REGISTRATION RIGHTS AGREEMENT
EXHIBIT 99.2
EXECUTION VERSION
This
REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made as of May 9, 2019 by and among ChromaDex Corporation, a
corporation organized and existing under the laws of the State of
Delaware (the “Company”),
and the several purchasers signatory hereto (each, a “Purchaser”
and collectively, the “Purchasers”).
RECITALS
WHEREAS, the
Company and the Purchasers are parties to a Note Purchase
Agreement, dated as of May 9, 2019 (the “Purchase
Agreement”),
pursuant to which the Purchasers are purchasing Notes (as defined
in the Purchase Agreement) that are convertible into shares of
Common Stock; and
WHEREAS, in
connection with the consummation of the transactions contemplated
by the Purchase Agreement, and pursuant to the terms of the
Purchase Agreement, the parties desire to enter into this Agreement
in order to grant certain rights to the Purchasers as set forth
below.
NOW,
THEREFORE, in consideration of the covenants and promises set forth
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
AGREEMENT
1. Certain
Definitions. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the
meanings specified in this Section 1.
“Affiliate”
has the meaning set forth in Rule 12b-2 of the rules and
regulations promulgated under the Exchange Act; provided,
however, that
for purposes of this Agreement, the Purchasers and their
Affiliates, on the one hand, and the Company and its Affiliates, on
the other, shall not be deemed to be “Affiliates”
of one another.
“Allowed
Delay” has the
meaning set forth in Section 2.1(b)(ii).
“Board”
means the board of directors of the Company.
“Business
Days” has the
meaning ascribed to such term in the Purchase
Agreement.
“Closing
Date” means the
date that the Notes convert into Shares of Common Stock on the
conditions and terms set forth in the Notes.
“Common
Stock” means
shares of the common stock, par value $0.001 per share, of the
Company.
“Effective
Date” means the
date that a Registration Statement filed pursuant to Section 2.1(a)
is first declared effective by the SEC.
“Effectiveness
Deadline” means,
with respect to the Shelf Registration Statement or New
Registration Statement, the ninetieth (90th) calendar day following
the Closing Date (or, in the event the SEC reviews and has written
comments to the Shelf Registration Statement or the New
Registration Statement, the one hundred twentieth (120th) calendar
day following the Closing Date); provided, however, that if the
Company is notified by the SEC that the Shelf Registration
Statement or the New Registration Statement will not be reviewed or
is no longer subject to further review and comments, the
Effectiveness Deadline as to such Shelf Registration Statement
shall be the fifth (5th) Business Day following the date on which
the Company is so notified if such date precedes the dates
otherwise required above; provided, further, that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day
that the SEC is closed for business, the Effectiveness Deadline
shall be extended to the next Business Day on which the SEC is open
for business; provided, further, that if the SEC is closed for
operations due to a government shutdown, the Effectiveness Deadline
shall be extended by the same amount of days that the SEC remains
closed for operations.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Filing
Deadline” has the
meaning set forth in Section 2.1(a).
“FINRA”
means the Financial Industry Regulatory Authority.
“Form
S-3” means such
form under the Securities Act as in effect on the date hereof or
any successor or similar registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the Commission.
“Free Writing
Prospectus” means
an issuer free writing prospectus, as defined in Rule 433 under the
Securities Act, relating to an offer of Registrable
Securities.
“Holder”
means any Purchaser owning or having the right to acquire
Registrable Securities.
“Liquidated
Damages” has the
meaning set forth in Section 2.1(c).
“New Registration
Statement” has the
meaning set forth in Section 2.1(a).
“Participating
Holder” means with
respect to any registration, any Holder of Registrable Securities
covered by the applicable Registration Statement.
“Person”
has the meaning ascribed to such term in the Purchase
Agreement.
“Prospectus”
means the prospectus included in any Registration Statement, all
amendments and supplements to such prospectus, including pre- and
post-effective amendments to such Registration Statement, and all
other material incorporated by reference in such
prospectus.
“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 effectiveness of such registration
statement or document.
“Registrable
Securities” means
the Shares issued on the Closing Date and any Common Stock issued
as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement
of, such Shares. Notwithstanding the foregoing, Shares shall cease
to be Registrable Securities for all purposes hereunder upon the
earliest to occur of the following: (A) the sale by any Person of
such Shares to the public either pursuant to a registration
statement under the Securities Act or under Rule 144 (in which
case, only such Shares sold shall cease to be Registrable
Securities) or (B) such Shares becoming eligible for sale by the
Holder pursuant to Rule 144 without restriction.
