, file and seek
effectiveness of a requested Registration Statement shall be
suspended:
(a) if the aggregate number of Registrable Shares
to be included in such requested Registration Statement is
less than 250,000 shares of the then issued and outstanding
Common Stock;
(b) in any case, during the period from the time
that it gives a Notice of Intent to File to Stockholders that
it is preparing to file a Primary Distribution Registration
Statement until 90 days (or such shorter period as to which
the managing underwriter of the Primary Distribution to which
the Primary Distribution Registration Statement relates shall
consent in writing) have lapsed following the effective date
of a Primary Distribution Registration Statement under the
Securities Act; provided, however, that (A) such Notice of
Intent to File is given prior to the time of receipt by the
Company of a Registration Request by any Stockholder and (B)
that the Company shall use its best efforts to cause such
Primary Distribution Registration Statement to be declared
effective as promptly as practicable; and provided, further,
that the obligation to file a Registration Statement on behalf
of any Stockholder shall be reinstated if the Company does not
file a Primary Distribution Registration Statement within 30
days after giving the Notice of Intent to File;
(c) in any case, during the period from the time
that it gives a Notice of Intent to File to Stockholders that
it is preparing to file a Secondary Distribution Registration
Statement (other than for the account of any of the
Stockholders) until 90 days (or such shorter period as to
which the managing underwriter of a Secondary
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Distribution effected by means of a Secondary Distribution
Registration Statement shall consent in writing) have lapsed
following the effective date of the Secondary Distribution
Registration Statement under the Securities Act; provided,
however, that (A) such Notice of Intent to File is given prior
to time of receipt by the Company of a Registration Request by
any Stockholder and (B) that the Company shall use its best
efforts to cause such Secondary Distribution Registration
Statement to be declared effective as promptly as practicable;
and provided further that the obligation to file a
Registration Statement on behalf of any Stockholder shall be
reinstated if the Company does not file a Secondary
Distribution Registration Statement within 30 days after
giving the Notice of Intent to File; or
(d) if at the time of receipt by the Company of a
Registration Request the Company has material inside
information as to which it believes it has a valid business
purpose in refraining from disclosing publicly for the time
being and that current public disclosure of such information
would have a material adverse effect on the Company, for a
period commencing with the date of receipt of the Registration
Request and ending on the earlier of (a) 60 days after such
receipt of the Registration Request; (b) the public
announcement of such material inside information; or (c) the
date on which the Company gives the Stockholder who issued the
Registration Request a notice that suspension of its
obligation is no longer required; provided, however, that the
same material inside information shall not constitute a basis
for continuation of this suspension period.
iii. A Registration Statement filed pursuant to a
Registration Request made under Section 2.B herein shall first include
all Registrable Shares requested to be included by any and all
Stockholders and, only after such inclusion, may include Common Stock
being sold for the account of the Company or any other security
holders. Any Common Stock to be offered on behalf of the Company or
such other security holders will be included in such Registration
Statement only to the extent that, in the reasonable opinion of the
managing underwriter for the Underwritten Public Offering of
Registrable Shares on behalf of Stockholders, such inclusion will not
materially adversely affect the distribution of Registrable Shares on
behalf of such Stockholders.
D. The selection of an underwriter for an Underwritten Public
Offering of Registrable Shares by Stockholders shall be subject to the approval
of the Company, which shall not be unreasonably withheld.
E. For purposes of Section 2.C(i) herein, if a requested
Registration Statement is filed and the Company otherwise complies with its
obligations hereunder, and
i. the Registration Statement is withdrawn with the consent
of the Affected Stockholders as a result of a delay in the offering
requested by the Company, then no requested Registration Statement
shall be deemed to have been filed; or
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ii. the Affected Stockholders cease to prosecute the Public
Offering subject thereto actively and in good faith, the Company shall
have the right to withdraw the Registration Statement without the
consent of the Affected Stockholders and the requested Registration
Statement shall be deemed to have been filed.
Section 3. Incidental/"Piggy-back" Registration.
