Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
     This REGISTRATION RIGHTS AGREEMENT, dated as of November 10, 2010 (this
“Agreement”), is made between Primo Water Corporation, a Delaware corporation
(the “Company”), and Culligan International Company, a Delaware corporation
(“Culligan”). Certain capitalized terms used in this Agreement are defined in
Section 8. All other capitalized terms used in this Agreement without definition
shall have the meanings ascribed to such terms in the Purchase Agreement (as
defined below).
     A. On June 1, 2010, the Company, Culligan Store Solutions, LLC (“CSS”) and
Culligan of Canada, Ltd. entered into an Asset Purchase Agreement (the “Purchase
Agreement”) pursuant to which two of the Company’s subsidiaries agreed to
acquire certain assets in exchange for cash and Registrable Securities, all as
more fully described in the Purchase Agreement.
     B. CSS has designated that the Registrable Securities to be issued to CSS
pursuant to the Purchase Agreement shall instead be issued directly to Culligan.
     C. Culligan and CSS have entered into the Lock-Up Agreement, restricting
the resale of Registrable Securities as therein provided.
     D. It is a condition to the Closing under the Purchase Agreement that this
Agreement be executed by the parties and delivered to Culligan on the Closing
Date.
     Now, therefore, the parties hereto agree as follows:
     1. Registration of Registrable Securities.
     (a) Registration. The Company will use its commercially reasonable efforts
to register, in accordance with the provisions of this Agreement, all the
Registrable Securities and to have the Registration Statement declared effective
within 181 days of the Closing Date. The Company will pay all Registration
Expenses incurred in connection with the Registration.
     (b) Postponement of Registration or Use of Registration Statement. The
Company may postpone for a reasonable period of time, not to exceed 30 days each
time it exercises its rights under this clause (b), (i) the filing of a
prospectus or the effectiveness of the Registration Statement or (ii) Culligan’s
use of and ability to make sales pursuant to the Registration Statement, if, in
either such case, the Company furnishes to Culligan a certificate signed by the
Chief Executive Officer of the Company stating that the Company believes that
either the Registration or Culligan’s use of or making sales pursuant to the
Registration Statement would be reasonably likely to have a material adverse
effect on any proposal or plan by the Company to engage in any acquisition of
stock or assets (other than in the ordinary course of business) or any merger,
amalgamation, consolidation, tender offer or similar transaction, or otherwise
would require disclosure of material nonpublic information that would not be in
the best interests of the Company and its shareholders; provided that the
Company may not effect such a postponement more than two times in any 12-month
period. If the Company so postpones the filing of a prospectus or the
effectiveness of the Registration Statement, the Company will pay all
Registration Expenses incurred in connection with any such postponement.
     (c) Selection of Underwriters. If Culligan intends to distribute any or all
of the Registrable Securities by means of an underwritten offering, it will so
advise the Company. In such event, Culligan will have the right to select the
investment banker(s) and manager(s) to administer the offering, subject to the
Company’s approval which will not be unreasonably withheld or delayed.

 

--------------------------------------------------------------------------------

 