“Registration
Statement” means
any registration statement of the Company that covers Registrable
Securities pursuant to the provisions of this Agreement filed with,
or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration
statement, including pre- and post-effective amendments, and all
exhibits and all material incorporated by reference in such
registration statement.
“Registration
Expenses” has the
meaning set forth in Section 2.3.
“Remainder Registration
Statement” has the
meaning set forth in Section 2.1.
“Rule
144” means Rule
144 as promulgated by the SEC under the Securities Act, as such
rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
“Rule
145” means Rule
145 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.
“SEC” or “Commission”
means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
“SEC
Guidance” means
(i) any publicly-available written or oral guidance, comments,
requirements or requests of the Commission staff and (ii) the
Securities Act.
“Securities
Act” means the
Securities Act of 1933, as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as
the same shall be in effect from time to time.
“Shares”
has the meaning ascribed to such terms in the Purchase
Agreement.
“Shelf Registration
Statement” has the
meaning set forth in Section 2.1(a).
“Subsidiaries”
means each corporation, limited liability company, partnership,
association, joint venture or other business entity of which any
party or any of its Affiliates owns, directly or indirectly, more
than 50% of the stock or other equity interest entitled to vote on
the election of the members of the board of directors or similar
governing body.
“Transaction
Documents” means
this Agreement and the Purchase Agreement, all exhibits and
schedules thereto and hereto and any other documents or agreement
executed in connection with the transactions contemplated hereunder
or thereunder.
2. Registration
Rights.
2.1 Shelf
Registration.
(a)
Registration
Statements. On or
prior to 30 days following the Closing Date (the “Filing
Deadline”), the
Company shall prepare and file with the SEC a Registration
Statement on Form S-3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then
available to effect a registration for resale of the Registrable
Securities) for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (the “Shelf Registration
Statement”). Such
Shelf Registration Statement shall, subject to the limitations of
Form S-3, include the aggregate amount of Registrable Securities to
be registered therein and shall contain (except if otherwise
required pursuant to written comments received from the Commission
upon a review of such Shelf Registration Statement) the
“Plan of
Distribution” in
substantially the form attached hereto as Annex A. To the
extent the staff of the SEC does not permit all of the Registrable
Securities to be registered on the Shelf Registration Statement
filed pursuant to this Section 2.1(a) or for any other reason any
Registrable Securities are not then included in a Registration
Statement filed under this Agreement, the Company shall (i) inform
each of the Holders thereof and use its commercially reasonable
efforts to file amendments to the Shelf Registration Statement as
required by the Commission and/or (ii) withdraw the Shelf
Registration Statement and file a new registration statement (a
“New Registration
Statement”), in
either case covering the maximum number of Registrable Securities
permitted to be registered by the SEC, on Form S-3 or such other
form available to register for resale the Registrable Securities as
a secondary offering; provided, however, that prior to filing such
amendment or New Registration Statement, the Company shall be
obligated to use its commercially reasonable efforts to advocate
with the SEC for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without
limitation, the Manual of Publicly Available Telephone
Interpretations D.29. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages in
Section 2.1(c), if any SEC Guidance sets forth a limitation of the
number of Registrable Securities permitted to be registered on a
particular Registration Statement as a secondary offering (and
notwithstanding that the Company used diligent efforts to advocate
with the SEC for the registration of all or a greater number of
Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will
first be reduced by Registrable Securities not acquired pursuant to
the Purchase Agreement (whether pursuant to registration rights or
otherwise), and second by Registrable Securities represented by
Shares (applied, in the case that some Shares may be registered, to
the Holders on a pro rata basis based on the total number of
unregistered Shares held by such Holders, subject to a
determination by the Commission that certain Holders must be
reduced first based on the number of Shares held by such Holders).
In the event the Company amends the Shelf Registration Statement or
files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will use its commercially
reasonable efforts to file with the SEC, as promptly as allowed by
SEC or SEC Guidance provided to the Company or to registrants of
securities in general, one or more Registration Statements on Form
S-3 or such other form available to register for resale those
Registrable Securities that were not registered for resale on the
Shelf Registration Statement, as amended, or the New Registration
Statement (the “Remainder Registration
Statement”).