A. Notice of Intent to File. If the Company at any time
proposes to file a Primary Distribution Registration Statement or a Secondary
Distribution Registration Statement (other than for the account of one or more
Stockholders) under the Securities Act relating to an Underwritten Public
Offering of Common Stock that would permit the inclusion therein of shares of
Common Stock to be distributed in accordance with the method of distribution
contemplated by such Registration Statement, the Company shall give to each
Stockholder a Notice of Intent to File promptly after a determination has been
made by the Company to prepare and file such Registration Statement, but in any
event not less than ten days before the filing with the Commission of such
Registration Statement, which notice shall set forth the intended method of
distribution (including the name of the managing underwriter) of the securities
proposed to be registered. The Notice of Intent to File shall include an offer
to include in such filing, subject to the other provisions of this Agreement,
such amount of Registrable Shares as each Stockholder may request.
B. Supplemental Registration Request. If any Stockholder wishes
to have Registrable Shares (including Earnout Shares) registered pursuant to
this Section 3, it shall advise the Company by giving a Supplemental
Registration Request within 20 days after the date of receipt of the Notice of
Intent to File (or such shorter period, but in any event not less than ten
days, as the Company shall specify in its Notice of Intent to File), setting
forth the amount of Registrable Shares for which Registration is requested.
C. Registration Obligation. Subject to the provisions of the
next sentence, the Company shall include all Registrable Shares specified in
the Supplemental Registration Requests received by it in accordance with
Subsection B of this Section 3. If, however, the managing underwriter of the
proposed Primary Distribution or Secondary Distribution shall advise the
Company in writing that, in the reasonable opinion of such managing
underwriter, the inclusion in the Registration Statement of the aggregate
number of shares of Common Stock requested by the Stockholders to be included
in the Primary Distribution or Secondary Distribution would materially
adversely affect such distribution of securities, then the Company shall so
advise the Affected Stockholders and the number of such shares of Common Stock
included in the Registration Statement shall be reduced to the number
acceptable to such managing underwriter and such reduced number of shares shall
be allocated pro rata among the Affected Stockholders. If any Stockholder does
not agree to the terms of underwriting of such Primary Distribution or
Secondary Distribution, the shares of Common Stock owned by such Stockholder
shall be excluded therefrom by written notice from the Company or such managing
underwriter.
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D. Underwriting Agreement. Any obligation of the Company to
include shares of Common Stock of any Stockholder in a Registration Statement
prepared and filed pursuant to this Subsection 3 shall be conditioned upon the
agreement of such Stockholder to enter into an underwriting agreement with the
Company, other security holders, if any, and the managing underwriter of the
Primary Distribution or the Secondary Distribution of the type described in
Subsection (H) of Section 5.
Section 4. Special Registration Right. Pursuant to the terms of
the Merger Agreement, the Designated Stockholders may in the future receive
Earnout Shares and, in order to provide liquidity to the Designated
Stockholders who receive such Earnout Shares, the Company has agreed to provide
a special right of Registration with respect to such Earnout Shares as in this
Section 4 provided.
A. Notices. If, at any time during the term hereof, (i) some or
all of the Stockholders receive the record and beneficial ownership of Earnout
Shares, whether from the Company upon original issue pursuant to the Merger
Agreement or from one or more Designated Stockholders upon assignment not
involving a Public Offering, (ii), in the opinion of counsel reasonably
satisfactory to the Company, all or part of such Earnout Shares may not be sold
by such Stockholders without registration under the Securities Act or reliance
on an exemption from the registration provisions thereof (other than Section
4(1) of the Securities Act) and (iii) the Company shall receive a Registration
Request from one or more such Stockholders requesting that the Company file a
Registration Statement relating to a Public Offering of shares of Common Stock
owned by such Stockholder or Stockholders, then the Company shall give promptly
(and in any event within ten business days) a Notice of Registration Request to
each other Stockholder who, to the knowledge of the Company, holds Earnout
Shares of the receipt of the Registration Request, enclosing a copy of the
Registration Request. During the Request Period, such other Stockholders shall
be entitled to give a Supplemental Registration Request to the Company in which
any or all such Stockholders request that the Company register pursuant to the
Securities Act and the Securities Act Rules all or any portion of the shares of
Common Stock owned by such Stockholders.
