1
EXHIBIT 4.2
XXXXXXXXXX.XXX
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of December 31, 1999 by and among Xxxxxxxxxx.xxx, a Delaware corporation (the
"Company"), and holders of the Company's common stock listed on Exhibit A hereto
as the "Holders". The Company and the Holders are sometimes referred to herein
collectively as the "Parties" or individually as a "Party."
RECITAL
WHEREAS, in connection with settlement of certain claims between the
Company and the Holders, the parties hereto desire to enter into this Agreement
to extend registration rights to the Holders.
AGREEMENT
In consideration of the foregoing and of the mutual promises and
covenants contained herein, the Parties agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings.
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time
administering the Securities Act.
(b) "Holder" means any person or persons to whom
Registrable Securities were originally issued or
qualifying transferees under Section 1.9 hereof who
hold Registrable Securities.
(c) "Initiating Holders" shall mean any Holder or Holders
of at least fifty percent (50%) of the Registrable
Securities.
(d) "Registrable Securities" means (i) the common stock
of the Company held by the Holders on the date of
this Agreement; and (ii) stock issued in respect of
the stock referred to in (i) as a result of a stock
split, stock dividend, recapitalization or the like,
which have not been sold to the public.
2
(e) The terms "register," "registered" and "registration"
refer 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.
(f) "Registration Expenses" shall mean all expenses,
except "Selling Expenses" defined below, incurred by
the Company in complying with Sections 1.2, 1.3 and
1.4 hereof, including, without limitation, all
registration, qualification and filing fees, printing
expenses, escrow fees, fees, fees and disbursements
of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident
to or required by any such registration.
(g) "Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and
the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the
time.
(h) "Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer
taxes applicable to the securities registered by the
Holders and all reasonable fees and disbursements of
counsel for the selling Holders.
1.2 Requested Registration.
(a) Request for Registration. If the Company receives from
Initiating Holders a written request that the Company effect a
registration covering not less than thirty percent (30%) of
the Registrable Securities, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all
other Holders; and
(ii) as soon as practicable, use its best efforts to
effect such registration, qualification or compliance
(including, without limitation, appropriate
compliance with applicable regulations issued under
applicable blue sky or other state securities laws
and appropriate compliance with applicable
regulations issued under the Securities Act and any
other governmental requirements or regulations) as
may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of
such Registrable Securities as are specified in such
request, together with all or such portion of the
Registrable Securities as are specified in such
request, together with all or such portion of the
2
3
Registrable Securities of any Holder or Holders
joining in such request as are specified in a written
request received by the Company within twenty days
after receipt of such written notice from the
Company; provided, however, that the Company shall
not be obligated to take any action to effect any
such registrations, qualification or compliance
pursuant to this Section 1.2:
(A) Before the effective date of the
registration statement to be filed
in connection with the common stock
financing currently being arranged
on behalf of the Company by Four
Corners Capitol, LLC (the "Four
Corners Registration Statement");
(B) In any particular jurisdiction in
which the Company would be required
to execute a general consent to
service of process in effecting
such registration, qualification or
compliance unless the Company is
already subject to service in such
jurisdiction and except as may be
required by the Securities Act;
(C) After the Company has effected one
such registration pursuant to this
Section 1.2(a), and such
registrations has been declared or
ordered effective; and has remained
effective for at least 120 days or
such shorter period during which
the distribution described in the
registration statement has been
completed; and
(D) If the Company shall furnish to
such Holders a certificate signed
by the President of the Company
stating that in the good faith
judgment of the Board of Directors
it would be seriously detrimental
to the Company or its shareholders
for a registration statement to be
filed in the near future on the
grounds that such a registration
statement would force premature
disclosure of a material pending
transaction or event of the
Company, then the Company's
obligation to use its best efforts
to register, qualify or comply
under this Section 1.2 shall be
deferred for a period not to exceed
ninety
3
4
days from the date of receipt of
written request from the Initiating
Holders, provided that the Company
may not use this right more than
once in any twelve month period.
Subject to the foregoing clauses (A) through (D), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders. The Company agrees that the Holders, by signing this
Agreement, shall be deemed to have made a written request pursuant to Section
1.2(a) that the Company effect a registration covering 400,000 shares of the
Registrable Securities, and the Company agrees to use it best efforts to file a
registration statement covering such 400,000 shares within 20 business days
after the effective date of the Four Corners Registration Statement.
