REGISTRATION RIGHTS AGREEMENT
Exhibit
4.4
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of July __, 2017 by and among Youngevity International, Inc., a
Delaware corporation (the “Company”), and the
purchasers listed on Schedule I hereto (the
“Purchasers”).
This
Agreement is being entered into pursuant to the Note Purchase
Agreement dated as of the date hereof among the Company and the
Purchasers (the “Purchase
Agreement”).
The
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms
used and not otherwise defined herein shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
“Advice” shall have
meaning set forth in Section 3(m).
“Affiliate” means, with
respect to any Person, any other Person which directly or
indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person. For
the avoidance of doubt, with respect to a Purchaser which is a
general or limited partnership, an Affiliate shall be deemed to
include affiliated partnerships managed by the same management
company or managing general partner or by an entity which controls,
is controlled by, or is under common control with, such management
company or managing general partner.
“Board” shall have meaning
set forth in Section 3(n).
“Business Day” means any
day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of New
York generally are authorized or required by law or other
government actions to close.
“Closing Date” means the
date of the closing of the purchase and sale of the Units pursuant
to the Purchase Agreement.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means the
Company’s common stock, par value $0.001 per
share.
“Control” (including the
terms “controlling”, “controlled by” or
“under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or
otherwise.
“Effectiveness Date” means
with respect to the Registration Statement under Section 2(a), the
earlier of: (A) the one eightieth (180th) day following the
later to occur of: (i) the Final Closing Date; or (ii) or in the
event the Registration Statement receives a “full
review” by the Commission, the two hundred and tenth
(210th)
following the Final Closing Date; or (B) the date which is within three (3) Business Days
after the date on which the Commission informs the Company: (i)
that the Commission will not review the Registration Statement; or
(ii) that the Company may request the acceleration of
the effectiveness of the Registration Statement;
provided,
however,
that if the Effectiveness Date falls on a Saturday, Sunday
or any other day which shall be a legal holiday or a day on which
the Commission is authorized or required by law or other government
actions to close, the Effectiveness Date shall be the following
Business Day.
“Effectiveness Period”
shall have the meaning set forth in Section 2(a).
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“Event” shall have the
meaning set forth in Section 7(c).
“Event Date” shall have
the meaning set forth in Section 7(c).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Filing Date” means with
respect to a Registration Statement under Section 2(a), the date
that is the ninetieth (90th) day following the
later to occur of: (i) the Final Closing Date; or (ii) the
effective date of the Prior Registration Statement; provided, however that if the Filing Date falls on a Saturday,
Sunday or any other day which shall be a legal holiday or a day on
which the Commission is authorized or required by law or other
government actions to close, the Filing Date shall be the following
Business Day.
“Holder” or
“Holders” means the holder
or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified Party” shall
have the meaning set forth in Section 5(c).
“Indemnifying Party” shall
have the meaning set forth in Section 5(c).
“Losses” shall have the
meaning set forth in Section 5(a).
“Offering” means the
offering made pursuant to Section 4(a)(2) of the Securities Act and
Rule 506 promulgated thereunder of Units of Securities of the
Company pursuant to the Purchase Agreement.
“Person” means an
individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
“Prospectus” means the
prospectus included in the Registration Statement (including,
without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
“Purchase Agreement” means
the Note Purchase Agreement, dated as of July [ ], 2017 between the
Company and each of the Purchasers.
“Registrable Securities”
means, collectively (i) the shares of
Common Stock issuable upon conversion of the 8% convertible notes
(the “Notes”)
issued in the Offering (the “Note Shares”); (ii) the
shares of Common Stock issuable upon exercise of the Series D
warrants (the “Warrants”) issued in the Offering (the
“Warrant
Shares”); (iii) the
shares of Common Stock underlying the warrants issued to the
Placement Agent pursuant to the Purchase Agreement (the
“Placement Agent Shares”); and (iv) any securities
issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the
foregoing; provided, that the Holder has
completed and delivered to the Company a Selling Stockholder
Questionnaire; and provided, further, that the Note Shares,
Warrant Shares and placement Agent Shares shall cease to be
Registrable Securities upon the earlier to occur of the following:
(A) sale pursuant to a Registration Statement or Rule 144 under the
Securities Act (in which case, only such security sold shall cease
to be a Registrable Security), (B) becoming eligible for sale by
the Holder pursuant to Rule 144, without limitation, or (C) one
year after the date of this Agreement.
“Registration Statement”
means either: (a) an appropriate pre-effective or post-effective
amendment to the Prior Registration Statement including therein the
Registrable Securities; or (b) a registration statement and any
additional registration statements contemplated by Section 2,
including (in each case) the Prospectus, amendments and supplements
to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference in such registration
statement.