B. Preparation and Filing. After the Request Period, the
Company shall, subject to the provisions of Section 2.C herein, prepare as
promptly as practicable and file a Registration Statement with respect to the
offering, sale and delivery by the Stockholders of all or any part of the
shares of Common Stock constituting Earnout Shares in accordance with the
applicable method of distribution of the Registrable Shares to be included
therein specified in the and use its best efforts to cause the Registration
Statement to become effective under the Securities Act in accordance with the
Securities Act Rules. If so requested by such Affected Stockholders, the
Registration Statement shall be filed pursuant to Rule 415 (relating to "shelf
registration statements") of the Securities Act Rules.
C. Distribution. The applicable method of distribution of the
Registrable Shares shall be as requested by the Affected Stockholders and the
methods of distribution may include, without limitation, a distribution by one
or more broker-dealers named in the Registration Statement "at the market"
pursuant to a Market Public Offering. The Company agrees that it will amend
the
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Registration Statement or supplement the prospectus to include any material
information with respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such information in the
Registration Statement.
D. Limitations. The preparation and filing of a Registration
Statement pursuant to this Section 4 and the offering, sale and delivery of
Registrable Shares pursuant thereto shall be subject to the following
limitations:
i. The Company shall be obligated to prepare, file and cause
to become effective only one Registration Statement pursuant to this
Section 4.
ii. Only Earnout Shares, whether received by a Designated
Stockholder from the Company upon original issue pursuant to the
Merger Agreement or received by another Stockholder from a Designated
Stockholder upon an assignment not involving a Public Offering, may be
included in a Registration Statement filed pursuant to this Section 4,
and no sales of such shares shall be effected by the Affected
Stockholders under such Registration Statement prior to the delivery
to the Company of a certificate of the Affected Stockholders to such
effect.
iii. The proposed and actual filing by the Company of a
Registration Statement pursuant to this Section 4 shall not entitle
any Stockholder to registration rights pursuant to Section 3 herein.
iv. The offering, sale and delivery of Registrable Shares
pursuant to any Registration Statement filed pursuant to Rule 415
(relating to "shelf registration statements") of the Securities Act
Rules under this Section 4 shall be suspended if, at the time of any
offering, sale and delivery pursuant to a shelf registration
statement, the Company has material inside information as to which it
believes it has a valid business purpose in refraining from disclosing
publicly for the time being and that current public disclosure of such
information would have a material adverse effect on the Company. Such
suspension period shall commence upon notice by the Company to the
Affected Stockholders and shall continue until the earlier of (a) the
expiration of 60 days thereafter; (b) the public announcement of such
material inside information; or (c) the date on which the Company
gives the Affected Stockholders notice that such suspension is no
longer required; provided, however, that the same material inside
information shall not constitute a basis for continuation of this
suspension period.
v. The Company shall be obligated to maintain the
effectiveness of a Registration Statement filed pursuant to Rule 415
(relating to "shelf registration statements") of the Securities Act
Rules under this Section 4 until the third anniversary of the
effective date thereof and no longer.
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Section 5. Registration Procedures. If the Company is required
by the provisions of Section 2, 3 or 4 to effect the Registration of any of the
Registrable Shares, the Company shall, as expeditiously as possible:
A. Prepare and file with the Commission a Registration Statement
with respect to such shares of Common Stock and use its best efforts to cause
such Registration Statement to become and, subject to Subsection C of this
Section 5, remain effective.
B. Prepare and file with the Commission during the Registration
Period such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to permit such
Registration Statement to become effective in accordance with the Securities
Act and the Securities Act Rules and to ensure that such Registration Statement
and the prospectus used in connection therewith comply with the disclosure
standards of Section 11 of the Securities Act and Section 10(b) of the Exchange
Act and that such prospectus complies with Section 10 of the Securities Act, in
each case during the Effective Period.
C. Subject to the provisions of Section 4.D herein, use its best
efforts to maintain the effectiveness of such Registration Statement and to
ensure compliance of the prospectus contained therein with Section 10(a) of the
Securities Act for the Effective Period.