     2. Registration Procedures. The Company will use its commercially
reasonable efforts to effect the registration and sale of the Registrable
Securities in accordance with Culligan’s intended method of disposition thereof.
Without limiting the generality of the foregoing, the Company will:
     (a) prepare and file the Registration Statement with the Commission, make
all required filings with FINRA and thereafter use its commercially reasonable
efforts to cause the Registration Statement to become effective within 181 days
after the Closing Date; provided that (i) before filing the Registration
Statement or any amendments or supplements thereto, the Company will furnish to
one firm of counsel selected by Culligan copies of all such documents proposed
to be filed; (ii) unless such counsel earlier informs the Company that it has no
objections to the filing of such Registration Statement, amendment or
supplement, the Company will not file such Registration Statement, amendment or
supplement prior to the date that is two Business Days from the date that such
counsel received such document; and (iii) the Company will not file any
Registration Statement or amendment or post-effective amendment or supplement to
such Registration Statement if such counsel has reasonably objected in writing
on the grounds that (and explaining why) such amendment or supplement does not
comply in all material respects with the requirements of the Securities Act or
of the rules or regulations thereunder;
     (b) prepare and file with the Commission such amendments and supplements to
the Registration Statement and such free writing prospectuses under Rule 433
(each, a “Free Writing Prospectus”) as may be necessary to keep the Registration
Statement effective until the earliest of (i) three years from the Closing Date,
(ii) such time as (A) Culligan owns less than 5% of the Company’s outstanding
common stock, $0.01 par value per share (“Common Stock”), and (B) all of the
Registrable Securities held by Culligan at such time could be sold without
restriction in a single transaction under Rule 144, and (iii) such time as all
of the Registrable Securities have been disposed of by Culligan in accordance
with the intended methods of disposition set forth in the Registration Statement
(but in any event not before the expiration of any longer period required under
the Securities Act); provided that, at any time after the Company becomes
eligible to register Common Stock on Form S-3, the Company shall, if either (1)
so requested by Culligan or (2) the Company so chooses, convert the then
effective Registration Statement into a shelf Registration Statement on Form S-3
so as to enable Culligan to sell its Common Stock pursuant thereto from time to
time in accordance with Rule 415;
     (c) comply with the provisions of the Securities Act with respect to the
disposition of the Registrable Securities until such time as all of the
Registrable Securities have been disposed of by Culligan in accordance with the
intended methods of disposition set forth in such Registration Statement;
     (d) furnish to Culligan such number of copies, without charge, of the
Registration Statement, each amendment and supplement thereto, including each
preliminary prospectus, final prospectus, any Free Writing Prospectus, all
exhibits and other documents filed therewith and such other documents as
Culligan may reasonably request in order to facilitate the disposition of the
Registrable Securities;
     (e) use its commercially reasonable efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
United States jurisdictions as Culligan reasonably requests and do any and all
other acts and things that may be reasonably necessary or reasonably advisable
to enable Culligan to consummate the disposition in such jurisdictions of the
Registrable Securities; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
     (f) use its commercially reasonable efforts to cause the Registrable
Securities to be registered with or approved by such other United States
governmental agencies, authorities or self-regulatory bodies as may be necessary
or reasonably advisable in light of the business and operations of

2

--------------------------------------------------------------------------------

 

the Company to enable Culligan to consummate the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof;
     (g) promptly notify Culligan, at any time when a prospectus relating to the
Registration Statement is required to be delivered under the Securities Act,
upon discovery that, or upon the discovery of the happening of any event as a
result of which, the prospectus contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and, as promptly as
practicable but subject to Section 1(b) hereof, prepare and furnish to Culligan
a reasonable number of copies of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
     (h) promptly notify Culligan (i) when the prospectus or any prospectus
supplement or post-effective amendment or any Free Writing Prospectus has been
filed and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or to
amend or to supplement such prospectus or for additional information, and (iii)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for any of
such purposes;
     (i) use its commercially reasonable efforts to cause the Registrable
Securities to be listed, within 181 days after the Closing Date, on each
securities exchange or automated quotation system on which shares of Common
Stock are then listed;
     (j) provide a transfer agent and registrar for the Registrable Securities
not later than the effective date of, or date of the final receipt issued for,
the Registration Statement;
     (k) enter into such customary agreements (including underwriting agreements
with customary provisions) on terms reasonably satisfactory to the Company and
take all such other actions as Culligan or the underwriters, if any, reasonably
request in order to facilitate the disposition of the Registrable Securities;
     (l) upon reasonable advance notice by Culligan, make available for
inspection by Culligan, any underwriter participating in any disposition
pursuant to the Registration Statement and any attorney, accountant or other
agent retained by Culligan or any such underwriter, all relevant financial and
other records, pertinent corporate documents and documents relating to the
business of the Company, and cause the Company’s officers, directors, employees
and independent accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection with
the Registration Statement; provided that Culligan will, and will cause each
such underwriter, accountant or other agent to, (i) enter into a confidentiality
agreement in form and substance reasonably satisfactory to the Company and (ii)
minimize the disruption to the Company’s business in connection with the
foregoing;
     (m) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company’s first full calendar quarter after the effective date of the
Registration Statement, which earnings statement will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;