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“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Rule 158” means Rule 158
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Rule 415” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Rule 416” means Rule 416
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Securities Act” means the
Securities Act of 1933, as amended.
“SEC Guidance” means: (i)
any publicly available written or oral guidance of the Commission
staff, or any comments, requirements or requests of the Commission
staff; and (ii) the Securities Act.
“Selling Stockholder
Questionnaire” means a questionnaire in the form
attached as Exhibit
B hereto, or such other form of questionnaire as may
reasonably be adopted by the Company from time to
time.
“Warrants” means the
warrants to purchase shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement.
2. Resale
Registration.
(a) On
or prior to the Filing Date, the Company shall prepare and file
with the Commission a “resale” Registration Statement
providing for the resale of all Registrable Securities by means of
an offering to be made on a continuous basis pursuant to Rule 415.
The Registration Statement shall be on Form S-1 or Form S-3
(or another appropriate form in
accordance herewith). The Company shall: (i) include the
Registrable Securities in the Registration Statement; and (ii) use
its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event
prior to the Effectiveness Date, and to keep such Registration
Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold,
(y) the date on which the Registrable Securities may be sold
without any restriction pursuant to Rule 144 as determined by the
counsel to the Company pursuant to a written opinion letter,
addressed to the Company’s transfer agent to such effect or
(z) one year after the date hereof (the “Effectiveness Period”).
The Company shall request that the effective time of the
Registration Statement be 4:00 p.m. Eastern Time on the
Effectiveness Date. If at any time and for any reason, an
additional Registration Statement is required to be filed because
at such time the actual number of Registrable Securities exceeds
the number of Registrable Securities remaining under the
Registration Statement and such Registrable Securities are not
saleable under Rule 144, without limitation, the Company shall have
ninety (90) Business Days to file such additional Registration
Statement, and the Company shall use its commercially reasonable
efforts to cause such additional Registration Statement to be
declared effective by the Commission as soon as possible, but in no
event later than one hundred twenty (120) days after such filing;
provided,
however that if the
prior Registration Statement was filed within six (6) months of
such ninety (90) or one hundred twenty (120) day period, then the
ninety (90) and one hundred twenty (120) days shall commence
immediately after the expiration of the date that is six (6) months
after the filing of the prior Registration Statement, unless then
current securities laws permit the earlier registration of
same.
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(b) Notwithstanding
anything to the contrary set forth in this Section 2, in the event
the Commission does not permit the Company to register all of
the Registrable Securities in
the Registration Statement because of the Commission’s
application of Rule 415, the number of Registrable
Securities to be registered on such Registration Statement will be
reduced in the order of the Registrable Securities represented by
the total number of Note Shares and Warrant Shares owned by the
Holders, applied on a pro rata basis, The Company shall use its commercially reasonable
efforts to file additional Registration Statements to register
the Registrable Securities that
were not registered in the initial Registration Statement and are
not saleable under Rule 144 without limitation as promptly as
possible but in no event later than on the Filing Date and in a
manner permitted by the Commission. For purposes of this Section
2(b), “Filing
Date” means with
respect to each subsequent Registration Statement filed pursuant
hereto, the later of: (i) ninety (90)
days following the sale of substantially all of the Registrable
Securities included in the initial Registration Statement or any
subsequent Registration Statement and; (ii) six (6) months
following the effective date of the initial Registration Statement
or any subsequent Registration Statement, as applicable, or such
earlier date as permitted by the Commission. For purposes of
this Section 2(b), “Effectiveness Date” means
with respect to each subsequent Registration Statement filed
pursuant hereto, the earlier of: (A)
the one hundred twentieth (120) day following the filing date of
such Registration Statement (or in the event such Registration
Statement receives a “full review” by the Commission,
the one hundred fiftieth (150th)
day following such filing date); or (B) the date which is within
three (3) Business Days after the date on which the Commission
informs the Company: (i) that the Commission will not review such
Registration Statement; or (ii) that the Company may request the acceleration of
the effectiveness of such Registration Statement;
provided that,
if the Effectiveness Date falls on a Saturday, Sunday or any other
day which shall be a legal holiday or a day on which the Commission
is authorized or required by law or other government actions to
close, the Effectiveness Date shall be the following Business
Day.
(c) Each
Holder agrees to furnish to the Company a completed Selling
Stockholder Questionnaire not more than ten (10) Business Days
following the date of this Agreement. Each Holder further agrees
that it shall not be entitled to be named as a selling security
holder in the Registration Statement or use the Prospectus for
offers and resales of Registrable Securities at any time, unless
such Holder has returned to the Company a completed and signed
Selling Stockholder Questionnaire. If a Holder of Registrable
Securities returns a Selling Stockholder Questionnaire after the
deadline specified in the previous sentence, the Company shall use
its commercially reasonable efforts to take such actions as are
required to name such Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective
amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities
identified in such late Selling Stockholder Questionnaire;
provided that the
Company shall not be required to file an additional Registration
Statement solely for such shares. Each Holder acknowledges and
agrees that the information in the Selling Stockholder
Questionnaire will be used by the Company in the preparation of the
Registration Statement and hereby consents to the inclusion of such
information in the Registration Statement.