D. Furnish to each Affected Stockholder (i) such number of copies of
such Registration Statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
included in such Registration Statement (including each preliminary prospectus,
summary prospectus and prospectus supplement), in conformity with the
requirements of the Securities Act, and such other documents as such Affected
Stockholder may reasonably require in order to facilitate the offering, sale
and delivery or other disposition of the Registrable Shares owned by such
Affected Stockholder and (ii), during the Registration Period and the Effective
Period, copies of any written correspondence or memoranda relating to oral
communications in each case with the Commission and copies of any request by
the Commission for any amendment of or supplement to the Registration Statement
or the prospectus included therein or for additional information.
E. Use its best efforts to register or qualify the Common Stock
covered by such Registration Statement under the securities or blue sky laws of
such jurisdictions as the managing underwriter of such Distribution may
reasonably request (excluding, however, any jurisdiction in which the filing
would subject the Company to additional tax liability and any jurisdiction in
which the Company would thereby be required to execute a general consent to
service of process) and use all reasonable efforts to do such other acts and
things as may be required to enable the Affected Stockholders to consummate the
public sale or other disposition in such jurisdictions of the Registrable
Shares owned by such Affected Stockholders.
F. Make available to its holders of Common Stock, as soon as
reasonably practicable, an earnings statement covering the period of at least
12 months, but not more than 18 months,
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beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
G. Notify each Affected Stockholder immediately if the Company shall
become aware at any time during the Effective Period that the prospectus
included in the Registration Statement, as such prospectus may be amended or
supplemented, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading in light of the circumstances then
existing, and at the request of any Affected Stockholder to prepare promptly
and to furnish to each Affected Stockholder such number of copies of an amended
or supplemental prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Shares, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading in the light of the circumstances then existing.
H. Enter into such agreements (including an underwriting agreement
in customary form and containing customary provisions relating to legal
opinions and accountants' letters, representations and warranties and mutual
indemnification and contribution between the Company and the underwriters for
the Affected Stockholders) and use all reasonable efforts to take such other
actions as the Affected Stockholders may reasonably request in order to
expedite or facilitate the disposition of such Registrable Shares.
I. Make available for inspection by the Affected Stockholders, by
any underwriter participating in any distribution to be effected pursuant to
such Registration Statement and by any attorney, accountant or other agent
retained by Affected Stockholders or any such underwriter all pertinent
financial and other records, pertinent corporate documents and properties of
the Company and cause all of the Company's officers, directors and employees to
supply all such information requested by the Affected Stockholders, such
underwriter, attorney, accountant or agent, as is reasonably needed in
connection with such Registration.
6. Expenses; Limitations on Registration. The Registration
Expenses relating to any Registration effected by the Company pursuant to this
Agreement shall be for the account of the Company; provided, however, that any
and all underwriting discounts and commissions attributable to the sale of the
shares of Common Stock of the Affected Stockholders shall be for the account of
the Affected Stockholders.
For purposes of this Section 6, the Company shall be obligated to pay
the fees and expenses of only one law firm representing the Affected
Stockholders. If more than one such firm shall represent the Affected
Stockholders in connection with a Registration under this Agreement, the
Affected Stockholders shall notify the Company as to which firm shall be deemed
to represent the Affected Stockholders for purposes of this Section 6.
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Section 7. Stockholders' Information. The Affected
Stockholders shall provide all information reasonably requested by the Company
for inclusion in any Registration Statement to be filed hereunder. The actual
provision of such information shall be a condition precedent to the obligation
of the Company to take any action pursuant to this Agreement in respect of the
Registration of Registrable Shares of any Affected Stockholder.
Section 8. Indemnification.
A. In connection with the Registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, the Company agrees to
indemnify and hold harmless each Affected Stockholder, its partners, directors,
officers and employees, and each other Person, if any, who controls such
Affected Stockholder within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Affected Stockholder or any such partner, director, officer, employee or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or any alleged untrue statement of a material fact
contained in the Registration Statement or the prospectus included therein at
the time the Registration Statement is declared effective or any omission or
alleged omission of a material fact required to be stated therein or necessary
in order to make the statements therein not misleading or (ii) any untrue
statement of a material fact or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus, the
prospectus included therein or any amendment or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary in order to make the statements concerning the Company therein, in
the light of the circumstances under which they were made, not misleading and
shall reimburse each Affected Stockholder and each such partner, director,
officer, employee and controlling Person for any legal or other expenses
reasonably incurred by such Affected Stockholder or such partner, director,
officer employee or controlling Person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, prospectus, or amendment
or supplement in reliance upon and in conformity with written information
furnished by or on behalf of an Affected Stockholder to the Company expressly
for use therein; and provided, further, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary prospectus if such
untrue statement or alleged untrue statement or omission or alleged omission
was corrected in the final prospectus included in the Registration Statement at
the time it became effective and the Affected Stockholder, in the case of a
Distribution Public Offering, or the managing underwriter, in the case of an
Underwritten Public Offering, failed to provide the final prospectus as
required by the Securities Act and the Securities Act Rules. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of any Affected Stockholder or any such
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partner, director, officer, employee or controlling Person, and shall survive
the transfer of such securities by any Affected Stockholder.
