EXHIBIT 4.2
REGISTRATION AND HOLDBACK AGREEMENT
This Registration and Holdback Agreement (the
"Agreement") is made and entered into as of October 17, 1997, by
and between AquaPenn Spring Water Company, Inc., a Pennsylvania
corporation (the "Company") and Xxxx Markets, Inc., Dutch Valley
Foods, Inc. and Aqua Works, Inc. (collectively, the
"Shareholder").
BACKGROUND
WHEREAS, the Company has advised the Shareholder that
the Company is contemplating an initial public offering (the
"Offering") of shares of Common Stock ("Shares") of the Company;
WHEREAS, the Shareholder desires to offer and sell in
the Offering Shares it owns or which it may acquire; and
[WHEREAS, the Company desires to limit the number of
Shares the Shareholder may sell subsequent to the completion of
the Offering;]
NOW THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Definition. The term "Registrable Securities" means:
(1) all Shares owned beneficially and of record by the
Shareholder on the date hereof, (2) all Shares which Shareholder
may acquire pursuant to exercise of any warrant to purchase
Common Stock of the Company, and (3) any other securities issued
as dividends on, or by way of a split of, the Shares.
2. Registration. If the Company elects to proceed with
the Offering, the Company shall use reasonable efforts to cause
the managing underwriter of the Offering to permit the
Shareholder to include, and if so included, the Shareholder shall
sell 100% of the Registrable Securities in the Offering on the
same terms and conditions as Shares of the Company included
therein, less up to 1,500 Registrable Securities which shall
continue to be held by the Shareholder if requested by the
managing underwriter (the "Odd Lot Shares") (such number to be
equitably adjusted for any stock split or stock dividend).
Notwithstanding the foregoing, if the managing underwriter of the
Offering delivers a written opinion to the Shareholder to the
effect that the total amount of securities which the Shareholder
and the Company propose to offer and sell would materially and
adversely affect the success of the Offering, then the amount of
Registrable Securities to be offered for the account of the
Shareholder shall be reduced to the extent necessary to reduce
the total amount of securities to be included in the Offering to
the amount recommended by such managing underwriter.
3. Restrictions on Sale of Registrable Securities. The
Shareholder agrees not to effect any sale or distribution of
Registrable Securities (other than the Odd Lot Shares) or any
similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, during
the period beginning on the date hereof and ending 180 days after
the effective date of the registration statement filed in
connection with the Offering (the "Effective Date") except as
part of the Offering or to the Company. Notwithstanding anything
else herein, in the event that the Offering is not consummated by
March 31, 1998 or is terminated by the Company, this paragraph 3
shall be null and void, provided that a temporary postponement of
the Offering shall not be deemed to be a termination of the
Offering.
4. Shareholder Obligations.
(a) The Shareholder shall furnish to the Company
such information regarding the distribution of the Registrable
Securities in the Offering as the Company may from time to time
reasonably request.
(b) The Shareholder agrees that, upon receipt of
any notice from the Company of the happening of any event
requiring discontinuance of distribution of Registrable
Securities in the Offering, the Shareholder will forthwith
discontinue disposition of Registrable Securities until such time
as Shareholder receives copies of any supplemented or amended
prospectus necessary to continue the Offering, and, if so
directed by the Company, the Shareholder will deliver to the
Company all copies of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.
(c) The Shareholder agrees to (i) sell its
Registrable Securities at the price and on the basis provided in
any underwriting arrangements approved by the Board of Directors
of the Company or its Pricing Committee, provided that such price
is at least $7 per Share (calculated on a pre-stock split basis),
(ii) complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting
arrangements, and (iii) execute a Custody Agreement and Power of
Attorney, in customary form, in favor of Xxxxxx X. Xxxxx, III and
Xxxxxxxx X. Xxxxxxxxxx, or such other custodian or
attorney-in-fact as may be selected by the Company.
(d) Shareholder shall pay a portion of all the
Company's reasonable expenses related to the Offering equal to
the number of Registrable Securities sold by the Shareholder in
the Offering divided by all Shares sold in the Offering. The
Company's reasonable expenses related to the Offering shall
include without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws,
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printing expenses, messenger and delivery expenses, internal
out-of-pocket expenses, the fees and expenses incurred in
connection with the listing of the Shares on any securities
exchange, fees and disbursements of counsel for the Company and
its independent certified public accountants, securities
liability insurance (if the Company elects to obtain such
insurance), and the reasonable fees and expenses of any other
persons retained by the Company in connection with the Offering.