3.
Registration
Procedures.
In connection with
the Company’s registration obligations hereunder, the Company
shall:
(a)
Prepare and file with the
Commission, on or prior to the Filing Date, a Registration
Statement on Form S-1 or Form S-3 (or another appropriate form in
accordance herewith) in accordance with the plan of distribution as
set forth on Exhibit A hereto and inaccordance with applicable law,
and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than
five (5) Business Days prior to the filing of the Registration
Statement or any relatedProspectus or any amendment or supplement
thereto, the Company shall: (i) furnish to the Holders copies of
all such documents proposed to be filed, which documents will be
subject to the review of such Holders; and (ii) cause its officers
and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary to conduct a
reasonable review of such documents. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Purchasers shall reasonably object
in writing within three (3) Business Days of their receipt
thereof.
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(b)
(i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective
as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional
Registration Statements as necessary in order to register for
resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; (iii) respond
as promptly as possible, but in no event later than sixty (60)
Business Days (unless such shorter period is requested by the
Commission), to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and
as promptly as possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to
the Registration Statement; (iv) file the final prospectus pursuant
to Rule 424 of the Securities Act no later than two (2) Business
Days following the date the Registration Statement is declared
effective by the Commission; and (v) comply in all material
respects with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by
the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(c)
Notify the Holders of Registrable Securities as promptly as
possible (i) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is filed;
with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable
Securities or the initiation or threatening of any Proceedings for
that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities
for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (iv) of the occurrence of any
event that makes any statement made in the Registration Statement
or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in
the light of the circumstances under which they were made) not
misleading.
(d)
Use its commercially reasonable efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of, as promptly as possible:
(i) any order suspending the effectiveness of the Registration
Statement; or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in any
jurisdiction.
(e)
If requested by the Holders of a majority in interest of the
Registrable Securities: (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration
Statement such information as the Company reasonably agrees should
be included therein; and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) If requested by any
Holder, furnish to such Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the
Commission.
(g)
Promptly deliver to
each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment
or supplement thereto as such Persons may reasonably request; and
subject to the provisions of Sections 3(m) and 3(n), the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement
thereto.
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(h)
Prior to any resale
of Registrable Securities, use its commercially reasonable efforts
to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder
requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall
not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the
Company to any material tax in any such jurisdiction where it is
not then so subject.
(i)
Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold pursuant to a Registration Statement, which certificates, to
the extent permitted by the Purchase Agreement and applicable
federal and state securities laws, shall be free of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names of the Holder in
connection with any sale of Registrable Securities.
(j)
Upon the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered,
neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of
the circumstances under which they were made) not
misleading.
(k)
Use its commercially reasonable efforts to cause all Registrable
Securities relating to the Registration Statement, to continue to
be quoted or listed on a securities exchange, quotation system or
market, if any, on which similar securities issued by the Company
are then listed or traded as and when required pursuant to the
Purchase Agreement.
(l)
Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its
security holders all documents filed or required to be filed with
the Commission, including, but not limited, to, earning statements
satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 not later than forty-five (45) days after the end of
any 12-month period (or ninety (90) days after the end of any
12-month period if such period is a fiscal year) commencing on the
first day of the first fiscal quarter of the Company after the
effective date of the Registration Statement, which statement shall
conform to the requirements of Rule 158.
(m) The
Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and the natural persons thereof
that have voting and dispositive control over the Registrable
Securities. During any periods that the Company is unable to meet
its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish
such information within five (5) Business Days of the
Company’s request, any liquidated damages that are accruing
at such time as to such Holder only shall be tolled and any Event
that may otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is
delivered to the Company.
If the
Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name
or otherwise is not required by the Securities Act or any similar
federal statute then in force) the deletion of the reference to
such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such
reference ceases to be required.
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Each
Holder covenants and agrees that it will not sell any Registrable
Securities under the Registration Statement until the Company has
electronically filed the Prospectus as then amended or supplemented
as contemplated in Section 3(g) and notice from the Company that
the Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section
3(c).
Each
Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence
of any event of the kind described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v), 3(c)(vi) or 3(n), such Holder will forthwith
discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 3(j), or until it is advised in
writing (the “Advice”) by the Company
that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration
Statement.