B. Each Affected Stockholder agrees to indemnify and hold harmless
the Company, its directors, officers and employees, each other Person, if any,
who controls the Company and each other Affected Stockholder against any
losses, claims, damages or liabilities, joint or several, to which the Company,
any such director, officer or employee, any such controlling Person or such
other Affected Stockholder may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or any alleged untrue statement of a material fact
contained in the Registration Statement or the prospectus included therein at
the time the Registration Statement is declared effective or any omission or
alleged omission of a material fact required to be stated therein or necessary
in order to make the statements therein not misleading or (ii) any untrue
statement of a material fact or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus, the
prospectus included therein or any amendment or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary in order to make the statements concerning the Company therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such alleged untrue
statement or alleged omission was made in such Registration Statement,
preliminary prospectus, prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished by or on behalf of an
Affected Stockholder to the Company expressly for use therein, and shall
reimburse the Company or such director, officer, employee or other Person for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability or action.
C. Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a
claim referred to in Subsections (A) and (B) of this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligation
under this Subsection C to the extent the indemnifying party is not materially
prejudiced by such failure. In case any such action is brought against an
indemnified party, the indemnified party shall permit the indemnifying party to
assume the defense of such action or proceeding, provided that counsel for the
indemnifying party, who shall conduct the defense of such action or proceeding,
shall be approved by the indemnified party (whose approval shall not be
unreasonably withheld) and the indemnified party may participate in such
defense (in which case, such participation shall be at such indemnified party's
expense, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified party and the indemnifying party shall exist
in respect of such claim, in which event the indemnifying party shall pay the
reasonable fees and expense of separate counsel for the indemnified party). No
indemnifying party shall consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation. The indemnifying party shall
not, in
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connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm for all
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent.
D. Indemnification similar to that specified in the preceding
Subsections of this Section 8 shall be given by the Company and each Affected
Stockholder (with such modifications as shall be appropriate) with respect to
liability related to any required registration or other qualification of
Registrable Shares under any Federal or state law or regulation of governmental
authority other than the Securities Act.
E. If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
Subsection (A) or (B) above, then the indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in Subsection (A) or (B) above, in
such proportion as is appropriate to reflect the relative fault of the Company,
on the one hand, and each Affected Stockholder, on the other, in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equity considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or such Affected Stockholder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Affected Stockholders agree
that it would not be just and equitable if contributions pursuant to this
Subsection (E) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this Subsection (E). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this Subsection (E) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim (which shall be limited as provided in Subsection (C) above if the
indemnifying party has assumed the defense of any such action in accordance
with the provisions thereof) which is the subject of this Subsection (E).
Notwithstanding the provisions of this Subsection (E), in respect of any loss,
claim, damage or liability based upon any untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact which
relates to information other than information supplied by any Affected
Stockholder, no Affected Stockholder shall be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Shares offered by it and distributed to the public exceeds the amount of any
damages which such Affected Stockholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. Promptly after
receipt by an indemnified party under this Subsection (E) of notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this Subsection
(E), such indemnified party shall notify the indemnifying party in writing of
the commencement thereof if the notice specified in Subsection (C) above has
not
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been given with respect to such action; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party under this Subsection (E) to the extent such omission is
not prejudicial.
Section 9. Public Availability of Information. The Company
shall comply with all public information reporting requirements of the
Commission, to the extent required from time to time to enable each Stockholder
to sell Registrable Shares without Registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any
Stockholder, the Company will deliver to such Stockholder a written statement
as to whether it has complied with such requirements.