(b)
Effectiveness.
(i) The
Company shall use reasonable best efforts to have the Shelf
Registration Statement or New Registration Statement declared
effective as soon as practicable but in no event later than the
Effectiveness Deadline (including filing with the Commission a
request for acceleration of effectiveness in accordance with Rule
461 promulgated under the Securities Act), and shall use its
commercially reasonable efforts to keep the Shelf Registration
Statement or New Registration Statement continuously effective
under the Securities Act until the earlier of (i) such time as all
of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date
that all Registrable Securities covered by such Registration
Statement may be sold by non-affiliates without volume or
manner-of-sale restrictions pursuant to Rule 144, without the
requirement for the Company to be in compliance with the current
public information requirement under Rule 144 as determined by
counsel to the Company pursuant to a written opinion letter to such
effect, addressed and reasonably acceptable to the
Company’s transfer agent
(the “Effectiveness
Period”). The
Company shall notify the Purchasers by facsimile or e-mail as
promptly as practicable, and in any event, within twenty-four (24)
hours, after any Registration Statement is declared effective and
shall simultaneously provide the Purchasers with copies of any
related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby.
(ii)
For not more than twenty (20) consecutive days or for a total of
not more than forty-five (45) days in any twelve (12) month period,
the Company may suspend the use of any Prospectus included in any
Registration Statement contemplated by this Section 2 in the event
that the Company determines in good faith that such suspension is
necessary to (A) delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best
interests of the Company or (B) amend or supplement the
Registration Statement or the related Prospectus so that such
Registration Statement or Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in light of the
circumstances under which they were made, not misleading (an
“Allowed
Delay”);
provided, that
the Company shall promptly (a) notify each Purchaser in writing of
the commencement of and the reasons for an Allowed Delay, but shall
not (without the prior written consent of a Purchaser) disclose to
such Purchaser any material non-public information giving rise to
an Allowed Delay, (b) advise the Purchasers in writing to cease all
sales under the Registration Statement until the end of the Allowed
Delay and (c) use commercially reasonable efforts to terminate an
Allowed Delay as promptly as practicable.
(c) If:
(i) the Shelf Registration Statement is not filed with the SEC on
or prior to the Filing Deadline, (ii) the Shelf Registration
Statement or the New Registration Statement, as applicable, is not
declared effective by the SEC (or otherwise does not become
effective) for any reason on or prior to the Effectiveness
Deadline, (iii) after its Effective Date and other than for an
Allowed Delay, (A) such Registration Statement ceases for any
reason (including without limitation by reason of a stop order, or
the Company’s failure to
update the Registration Statement), to remain continuously
effective as to all Registrable Securities included in such
Registration Statement or (B) the Company suspends the use of the
Prospectus contained in the Registration Statement, or (iv) the
Company fails to satisfy the current public information requirement
pursuant to Rule 144(c)(1) as a result of which the Holders are
unable to sell Registrable Securities without restriction under
Rule 144 (or any successor thereto) and fails to cure any such
failure to satisfy the Rule 144(c)(1) requirement within 10
business days following the date upon which the Holder notifies the
Company in writing that such Holder is unable to sell Registrable
Securities as a result thereof, (any such failure or breach in
clauses (i) through (iv) above being referred to as an “Event,” and the date on which such Event
occurs, being referred to as an “Event Date”), then in addition to any other
rights the Holders may have hereunder or under applicable law, on
each such Event Date and on each monthly anniversary of each such
Event Date (if the applicable Event shall not have been cured by
such date) until the earlier of (1) the applicable Event is cured
or (2) the Registrable Securities are eligible for resale pursuant
to Rule 144 without manner of sale or volume restrictions, the
Company shall pay to each Holder an amount in cash, as partial
liquidated damages and not as a penalty (“Liquidated
Damages”), equal
to one percent (1.0%) of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any unregistered
Registrable Securities then held by such Holder. The parties agree
that (1) notwithstanding anything to the contrary herein or in the
Purchase Agreement, no Liquidated Damages shall be payable with
respect to any period after the expiration of the Effectiveness
Period (it being understood that this sentence shall not relieve
the Company of any Liquidated Damages accruing prior to the
Effectiveness Deadline) and in no event shall, the aggregate amount
of Liquidated Damages payable to a Holder exceed, in the aggregate,
five percent (5%) of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement and (2) in no event shall
the Company be liable in any thirty (30) day period for Liquidated