(n)
If (i) there is material non-public information regarding the
Company which the Company’s Board of Directors (the
“Board”) determines not to
be in the Company’s best interest to disclose and which the
Company is not otherwise required to disclose; (ii) there is a
significant business opportunity (including, but not limited to,
the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which
the Board determines not to be in the Company’s best interest
to disclose; or (iii) the Company is required to file a
post-effective amendment to the Registration Statement to
incorporate the Company’s quarterly and annual reports and
audited financial statements on Forms 10-Q and 10-K, then the
Company may (x) postpone or suspend filing of a registration
statement for a period not to exceed forty-five (45) consecutive
days or (y) postpone or suspend effectiveness of a registration
statement for a period not to exceed forty-five (45) consecutive
days; provided that
the Company may not postpone or suspend effectiveness of a
registration statement under this Section 3(n) for more than ninety
(90) days in the aggregate during any three hundred sixty (360) day
period; provided,
however, that no
such postponement or suspension shall be permitted for consecutive
twenty (20) day periods arising out of the same set of facts,
circumstances or transactions.
4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with
this Agreement by the Company, except as and to the extent
specified in this Section 4, shall be borne by the Company whether
or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation: (i) all
registration and filing fees (including, without limitation, fees
and expenses (A) with respect to filings required to be made with
any securities exchange or market on which Registrable Securities
are required hereunder to be listed, if any, (B) with respect to
filing fees required to be paid to the Financial Industry
Regulatory Authority, Inc. (including, without limitation, pursuant
to FINRA Rule 5110) and (C) in compliance with state securities or
Blue Sky laws (including, without limitation, fees and
disbursements of one counsel for the Holders up to a maximum amount
of $5,000 in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable
Securities may designate)); (ii) printing expenses (including,
without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing
of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement);
(iii) messenger, telephone and delivery expenses; (iv) Securities
Act liability insurance, if the Company so desires such insurance;
and (v) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions
contemplated by this Agreement, including, without limitation, the
Company’s independent public accountants (including the
expenses of any comfort letters or costs associated with the
delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for
all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in
connection with the listing of the Registrable Securities on any
securities exchange if required hereunder. The Company shall not be
responsible for any discounts, commissions, transfer taxes or other
similar fees incurred by the Holders in connection with the sale of
the Registrable Securities.
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5. Indemnification.
(a) Indemnification
by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each
Holder, the officers, directors, managers, partners, members,
shareholders, agents, brokers, investment advisors and employees of
each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs
of preparation and attorneys’ fees) and expenses
(collectively, “Losses”), as incurred,
arising out of or relating to any violation of securities laws or
untrue statement of a material fact contained in the Registration
Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission of a material fact
required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which
they were made) not misleading, except to the extent, but only to
the extent, that such untrue statements or omissions are based
solely upon information regarding such Holder or such other
Indemnified Party furnished in writing to the Company by such
Holder for use therein. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions
contemplated by this Agreement.
(b) Indemnification
by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents and
employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as
incurred, arising out of or based upon any untrue statement of a
material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising out of or based upon any omission of
a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in the light of the circumstances
under which they were made) not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder or other
Indemnifying Party to the Company specifically for inclusion in the
Registration Statement or such Prospectus. Notwithstanding anything
to the contrary contained herein, each Holder shall be liable under
this Section 5(b) only for the lesser of (a) the actual damages
incurred or (b) that amount as does not exceed the gross proceeds
to such Holder as a result of the sale of his/her/its Registrable
Securities pursuant to such Registration Statement.
(c)
Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an
“Indemnified
Party”), such Indemnified Party promptly shall
promptly notify the Person from whom indemnity is sought (the
“Indemnifying
Party”) in writing, and the Indemnifying Party shall
be entitled to assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with
defense thereof; provided that the failure of
any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced
the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; or (2)
the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or
(3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such parties shall have been advised by
counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall be responsible for employing only one
separate counsel and shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for
any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any
pending or threatened Proceeding in respect of which any
Indemnified Party is a party and indemnity has been sought
hereunder, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
-8-
(d) Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is due
but unavailable to an Indemnified Party because of a failure or
refusal of a governmental authority to enforce such indemnification
in accordance with its terms (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Party on the one hand and the
Indemnified Party on the other from the offering of the Notes and
Warrants. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault, as applicable, of the
Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as
well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action
in question, including any untrue statement of a material fact or
omission of a material fact, has been taken or made by, or relates
to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms. In no event
shall any selling Holder be required to contribute an amount under
this Section 5(d) in excess of the gross proceeds received by such
Holder upon sale of such Holder’s Registrable Securities
pursuant to the Registration Statement giving rise to such
contribution obligation.
The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent
misrepresentation.
The
indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties pursuant to applicable law.
6. Rule
144.