3

--------------------------------------------------------------------------------

 

     (n) in the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement, or of any order suspending or
preventing the use of any related prospectus or ceasing trading of any
securities included in the Registration Statement for sale in any jurisdiction,
subject to Section 1(b) hereof, use its commercially reasonable efforts promptly
to obtain the withdrawal of such order;
     (o) enter into such agreements and take such other actions as Culligan or
the underwriters, if any, reasonably request in order to facilitate the
disposition of the Registrable Securities, including, without limitation,
preparing for and participating in such number of “road shows” and such other
customary selling efforts as the underwriters reasonably request in order to
facilitate such disposition; provided that, for any underwritten public
offering, (i) Culligan shall provide the Company with at least 10 Business Days
notice prior to any such “road show”, (ii) the Company shall not be obligated to
participate in any “road show” that extends more than 4 Business Days and (iii)
the Company shall have no obligation to participate in more than two “road
shows”.
     (p) for so long as Culligan holds at least 10% of the Company’s outstanding
Common Stock or if such registration includes an underwritten public offering,
upon reasonable notice, obtain one or more comfort letters addressed to Culligan
dated the effective date of the Registration Statement, each amendment and
supplement thereto (and if such registration includes an underwritten public
offering, dated the date of the underwriting agreement for such offering and the
date of the closing under the underwriting agreement for such offering), signed
by the Company’s independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters;
     (q) for so long as Culligan holds at least 10% of the Company’s outstanding
Common Stock or if such registration includes an underwritten public offering,
upon reasonable notice, provide legal opinions of the Company’s outside counsel
addressed to Culligated dated the effective date of the Registration Statement,
each amendment and supplement thereto (and if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement for such offering), with respect to the Registration
Statement, each amendment and supplement thereto (including the preliminary
prospectus) and such other documents relating thereto in customary form and
covering such matters of the type customarily covered by legal opinions of such
nature;
     (r) furnish to Culligan such information and assistance as Culligan may
reasonably request in connection with any “due diligence” effort which Culligan
may reasonably deem appropriate, provided that Culligan shall enter into a
confidentiality agreement in form and substance reasonably satisfactory to the
Company; and
     (s) use its commercially reasonable efforts to take or cause to be taken
all other actions, and do and cause to be done all other things, necessary or
reasonably advisable in the opinion of Culligan to effect the registration of
the Registrable Securities contemplated hereby.
The Company agrees not to file or make any amendment to the Registration
Statement, or any amendment of or supplement to the prospectus or any Free
Writing Prospectus used in connection therewith, that refers to Culligan as a
selling stockholder without the consent of Culligan, such consent not to be
unreasonably withheld or delayed, unless and to the extent such disclosure is
required by law.
The Company may require Culligan to furnish the Company with such information
regarding Culligan and pertinent to the disclosure requirements relating to the
registration and the distribution of such securities as the Company may from
time to time reasonably request in writing.

4

--------------------------------------------------------------------------------

 