The Company will use its best efforts to consummate the initial
financing being arranged by Four Corners and to promptly file the Four Corners
Registration Statement thereafter and will make commercially reasonable efforts
to prosecute the Four Corners Registration Statement to effectiveness.
(b) Underwriting. In the event that a registration
pursuant to Section 1.2 is for a registered public
offering involving an underwriting, the Company shall
so advise the Holders as part of the notice given
pursuant to Section 1.2(a)(i). In such event, the
right of any Holder to participate in such
registration shall be conditioned upon such Holder's
participation in the underwriting arrangements
required by this Section 1.2, and the inclusion of
such Holder's Registrable Securities in the
underwriting to the extent requested shall be limited
to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company, but subject to the reasonable approval of a majority in interest
of the Initiating Holders. Notwithstanding any other provision of this Section
1.2, if the managing underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all participating Holders and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocable among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If the underwriter has not limited the number of Registrable Securities to be
underwritten, the Company may include securities for its own account (or for the
account of other shareholders) in such
4
5
registration if the underwriter so agrees and if the number of Registrable
Securities that would otherwise have been included in such registration and
underwriting will not thereby be limited.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders.
1.3 Company Registration.
(a) Notice of Registration. If, at any time prior to the
second anniversary of the effective date of the Four
Corners Registration Statement, the Company shall
determine to register any of its securities, either
for its own account or the account of a security
holder or holders, other than (i) a registration
relating solely to employee benefit plans, (ii) a
registration relating solely to a transaction under
Rule 145 under the Securities Act, (iii) a
registration effected pursuant to Sections 1.2 or 1.4
hereof, or (iv) the Four Corners Registration
Statement or any subsequent registration statement
filed with respect to shares owned by the selling
shareholders in the Four Corners Registration
Statement, the Company will:
(i) Promptly give to each Holder written notice
thereof; and
(ii) Include in such registration (and any
related qualification under blue sky laws or
other compliance), and in any underwriting
involved therein, all the Registrable
Securities specified in a written request or
requests, made within twenty days after
receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the
Company gives notice is for a registered public
offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice
given pursuant to Section 1.3(a)(i). In such event
the right of any Holder to registration pursuant to
Section 1.3 shall be conditioned upon such Holder's
participation in such underwriting to the extent
provided herein. All Holders proposing to distribute
their securities through such underwriting shall
(together with the Company and the other Holders
distributing their securities through such
underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected
for such underwriting by the Company, but subject to
the reasonable approval of Holders holding a majority
of the Registrable Securities to be included in such
registration. Notwithstanding any other provision of
this Section 1.3, if the managing underwriter
determines that marketing factors require limitation
of the number of shares to be underwritten, the
5
6
managing underwriter may limit the Registrable
Securities to be included in such registration. The
Company shall so advise all Holders and the number of
shares of securities that may be included in the
registration and underwriting (other than on behalf
of the Company) shall first be allocated on a pro
rata basis among all other Holders in proportion, as
nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders. No
securities of the Company held by the Holders shall
be included in any registration and underwriting to
which this section applies if the number of shares
held by parties who have exercised a right to demand
the registration of such shares that would otherwise
have been included in such registration and
underwriting will thereby be limited. If any Holder
disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to
the Company and the managing underwriter.
1.4 Selling Expenses. All Selling Expenses relating to securities
registered on behalf of the Holders shall be borne by the
Holders of such securities pro rata on the basis of the number
of shares so registered.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant
to this Section 1, the Company will keep each Holder advised
in writing as to the initiation of each registration and as to
the completion thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its
best efforts to cause such registration statement to
become and remain effective for at least one hundred
twenty days or such shorter period during which the
distribution described in the Registration Statement
has been completed.
(b) Furnish to the Holders participating in such
registration and to the underwriters of the
securities being registered such reasonable number of
copies of the registration statement, preliminary
prospectus, final prospectus and such other documents
as such underwriters may reasonably request in order
to facilitate the public offering of such securities.
(c) Prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection with such
registration statement as may be necessary to comply
with the provisions of the Securities Act with
respect to the disposition of all securities covered
by such registration statement.