Unless
and until such time as the Holder can sell the Registrable
Securities pursuant to Rule 144, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. As long as any Holder owns Warrants or
Registrable Securities, if the Company is not required to file
reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it
will prepare and furnish to the Holders and make publicly available
in accordance with Rule 144(c) promulgated under the Securities
Act, annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information
required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any
Holder may reasonably request, all to the extent reasonably
required from time to time to enable such Person to sell the Note
Shares and the Warrant Shares without registration under the
Securities Act within the limitation of the exemptions provided by
Rule 144 promulgated under the Securities Act, including providing
any legal opinions relating to such sale pursuant to Rule 144. Upon
the request of any Holder, the Company shall deliver to such Holder
a written certification of a duly authorized officer as to whether
it has complied with such requirements.
-9-
7. Miscellaneous.
(a) Remedies.
In the event of a breach by the Company or by a Holder of any of
their obligations under this Agreement, such Holder or the Company,
as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights
under this Agreement.
Each of the Company and each Holder agrees that monetary damages
would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No
Inconsistent Agreements. The Company has not entered into,
and shall not enter into on or after the date of this Agreement,
any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.
(c) Failure
to File Registration Statement and Other Events. The Company
and the Holders agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date
and not declared effective by the Commission on or prior to the
Effectiveness Date and maintained in the manner contemplated herein
during the Effectiveness Period or if certain other events occur.
The Company and the Holders further agree that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, if (A) the Registration Statement is not filed on or
prior to the Filing Date; or (B) the Registration Statement is not
declared effective by the Commission on or prior to the
Effectiveness Date; or (C) the Company fails to file with the
Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act within three (3) Business Days
of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration
Statement will not be “reviewed,” or not subject to
further review; or (D) the Registration Statement is filed with and
declared effective by the Commission but thereafter ceases to be
effective as to all Registrable Securities at any time prior to the
expiration of the Effectiveness Period, without being succeeded
immediately by a subsequent Registration Statement filed with and
declared effective by the Commission in accordance with Section
2(a) hereof; or (E) the Company has breached Section 3(n) of this
Agreement; or (F) trading in the Common Stock shall be suspended
for any reason for more than three (3) consecutive Business Days or
twelve (12) Business Days in the aggregate for any twelve (12)
month period, (any such failure or breach being referred to as an
“Event,” and for purposes
of clauses (A) and (B) the date on which such Event occurs, or for
purposes of clauses (C) and (F) the date on which such three (3)
Business Day period is exceeded, or for purposes of clause (D)
after more than fifteen (15) Business Days, being referred to as
“Event
Date”), then the Company shall pay an amount in cash
as liquidated damages to each Holder equal to one percent (1%) of
the amount of the Holder’s initial investment in the Units
for each calendar month or portion thereof thereafter from the
Event Date until the applicable Event is cured; provided, however, that in no event shall
the amount of liquidated damages payable at any time and from time
to time to any Holder pursuant to this Section 7(e) exceed an
aggregate of ten percent (10%) of the amount of the Holder’s
initial investment in the Units; and provided, further, that in the event the
Commission does not permit all of the Registrable Securities to be
included in the Registration Statement because of its application
of Rule 415, liquidated damages payable pursuant to this Section
shall only be payable by the Company based on the portion of the
Holder’s initial investment in the Units that corresponds to
the number of such Holder’s Registrable Securities permitted
to be registered by the Commission in such Registration Statement
pursuant to Rule 415. For further clarification, the parties
understand that no liquidated damages shall be payable pursuant to
this Section with respect to any Registrable Securities that the
Company is not permitted to include on such Registration Statement
due to the Commission’s application of Rule 415 or otherwise.
In addition, no liquidated damages shall be payable with respect to
Registrable Securities that may be sold pursuant to Rule 144.
Notwithstanding anything to the contrary in this paragraph (e), if
(a) any of the Events described in clauses (A), (B), (C), (D) or
(F) shall have occurred, (b) on or prior to the applicable Event
Date, the Company shall have exercised its rights under Section
3(n) hereof and (c) the postponement or suspension permitted
pursuant to such Section 3(n) shall remain effective as of such
applicable Event Date, then the applicable Event Date shall be
deemed instead to occur on the second Business Day following the
termination of such postponement or suspension. Liquidated damages
payable by the Company pursuant to this Section 7(f) shall be
payable on the Event Date and the first (1st) Business Day of
each thirty (30) day period following the Event Date.
Notwithstanding anything to the contrary contained herein, in no
event shall any liquidated damages be payable with respect to the
Warrants or the Warrant Shares.
-10-
(d) Amendments
and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holders of a majority of
the then outstanding Registrable Securities.
(e) Notices.
Whenever notice is required to be given under this Agreement,
unless otherwise provided herein, such notice shall be given in
accordance with Section 7.4 of the Purchase Agreement.