The Shareholder shall pay the fees and expenses of its own
counsel and underwriting discounts and commissions attributable
to the sale of the Registrable Securities, and its other
out-of-pocket expenses.
(e) Shareholder agrees that in the event that (i)
Shareholder sells less than 99% of the total amount of
Registrable Securities held by Shareholder on the date hereof
(including Shares issuable upon exercise of any warrants held by
Shareholder), on or before the date of the sale of the
Registrable Securities, Shareholder shall cause Xx. Xxxxx to
resign from the Company's Board of Directors and (ii) in the
event that Shareholder sells 99% or more of the total amount of
Registrable Securities held by Shareholder on the date hereof
(including Shares issuable upon exercise of any warrants held by
Shareholder), Shareholder shall cause both Xx. Xxxx and Xx. Xxxxx
to resign from the Board of Directors of the Company.
(f) Shareholder agrees that any warrant held by
Shareholder for the purchase of Shares shall be exercised by
Shareholder prior to sale of the Registrable Securities and
Shareholder hereby waives any rights it has had or will have to
consent to issuances of securities by the Company. Shareholder
agrees that the Custody Agreement and Power of Attorney will
authorize the parties thereto to exercise all of Shareholder's
warrants concurrently with the Offering and deduct the exercise
price therefor from the proceeds of the Offering. Company and
Shareholder agree that any and all other agreements (other than
this Agreement) between Shareholder or any affiliate thereof and
the Company shall terminate and be null and void upon execution
of this Agreement and no party thereto shall have any further
rights or obligations under such agreements, provided that any
agreements related to sale of the Company's bottled water
products shall remain in effect pursuant to the terms thereof.
(g) Shareholder agrees that promptly after
execution of this Agreement, it shall deliver all Registrable
Securities to be sold in the Offering as set forth in Section 2
hereof (including warrants, if applicable) to McQuaide, Blasko,
Xxxxxxxx, Xxxxxxx & Xxxxxxxx, Inc., to be held in escrow by such
firm until the earlier of consummation of the Offering or
execution of the Custody Agreement and Power of Attorney referred
to in Section 4(c) above, at which time such firm shall deliver
such Registered Securities in accordance with such Custody
Agreement and Power of Attorney. In the event the Offering is
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not consummated by March 31, 1998, the Company shall instruct
escrow agent to return all Shareholder's Registrable Securities
and warrants to Shareholder.
5. Miscellaneous.
(a) Agreements and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents hereof may not be given without the written
consent of the Company and the Shareholder.
(b) Notices. Any notice or other communications
required or permitted hereunder shall be deemed validly given
when delivered personally or by telecopier (except for legal
process), or upon receipt when sent by registered or certified
mail or overnight delivery service, addressed as follows or to
such other address or addresses or telecopier number as may
hereafter be furnished in writing:
To the Company:
AquaPenn Spring Water Company
Xxx XxxxXxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: President
To the Shareholder:
At the address set forth in the books and
records of the Company
Notice given by telecopier shall be deemed delivered on the day
the sender receives telecopier confirmation that such notice was
received at the telecopier number of the addressee. Notice given
by mail as set out above shall be deemed received three days
after the date the same is postmarked.
(c) Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each of the parties
hereto and shall inure to the benefit of their respective
successors and permitted assigns. This Agreement shall not be
assignable by the Shareholder, by operation of law or otherwise,
without the prior written consent of the Company.
(d) Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the
Commonwealth of Pennsylvania applicable to contracts made and to
be performed wholly therein without regard to principles of
conflict of laws.
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(e) Entire Agreement. This Agreement is intended by
the Company and the Shareholder to be a complete and exclusive
statement of their agreement and understanding in respect of the
subject matter contained herein and supersedes all prior
agreements and understandings between the parties with respect to
such subject matter.
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IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first above written.
AQUAPENN SPRING WATER COMPANY, INC.
By:/s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------------
XXXX MARKETS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------------
DUTCH VALLEY FOODS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------------
AQUA WORKS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------------
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