6
7
(d) Use its best efforts to register and qualify the
securities covered by such registration statement
under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be
required in connection therewith or as a condition
thereto to qualify to do business or to file a
general consent to service of process in any such
states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an
underwriting agreement, in usual and customary form,
with the managing underwriter of such offering. (Each
Holder participating in such underwriting shall also
enter into and perform its obligations under such an
agreement.)
(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a
prospectus relating thereto is required to be
delivered under the Securities Act of the happening
of any event as a result of which the prospectus
included in such registration statement, as then in
effect, includes an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading in the light of the
circumstances then existing.
(g) Use its best efforts to furnish, at the request of
any Holder requesting registration of Registrable
Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the
underwriters for sale in connection with a
registration pursuant to this Section 1, if such
securities are being sold through underwriters, or,
if such securities are not being sold through
underwriters, on the date that the registration
statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of
such registration, in form and substance as is
customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if
any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated such
date, from the independent certified public
accountants of the Company, in form and substance as
is customarily given by independent certified public
accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable
Securities.
7
8
1.6 Indemnification.
(a) The Company will indemnify each Holder, each of its
officers and directors and partners, and each person
controlling such person within the meaning of Section
15 of the Securities Act, with respect to which
registration, qualification or compliance has been
effected pursuant to this Section 1, and each
underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or
threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material
fact contained in any registration statement,
prospectus, offering circular or other document, or
any amendment or supplement thereto, incident to any
such registration, qualification or compliance, or
based on any omission (or alleged omission) to state
therein a material fact required to be stated therein
or necessary to make the statements therein, in light
of the circumstances in which they were made, not
misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated
under the Securities Act applicable to the Company in
connection with any such registration, qualification
or compliance, and the Company will reimburse each
such Holder, each of its officers and directors, and
each person controlling such Holder, each such
underwriter and each person who controls any such
underwriter, for any legal or any other expenses
reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage,
liability or action, provided that the Company will
not be liable to any such person in any such case to
the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any
untrue statements or omission (or alleged untrue
statement or omission), made in reliance upon and in
conformity with written information furnished to the
Company by an instrument duly executed by such
Holder, controlling person or underwriter and stated
to be specifically for use therein or the preparation
thereby.
(b) Each Holder will, if Registrable Securities held by
such Holder are included in the securities as to
which such registration, qualification or compliance
is being effected, indemnify the Company, each of its
directors and officers, each underwriter, if any, of
the Company's securities covered by such a
registration statement, each person who controls the
Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such
Holder, each of its
8
9
officers and directors and each person controlling
such Holder within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect
thereof) arising out of any untrue statement (or
alleged untrue statement) of a material fact
contained in any such registration statement,
prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances in which they were made, not
misleading, and will reimburse the Company, such
Holders, such directors, officers, persons,
underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim,
loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration
statement, prospectus, offering circular or other
document in reliance upon and in conformity with
written information furnished to the Company by an
instrument duly executed by such Holder and stated to
be specifically for use therein or the preparation
thereby. Notwithstanding the foregoing, the liability
of each Holder under this subsection (b) shall be
limited to an amount equal to the aggregate proceeds
received by such Holder from the sale of Registrable
Securities in such registration.
(c) Each party entitled to indemnification under this
Section 1.7 (the "Indemnified Party") shall give
notice to the party required to provide
indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate
in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this
Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further,
that the Indemnifying Party shall not assume the
defense for matters as to which there is a conflict
of interest or separate and different defenses. No
Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment
or enter into any
9
10
settlement which does not include as an unconditional
term thereof the giving by claimant or plaintiff to
such Indemnified Party of a release from all
liability in respect to such claim or litigation.
1.7 Information by Holder. The Holders of securities included in
any registration shall furnish to the Company such information
regarding such Holders, the Registrable Securities held by
them and the distribution proposed by such Holders as the
Company may request in writing and as shall be required in
connection with any registration, qualification or compliance
referred to in this Section 1.
1.8 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission
which may at any time permit the sale of the Registrable
Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144 under
the Securities Act, at all times.
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents
required of Company under the Securities Act and the
Securities Exchange Act of 1934 (the "Exchange Act").