     3. Shelf Take-Downs. At any time after the Registration Statement is
converted into a shelf Registration Statement pursuant to the proviso in
Section 2(b), if Culligan delivers a notice to the Company (a “Take-Down
Notice”) stating that it intends to effect a disposition of all or part of the
Registrable Securities (a “Shelf Disposition”) and stating the number of the
Registrable Securities to be included in the Shelf Disposition, then the Company
shall amend or supplement the shelf Registration Statement or related prospectus
as may be necessary in order to enable such Registrable Securities to be
disposed of pursuant to the Shelf Disposition, provided that Culligan shall not
be entitled to deliver (i) an aggregate of more than three Take-Down Notices in
any twelve month period, (ii) any Take-Down Notice within 30 days after the
effective date of any registration statement of the Company hereunder, or (iii)
any Take-Down Notice unless it relates to the anticipated sale of Registrable
Securities with a market value of at least $5.0 million (based upon the market
value of the Company’s Common Stock on the date of the delivery of such
Take-Down Notice).
     4. Registration Expenses. All expenses incidental to the Company’s
performance of or compliance with this Agreement, including, without limitation,
all registration and filing fees, fees and expenses of compliance with United
States securities or blue sky laws, word processing, duplicating and printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
and other Persons retained by the Company in accordance with this Agreement, and
all of the Company’s internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit or quarterly review, the
expenses of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASDAQ (all such
expenses, “Registration Expenses”), will be borne by the Company; provided that
(i) all Selling Expenses and (ii) fees and disbursements of counsel for Culligan
will be borne by Culligan. Notwithstanding the foregoing, the Company shall bear
all of the expenses incurred in connection with the first request by Culligan
(other than in connection with an underwritten public offering) pursuant to
Section 2(p) and Section 2(q) for a comfort letter addressed to Culligan and a
legal opinion of the Company’s outside counsel addressed to Culligan,
respectively, with the expenses for each subsequent comfort letter or legal
opinion (other than in connection with an underwritten public offering) to be
borne 50% by the Company and 50% by Culligan.
     5. Indemnification.
     (a) The Company agrees to indemnify and hold harmless, and hereby does
indemnify and hold harmless, Culligan, its affiliates and their respective
officers, directors and partners and each Person who directly or indirectly
controls Culligan (within the meaning of the Securities Act) (each, a “Culligan
Indemnitee”) against, and pay and reimburse such Culligan Indemnitee for any
losses, claims, damages, liabilities, joint or several, or actions or
proceedings, whether commenced or threatened, in respect thereof, (collectively,
“Losses”) to which such Culligan Indemnitee may become subject under the
Securities Act or otherwise, insofar as such Losses arise out of or are based
upon (i) any untrue or alleged untrue statement of material fact contained in
any Registration Statement, prospectus, preliminary prospectus or Free Writing
Prospectus or any amendment thereof or supplement thereto, (ii) any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (iii) any violation by the
Company of any rule or regulation promulgated under the Securities Act or any
state securities laws applicable to the Company and relating to action or
inaction required of the Company in connection with the Registration, and the
Company will pay and reimburse each such Culligan Indemnitee for any legal or
any other expenses actually and reasonably incurred by them in connection with
investigating, defending or settling any such Losses, provided that the Company
will not be liable in any such case to the extent that any such Losses or
expenses arise out of (i) or are based upon an untrue statement or alleged
untrue statement, or omission or alleged omission, made in such Registration
Statement, any such prospectus, preliminary prospectus or Free Writing
Prospectus or

5

--------------------------------------------------------------------------------

 

any amendment or supplement thereto, or in any application, in reliance upon,
and in conformity with, written information prepared and furnished to the
Company by Culligan expressly for use therein or (ii) facts or circumstances
that resulted in a breach of any representation or warranty of Culligan, CSS or
Culligan of Canada Ltd. in the Purchase Agreement or any document or certificate
delivered pursuant thereto (without regard to any baskets, caps, survival
periods or other limitations on the Company’s (or its subsidiaries’) ability to
make an indemnification claim with respect to any such breach under the Purchase
Agreement. In connection with an underwritten offering, the Company, if
requested, will indemnify such underwriters, their officers and directors and
each Person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the Culligan Indemnitees.
     (b) Culligan will furnish to the Company in writing such information with
respect to itself as the Company reasonably requests for use in connection with
any such Registration Statement or prospectus and, will indemnify and hold
harmless the Company, its directors and officers, and each other Person who
controls the Company (within the meaning of the Securities Act but excluding any
Culligan Indemnitee to the extent it may be deemed to control the Company)
(each, a “Company Indemnitee”) against any Losses to which any such Company
Indemnitee may become subject under the Securities Act or otherwise, insofar as
such Losses arise out of or are based upon (i) any untrue or alleged untrue
statement of material fact contained in the Registration Statement, prospectus,
preliminary prospectus or Free Writing Prospectus or any amendment thereof or
supplement thereto or in any application or (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but, in each case, only to the extent
that such untrue statement or omission is made in such Registration Statement,
any such prospectus, preliminary prospectus or Free Writing Prospectus or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information prepared and furnished to the Company by
Culligan expressly for use therein, and Culligan will reimburse the Company and
each such Company Indemnitee for any legal or any other expenses actually and
reasonably incurred by it in connection with investigating, defending or
settling any such Loss; provided that the obligation to indemnify and hold
harmless will be limited in the aggregate to the net amount of proceeds received
by Culligan from the sale of Registrable Securities pursuant to the Registration
Statement.
     (c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim (to the extent such fees and expenses are otherwise indemnifiable
hereunder), unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
     (d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the registration and sale of any securities
by any Person entitled to any indemnification hereunder and the expiration or
termination of this Agreement.