(f) Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns and shall inure to the benefit of each Holder and its
successors and assigns. The Company may not assign this Agreement
or any of its rights or obligations hereunder without the prior
written consent of each Holder. Each Purchaser may assign its
rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.
(g) Assignment
of Registration Rights. The rights of each Holder hereunder,
including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this
Agreement, shall be automatically assignable by each Holder to any
Person who acquires all or a portion of the Warrants or the Registrable
Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a)
the name and address of such transferee or assignee, and (b) the
securities with respect to which such registration rights are being
transferred or assigned; (iii) following such transfer or
assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and
applicable state securities laws unless such securities are
registered in a Registration Statement under this Agreement (in
which case the Company shall be obligated to amend such
Registration Statement to reflect such transfer or assignment) or
are otherwise exempt from registration; (iv) at or before the time
the Company receives the written notice contemplated by clause (ii)
of this Section, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions of this Agreement;
and (v) such transfer shall have been made in accordance with the
applicable requirements of the Purchase Agreement. The rights to
assignment shall apply to the Holders (and to subsequent)
successors and assigns.
(h) Counterparts.
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same
Agreement and shall become effective when counterparts have been
signed by each party and delivered to the other parties hereto, it
being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as
if such facsimile signature were the original thereof.
(i) Governing
Law; Jurisdiction. This
Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, without giving effect to
any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This
Agreement shall not be interpreted or construed with any
presumption against the party causing this Agreement to be drafted.
The Company and the Holders agree that venue for any dispute
arising under this Agreement will lie exclusively in the state or
federal courts located in New York County, New York, and the
parties irrevocably waive any right to raise forum non conveniens or any other
argument that New York is not the proper venue. The Company and the
Holders irrevocably consent to personal jurisdiction in the state
and federal courts of the state of New York. The Company and the
Holders consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 7(l) shall
affect or limit any right to serve process in any other manner
permitted by law. The Company and the Holders hereby agree that the
prevailing party in any suit, action or proceeding arising out of
or relating to this Agreement or the Purchase Agreement, shall be
entitled to reimbursement for reasonable legal fees from the
non-prevailing party. The parties hereby waive all rights to a
trial by jury.
(j) Cumulative
Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
-11-
(k) Severability.
If any term, provision, covenant or restriction of this Agreement
is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and
employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and
declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(l) Headings.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
(m) Shares
Held by the Company and its Affiliates. Whenever the consent
or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by
the Company or its Affiliates (other than any Holder or transferees
or successors or assigns thereof if such Holder is deemed to be an
Affiliate solely by reason of its holdings of such Registrable
Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required
percentage.
(n) Independent
Nature of Purchasers. The Company acknowledges that the
obligations of each Purchaser under the Transaction Documents are
several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under the
Transaction Documents. The Company acknowledges that the decision
of each Purchaser to purchase Securities pursuant to the Purchase
Agreement has been made by such Purchaser independently of any
other Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its
Subsidiaries which may have been made or given by any other
Purchaser or by any agent or employee of any other Purchaser, and
no Purchaser or any of its agents or employees shall have any
liability to any Purchaser (or any other person) relating to or
arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained herein,
or in any Transaction Document, and no action taken by any
Purchaser pursuant hereto or thereto (including, but not limited
to, the (i) inclusion of a Purchaser in the Registration Statement
and (ii) review by, and consent to, such Registration Statement by
a Purchaser) shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. The
Company acknowledges that each Purchaser shall be entitled to
independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that it has
elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.
The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the
Purchasers are in any way acting in concert or as a group with
respect to the Transaction Documents or the transactions
contemplated hereby or thereby.
[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]
-12-
IN
WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized
persons as of the date first indicated above.
By:
Name:
Xxxxxxx Xxxxxxx
Title:
Chief Executive Officer
PURCHASERS:
______________________________
[Signature
Page to Registration Rights Agreement]
-13-
Schedule I
Purchasers
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-14-
Exhibit A
Plan of Distribution
The
selling security holders and any of their pledgees, donees,
assignees and successors-in-interest may, from time to time, sell
any or all of their shares of common stock being offered under this
prospectus on any stock exchange, market or trading facility on
which shares of our common stock are traded or in private
transactions. These sales may be at fixed or negotiated prices. The
selling security holders may use any one or more of the following
methods when disposing of shares:
●
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
●
block
trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
●
purchases
by a broker-dealer as principal and resales by the broker-dealer
for its account;
●
an
exchange distribution in accordance with the rules of the
applicable exchange;
●
privately
negotiated transactions;
●
to
cover short sales made after the date that the registration
statement of which this prospectus is a part is declared effective
by the Commission;
●
broker-dealers
may agree with the selling security holders to sell a specified
number of such shares at a stipulated price per share;
●
a
combination of any of these methods of sale; and
●
any
other method permitted pursuant to applicable law.