Section 10. Supplying Information. The Company shall cooperate
with each Stockholder in supplying such information as may be necessary for
such Stockholder to complete and file any information reporting forms presently
or hereafter required by the Commission as a condition to the availability of
an exemption from the Securities Act for the sale of any Registrable Shares.
Section 11. Specific Performance. Each party hereto acknowledges
and agrees that each other party hereto would be irreparably harmed and would
have no adequate remedy of law if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. Accordingly, it is agreed that, in addition to any other remedies by
law or in equity which may be available, the parties hereto shall be entitled
to obtain preliminary and permanent injunctive relief with respect to any
breach or threatened breach of, or otherwise obtain specific performance of the
covenants and other agreements contained in this Agreement.
Section 12. Representations and Warranties of the Company. The
Company represents and warrants to each Stockholder that, as of the date of
this Agreement, (a) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder, (b) the execution and delivery of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or any of the
transactions contemplated hereby, and (c) this Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding obligation of
the Company, and, assuming that this Agreement constitutes a valid and binding
obligation of each of the Designated Stockholders, is enforceable against the
Company in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and similar laws
affecting creditors' rights generally from time to time and to general
principles of equity, and except as the enforceability thereof may be limited
by considerations of public policy.
Section 13. Representations and Warranties of Cap I and Cap II.
Each of the Designated Stockholders represents and warrants to the Company
that, as of the date of this Agreement, (a) to
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the extent it is a legal entity, it is an organization duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the organizational power and authority to enter into this
Agreement and to carry out its obligations hereunder, (b) to the extent it is a
legal entity, the execution and delivery of this Agreement by such Stockholder
and the consummation by such Stockholder of the transactions contemplated
hereby have been duly authorized by all necessary organizational action on the
part of such Stockholder and no other organizational proceedings on the part of
such Stockholder are necessary to authorize this Agreement or any of the
transactions contemplated hereby, and (c) this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and binding
obligation of such Stockholder and, assuming that this Agreement constitutes a
valid and binding obligation of the Company, is enforceable against such
Stockholder in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and similar laws
affecting creditors' rights generally from time to time and to general
principles of equity, and except as the enforceability thereof may be limited
by considerations of public policy.
Section 14. Expiration. This Agreement and the rights,
benefits, duties and obligations hereunder of the parties hereto and their
successors and permitted assigns shall expire and be of no further force or
effect on May 31, 2004.
Section 15. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or transmitted by telex, telegram or facsimile transmission or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to any Designated Stockholder, to such Designated
Stockholder at the address of such Designated Stockholder
set forth on Annex A hereto
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (215) 851-
(b) if to the Company, to:
NATCO Group, Inc.
Brookhollow Central III
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and Chief
Executive Officer
REGISTRATION RIGHTS AGREEMENT
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 16. Benefit and Assignment.
(a) The terms and conditions of this Agreement shall
inure to the benefit of and be binding on the parties hereto and their
respective successors and permitted assigns; provided, however, that,
except as otherwise provided in this Section, this Agreement shall not
be assignable by any party hereto except by operation of Law or with
the prior express written consent of the other parties hereto.
Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(b) If any Designated Stockholder shall transfer and
assign shares of Common Stock to any Person otherwise than in an
Underwritten Public Offering, such Designated Stockholder (or any
Person who shall be a transferee or assignee pursuant to this
subsection (b)), as the case may be, may assign such portion of its
rights and benefits under this Agreement as is necessary to permit
such Person to act as a Stockholder hereunder; provided, however, that
such Person shall agree in writing to be bound by the duties and
obligations of a Stockholder hereunder.
Section 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to the application of doctrines of conflicts of law.
Section 18. Counterparts. This Agreement may be executed in any
number of counterparts, which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their officers thereunto duly authorized.
NATCO GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
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BY:_____________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
THE DESIGNATED COMPANY STOCKHOLDERS
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
THE 1998 TRUST FOR ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By:_____________________________________
Name:______________________________
Title:_____________________________
BANC ONE CAPITAL PARTNERS II, LTD.
By:_____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signer
REGISTRATION RIGHTS AGREEMENT
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