(c) So long as a Holder owns any Registrable Securities
to furnish to Holder forthwith upon request a written
statement by the Company as to its compliance with
the reporting requirements of said Rule 144 and of
the Securities Act and the Exchange Act, a copy of
the most recent annual or quarterly report of the
Company, and such other reports and documents of the
Company and other information in the possession of or
reasonably obtainable by the Company as a Holder may
reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to
sell any such securities without registration.
1.9 Transfer of Registration Rights. The rights to cause the
Company to register securities granted to the Holders under
this Agreement may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable
Securities by a Holder provided that: (i) such assignment or
transfer may otherwise be effected in accordance with
applicable securities laws, (ii) such assignee or transferee
agrees to be bound by the terms and conditions of this
Agreement, (iii) either (A) such assignee or transferee
acquires at least 100,000 shares of Registrable Securities
(appropriately adjusted for stock splits, combinations,
dividends, distributions and recapitalizations) not sold to
the
10
11
public, or (B) such assignee or transferee is a partner,
shareholder, subsidiary, affiliate, family member, family
trust or the estate of the Holder, and (iv) such assignment
does not increase the number of registration statements the
Company must file.
2. Miscellaneous.
2.1 Governing Law. This Agreement shall be governed in
all respects by the laws of the State of Georgia.
2.2 Survival. The covenants and agreements made herein
shall survive any investigation made by any Holder
and the closing of the settlement contemplated
hereby.
2.3 Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the
parties hereto.
2.4 Entire Agreement. This Agreement constitutes the full
and entire understanding and agreement between the
parties with regard to the subjects hereof, and no
party shall be liable or bound to any other party in
any manner by any covenants or agreements except as
specifically set forth herein.
2.5 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing
and shall be mailed by first class mail, postage
prepaid, certified or registered mail, return receipt
requested, addressed (a) if to any Holder, at such
Holder's address as set forth in the Company's
records, or at such other address as such Holder
shall have furnished to the Company in writing, or
(b) if to the Company, at the Company's address at
0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000, or at such other address as the Company shall
have furnished to such Holders in writing.
2.6 Delays or Omissions. Except as expressly provided
herein, no delay or omission to exercise any right,
power or remedy accruing to any Holder, upon any
breach or default of the Company under this
Agreement, shall impair any such right, power or
remedy of such Holder nor shall it be construed to be
a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach
or default under this Agreement thereafter occurring;
nor shall any waiver of any single breach or default
be deemed a waiver of any other
11
12
breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of
any breach or default under this Agreement, or any
waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and
shall be effective only to the extent specially set
forth in such writing. All remedies either under this
Agreement or by law or otherwise afforded to any
Holder shall be cumulative and not alternative.
2.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an
original, but all of which together shall constitute
one instrument.
2.8 Severability. If any provision of this Agreement, or
the application thereof, shall for any reason and to
any extent be invalid or unenforceable, the remainder
of this Agreement and application of such provision
to persons or circumstances shall be interpreted so
as best to reasonably effect the intent of the
parties hereto. The parties further agree to replace
such void or unenforceable provision of this
Agreement with a valid and enforceable provision
which will achieve, to the extent possible, the
economic, business and other purposes of the void or
unenforceable provision.
This Agreement is hereby executed as of the date first above written.
XXXXXXXXXX.XXX, a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
THE HOLDERS
--------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------------
Xxxxxx XxXxxxxx
12
13
Exhibit A to
Registration Rights Agreement
Name of Holder Number of Shares Owned
-------------- ----------------------
1. Xxxxxxx Xxxxxxx, Xx. 196,520 PLUS 781,776*
2. Xxxxxxx Xxxxxxx, Xx. 56,640 PLUS 344,792
3. Xxxxxx XxXxxxxx 146,840 PLUS 95,215
* Simultaneously with the execution hereof, 127,100 shares have been transferred
to The Community Foundation of Southwest Georgia, Inc. and 69,420 shares have
been transferred to The Community Foundation of Southwest Georgia, Inc. as
Trustee for the Xxxxxxx X. Xxxxxxx, Xx. and Xxxxxx X. Xxxxxxx Charitable
Remainder Unitrust. Upon receipt by the Company of an undertaking that such
transferees agree to be bound by the terms and conditions of this Agreement,
such transferees shall become Holders hereunder.
13