6

--------------------------------------------------------------------------------

 

     (e) If the indemnification provided for in this Section 5 is unavailable or
insufficient for any reason whatsoever to hold harmless an indemnified party
with respect to any Losses or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
will contribute to the amount paid or payable by such indemnified party as a
result of such Losses or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other hand in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense as
well as any other relevant equitable considerations. The relevant fault of the
indemnifying party and the indemnified party will be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the foregoing, the amount Culligan
will be obligated to contribute pursuant to this Section 5(e) will be limited to
the net amount of proceeds received by Culligan from the sale of Registrable
Securities pursuant to the Registration Statement (less the aggregate amount of
any damages which Culligan has otherwise been required to pay in respect of such
Losses or any substantially similar Losses arising from the sale of such
Registrable Securities).
     6. Ticking Fee.
     (a) If either (i) the Registration Statement is not effective on the date
which is 181 days after the Closing Date (the “Target Effective Date”) or (ii)
the Registrable Securities are not listed on the securities exchanges provided
for in Section 2(i) on the Target Effective Date, the Company agrees to pay to
Culligan the Ticking Fee, during the period from and including the Target
Effective Date to and including the date on which both the Registration
Statement is effective and the Registrable Securities are so listed (the
“Ticking Period”). Any such Ticking Fee shall accrue daily and be payable on the
first business day of each month during the Ticking Period and on the effective
date of the Registration Statement. No Ticking Fee shall accrue or be payable
(A) during any extension of the 180-day initial Lock-Up Period (as such term is
used in the Lock-Up Agreement) pursuant to the terms of the Lock-Up Agreement or
(B) to the extent that the Registration Statement is not effective due to
Culligan’s (1) failure to furnish the Company information regarding itself as a
selling shareholder , the Registrable Securities held by it or its intended
method of distribution thereof or (2) breach of any of its covenants or
agreements contained hereunder.
     (b) Culligan agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 1(b) or 2(g),
Culligan will forthwith discontinue the disposition of its Registrable
Securities pursuant to the Registration Statement until Culligan receives copies
of a supplemented or amended prospectus as contemplated by such section. In the
event the Company gives any such notice, (i) the applicable time period
mentioned in Section 2(b) during which the Registration Statement is to remain
effective will be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to this Section 6(b) to
and including the date when Culligan will have received the copies of the
supplemented or amended prospectus contemplated by Section 2(g) and (ii) the
Company shall pay to Culligan the Ticking Fee during the period described in
clause (i) of this sentence.
     7. Term. This Agreement will be effective as of the Closing Date and will
continue in effect, subject to the terms of Section 5, thereafter until the
earliest of (a) its termination by the consent of the parties hereto or their
respective successors in interest, (b) the date on which the Company is no
longer required to keep the Registration Statement effective pursuant to Section
2(b) and (c) the dissolution, liquidation or winding up of the Company.