The
shares may also be sold under Rule 144 under the Securities Act of
1933, as amended (“Securities Act”), if available,
rather than under this prospectus. The selling security holders
have the sole and absolute discretion not to accept any purchase
offer or make any sale of shares if they deem the purchase price to
be unsatisfactory at any particular time.
The
selling security holders may pledge their shares to their brokers
under the margin provisions of customer agreements. If a selling
security holder defaults on a margin loan, the broker may, from
time to time, offer and sell the pledged shares.
Broker-dealers
engaged by the selling security holders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if
any broker-dealer acts as agent for the purchaser of shares, from
the purchaser) in amounts to be negotiated, which commissions as to
a particular broker or dealer may be in excess of customary
commissions to the extent permitted by applicable law.
If
sales of shares offered under this prospectus are made to
broker-dealers as principals, we would be required to file a
post-effective amendment to the registration statement of which
this prospectus is a part. In the post-effective amendment, we
would be required to disclose the names of any participating
broker-dealers and the compensation arrangements relating to such
sales.
-15-
The
selling security holders and any broker-dealers or agents that are
involved in selling the shares offered under this prospectus may be
deemed to be “underwriters” within the meaning of the
Securities Act in connection with these sales. Commissions received
by these broker-dealers or agents and any profit on the resale of
the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Any
broker-dealers or agents that are deemed to be underwriters may not
sell shares offered under this prospectus unless and until we set
forth the names of the underwriters and the material details of
their underwriting arrangements in a supplement to this prospectus
or, if required, in a replacement prospectus included in a
post-effective amendment to the registration statement of which
this prospectus is a part.
The
selling security holders and any other persons participating in the
sale or distribution of the shares offered under this prospectus
will be subject to applicable provisions of the Exchange Act, and
the rules and regulations under that act, including Regulation M.
These provisions may restrict activities of, and limit the timing
of purchases and sales of any of the shares by, the selling
security holders or any other person. Furthermore, under Regulation
M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and other activities
with respect to those securities for a specified period of time
prior to the commencement of such distributions, subject to
specified exceptions or exemptions. All of these limitations may
affect the marketability of the shares.
If
any of the shares of common stock offered for sale pursuant to this
prospectus are transferred other than pursuant to a sale under this
prospectus, then subsequent holders could not use this prospectus
until a post-effective amendment or prospectus supplement is filed,
naming such holders. We offer no assurance as to whether any of the
selling security holders will sell all or any portion of the shares
offered under this prospectus.
We have
agreed to pay all fees and expenses we incur incident to the
registration of the shares being offered under this prospectus.
However, each selling security holder and purchaser is responsible
for paying any discounts, commissions and similar selling expenses
they incur.
We and
the selling security holders have agreed to indemnify one another
against certain losses, damages and liabilities arising in
connection with this prospectus, including liabilities under the
Securities Act.
-16-
Exhibit B
Selling Stockholder Notice and Questionnaire
The
undersigned understands that Youngevity International, Inc. (the
“Company”) intends to file
with the Securities and Exchange Commission a registration
statement on Form S-1 (the “Resale Registration
Statement”) for the registration and the resale under
Rule 415 of the Securities Act of 1933, as amended (the
“Securities
Act”), of the Registrable Securities in accordance
with the terms of the Registration Rights Agreement entered into by
the Company and the undersigned (the “Agreement”). All
capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.
In
order to sell or otherwise dispose of any Registrable Securities
pursuant to the Resale Registration Statement, a holder of
Registrable Securities generally will be required to be named as a
selling stockholder in the related prospectus or a supplement
thereto (as so supplemented, the “Prospectus”), deliver the
Prospectus to purchasers of Registrable Securities (including
pursuant to Rule 172 under the Securities Act) and be bound by the
provisions of the Agreement (including certain indemnification
provisions, as described below). Holders must complete and deliver
this Notice and Questionnaire in order to be named as selling
stockholders in the Prospectus. Holders of Registrable Securities who do not
complete, execute and return this Notice and Questionnaire within
ten (10) Business Days following the date of the Agreement (1) will
not be named as selling stockholders in the Resale Registration
Statement or the Prospectus and (2) may not use the Prospectus for
resales of Registrable Securities.
Certain
legal consequences arise from being named as a selling stockholder
in the Resale Registration Statement and the Prospectus. Holders of
Registrable Securities are advised to consult their own securities
law counsel regarding the consequences of being named or not named
as a selling stockholder in the Resale Registration Statement and
the Prospectus.
NOTICE
The
undersigned holder (the “Selling Stockholder”) of
Registrable Securities hereby gives notice to the Company of its
intention to sell or otherwise dispose of Registrable Securities
owned by it and listed below in Item (3), unless otherwise
specified in Item (3), pursuant to the Resale Registration
Statement. The undersigned, by signing and returning this Notice
and Questionnaire, understands and agrees that it will be bound by
the terms and conditions of this Notice and Questionnaire and the
Agreement.
The
undersigned hereby provides the following information to the
Company and represents and warrants that such information is
accurate and complete:
-17-
QUESTIONNAIRE
1.
Name.
(a)
Full Legal Name of
Selling Stockholder:
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(b)
Full Legal Name of
Registered Holder (if not the same as (a) above) through which
Registrable Securities Listed in Item 3 below are
held:
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(c)
Full Legal Name of
Natural Control Person (which means a natural person who directly
or indirectly alone or with others has power to vote or dispose of
the securities covered by the questionnaire):
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2.
Address
for Notices to Selling Stockholder:
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Telephone:
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Fax:
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Contact
Person:
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E-mail
address of Contact
Person:________________________________________________
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3.
Beneficial
Ownership of Registrable Securities:
(a)
Type
and Number of Registrable Securities beneficially
owned:
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___________________________________________________________________________
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___________________________________________________________________________
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___________________________________________________________________________
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(b)
Number
of shares of Common Stock to be registered pursuant to this Notice
for resale:
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___________________________________________________________________________
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___________________________________________________________________________
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___________________________________________________________________________
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4.
Broker-Dealer
Status:
(a)
Are
you a broker-dealer?
Yes
☐ No
☐
(b) If “yes” to Section 4(a),
did you receive your Registrable Securities as compensation for
investment banking services to the Company?
Yes
☐ No
☐
Note:
If no,
the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration
Statement.
(c)
Are
you an affiliate of a broker-dealer?
Yes
☐ No
☐
Note:
If
yes, provide a narrative explanation below:
(d)
If you
are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and
at the time of the purchase of the Registrable Securities to be
resold, you had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable
Securities?
Yes
☐ No
☐
Note:
If no,
the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration
Statement.
5.
Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Stockholder.
Except as set forth below in this Item 5, the undersigned is not
the beneficial or registered owner of any securities of the Company
other than the Registrable Securities listed above in Item
3.
Type
and amount of other securities beneficially owned:
______________________________________________________________________________
______________________________________________________________________________
6.
Relationships
with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners
of 5% of more of the equity securities of the undersigned) has held
any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the
past three years.
State
any exceptions here:
______________________________________________________________________________
______________________________________________________________________________
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7.
Plan
of Distribution:
The undersigned has reviewed the form of Plan of Distribution
attached as Exhibit A to the Agreement, and hereby confirms that,
except as set forth below, the information contained therein
regarding the undersigned and its plan of distribution is correct
and complete.
State
any exceptions here:
______________________________________________________________________________
______________________________________________________________________________
***********
The
undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof and prior to the effective date
of any applicable Resale Registration Statement. All notices
hereunder shall be made in writing, by hand delivery, confirmed or
facsimile transmission, first-class mail or air courier
guaranteeing overnight delivery at the address set forth below. In
the absence of any such notification, the Company shall be entitled
to continue to rely on the accuracy of the information in this
Notice and Questionnaire.
By
signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items (1) through
(7) above and the inclusion of such information in the Resale
Registration Statement and the Prospectus. The undersigned
understands that such information will be relied upon by the
Company in connection with the preparation or amendment of any such
Registration Statement and the Prospectus.
By
signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations
thereunder, particularly Regulation M in connection with any
offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it
understands that the answers to this Questionnaire are furnished
for use in connection with Registration Statements filed pursuant
to the Agreement and any amendments or supplements thereto filed
with the Commission pursuant to the Securities Act.
The
undersigned hereby acknowledges and is advised of the following
Interpretation A.65 of the July 1997 SEC Manual of Publicly
Available Telephone Interpretations regarding short
selling:
“An Issuer filed a Form S-3 registration statement for a
secondary offering of common stock which is not yet effective. One
of the selling stockholders wanted to do a short sale of common
stock “against the box” and cover the short sale with
registered shares after the effective date. The issuer was advised
that the short sale could not be made before the registration
statement become effective, because the shares underlying the short
sale are deemed to be sold at the time such sale is made. There
would, therefore, be a violation of Section 5 if the shares were
effectively sold prior to the effective date.”
By
returning this Questionnaire, the undersigned will be deemed to be
aware of the foregoing interpretation.
I
confirm that, to the best of my knowledge and belief, the foregoing
statements (including without limitation the answers to this
Questionnaire) are correct.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has
caused this Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
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Dated:_________________________
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Beneficial
Owner: _______________
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By:__________________________
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Name:
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Title:
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