7

--------------------------------------------------------------------------------

 

     8. Defined Terms. Capitalized terms when used in this Agreement have the
following meanings:
“Commission” means the Securities and Exchange Commission or any other federal
agency administering the Securities Act.
“Closing” has the meaning given to such term in the Purchase Agreement.
“Closing Date” has the meaning given to such term in the Purchase Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar federal statute and the rules and regulations thereunder, as in effect
from time to time.
“IPO” has the meaning given to such term in the Purchase Agreement.
“Lock-Up Agreement” has the meaning given to such term in the Purchase
Agreement.
“Person” means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a
government or department or agency thereof.
“Registrable Securities” means (i) any equity securities of the Company issued
to Culligan as consideration under the Purchase Agreement, and (ii) any equity
securities issued or issuable directly or indirectly with respect to the
securities referred to in the foregoing clause (i) by way of conversion or
exchange thereof or share dividend or share split or in connection with a
combination of shares, recapitalization, reclassification, merger, amalgamation,
arrangement, consolidation or other reorganization. As to any particular
securities constituting Registrable Securities, such securities will cease to be
Registrable Securities when (x) they have been effectively registered or
qualified for sale by prospectus filed under the Securities Act and disposed of
in accordance with the Registration Statement, or (y) they are no longer owned
by Culligan.
“Register,” “registered” and “registration” refers to a registration effected by
preparing and filing a Registration Statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such Registration
Statement, and compliance with applicable state securities laws of such states
in which Culligan notifies the Company of its intention to offer Registrable
Securities.
“Registration” means the registration of Registrable Securities required by
Section 1.
“Registration Expenses” has the meaning set forth in Section 4(a).
“Registration Statement” means the prospectus and other documents filed with the
Commission to effect the Registration under the Securities Act.
“Rule 144” means Rule 144 under the Securities Act or any successor or similar
rule as may be enacted by the Commission from time to time, as in effect from
time to time.
“Rule 415” means Rule 415 under the Securities Act or any successor or similar
rule as may be enacted by the Commission from time to time, as in effect from
time to time.

8

--------------------------------------------------------------------------------

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute and the rules and regulations thereunder, as in effect from time
to time.
“Selling Expenses” means all underwriting discounts, selling commissions and
transfer taxes applicable to the sale of Registrable Securities hereunder.
“Shelf Disposition” has the meaning set forth in Section 3.
“Take-Down Notice” has the meaning set forth in Section 3.
“Ticking Fee” means a fee, payable pursuant to Section 6, which shall accrue
daily at the variable rate equal to Culligan’s cost of capital at the time such
Ticking Fee is incurred (not to exceed 12.0% per annum), and be applied to the
value of the Registrable Securities held by Culligan at such time, with such
value to be determined by multiplying the number of Registrable Securities held
by Culligan by the price per share at which shares of Common Stock were first
offered to the public in the IPO; provided, however, that during any period of
time with respect to which the Company has exercised its rights under Section
1(b) the Ticking Fee shall accrue daily at the rate of 9.0% per annum.
     9. Miscellaneous.
     (a) No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with or
violates the rights granted to Culligan in this Agreement.
     (b) Remedies. The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and that any party hereto will have the right to injunctive relief, in addition
to all of its other rights and remedies at law or in equity, to enforce the
provisions of this Agreement.
     (c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the parties hereto.
     (d) Successors and Assigns. This Agreement will be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, no transferee or assignee
of Culligan shall be entitled to have shares of Common Stock held by it included
in the Registration Statement.
     (e) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
     (f) Counterparts. This Agreement may be executed simultaneously in two
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement.

9

--------------------------------------------------------------------------------

 

     (g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
     (h) Governing Law. This Agreement and the rights and duties of the parties
hereto hereunder shall be governed by and construed in accordance with laws of
the State of New York, without giving effect to its principles or rules of
conflict of laws to the extent such principles or rules are not mandatorily
applicable by statute and would require or permit the application of the laws of
another jurisdiction.
     (i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered or
received by certified mail, return receipt requested, or sent by guaranteed
overnight courier service. Such notices, demands and other communications will
be sent to the Company and Culligan in the manner and at the addresses set forth
in the Purchase Agreement.
[the remainder of this page intentionally left blank]

10

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

            PRIMO WATER CORPORATION
      By:   /s/ Mark Castaneda        Name: Mark Castaneda       Title:   Chief
Financial Officer       CULLIGAN INTERNATIONAL COMPANY
      By:   /s/ Susan E. Bennett        Name: Susan E. Bennett      
Title:   Senior Vice President, General Counsel &
            Secretary  

[Registration Rights Agreement]