Damages under this Agreement in excess of one percent (1.0%) of the
aggregate purchase price paid by the Holders pursuant to the
Purchase Agreement. If the Company fails to pay any Liquidated
Damages pursuant to this Section 2.1(c) in full within five (5)
Business Days after the date payable, the Company will pay interest
thereon at a rate of one percent (1.0%) per month (or such lesser
maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such Liquidated Damages
are due until such amounts, plus all such interest thereon, are
paid in full. The Liquidated Damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month
prior to the cure of an Event, except in the case of the first
Event Date. The Company shall not be liable for Liquidated Damages
under this Agreement as to any Registrable Securities which are not
permitted by the Commission to be included in a Registration
Statement due solely to SEC Guidance from the time that it is
determined that such Registrable Securities are not permitted to be
registered until such time as the provisions of this Agreement as
to the Remainder Registration Statements required to be filed
hereunder are triggered, in which case the provisions of this
Section 2.1(c) shall once again apply, if applicable. In such case,
the Liquidated Damages shall be calculated to only apply to the
percentage of Registrable Securities which are permitted in
accordance with SEC Guidance to be included in such Registration
Statement. The Effectiveness Deadline for a Registration Statement
shall be extended without default or Liquidated Damages hereunder
in the event that the Company’s failure to obtain the
effectiveness of such Registration Statement on a timely basis
results from the failure of a Purchaser to timely provide the
Company with information requested by the Company and necessary to
complete the Registration Statement in accordance with the
requirements of the Securities Act (in which the Effectiveness
Deadline would be extended with respect to Registrable Securities
held by such Purchaser).
(d) In
the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company
shall (i)
register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Holder and (ii)
undertake to register the Registrable Securities on Form S-3
promptly after such form is available, provided that the
Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the Commission.
2.2 Piggyback
Registrations; Prohibition on Filing other Registration
Statements
(a) If
at any time after the Shelf Registration Statement is declared
effective, there is not then an effective registration statement
covering all of the Registrable Securities, and the Company
determines to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the
account of others of any of its equity securities, then the Company
shall send to each Holder written notice of such determination and,
if within 15 days after the date of such notice, any such Holder
shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable
Securities such Holder requests to be registered.
(b) The
Company shall have the right, in its sole discretion, to terminate
or withdraw any registration initiated by it under this Section 2.2
prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such
registration.
(c)
Prior to the Effective Date of the Shelf Registration Statement,
neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of
the Company in a Registration Statement other than the Registrable
Securities and the Company shall not enter into any agreement
providing any such right to any of its security holders, provided
however, that the Company may enter into an agreement providing
such right and may include securities of the Company in a
Registration Statement for any shares of Common Stock sold in one
or more financings contemplated in Section 3(a) of the Notes (an
“Exempt Registration”). Other than an Exempt
Registration, the Company shall not file with the Commission a
registration statement relating to an offering for its own account
under the Securities Act of any of its equity securities other than
a registration statement on Form S-8 or, in connection with an
acquisition, on Form S-4 until the earlier of (i) the date that is
thirty (30) days after the date the Shelf Registration Statement in
the first sentence of this clause (c) is declared effective or (ii)
the date that all Registrable Securities are eligible for resale by
non-affiliates without volume or manner of sale restrictions under
Rule 144 and without the requirement for the company to be in
compliance with the current public information requirements under
Rule 144. For the avoidance of doubt, the Company shall not be
prohibited (i) from preparing and filing with the Commission a
registration statement relating to an offering of Common Stock by
existing stockholders of the Company under the Securities Act
pursuant to the terms of registration rights held by such
stockholder, (ii) from filing amendments to registration statements
filed prior to the date of this Agreement or (iii) from filing
prospectus supplements relating to any offering of securities of
the Company pursuant to any registration statement filed by the
Company prior to the date of this Agreement, provided that any such
filing is in accordance with the terms and restrictions of the
Purchase Agreement.
2.3 Expenses. All
expenses incident to the Company’s performance of or compliance with
this Agreement shall be paid by the Company, other than
underwriting discounts or commissions deducted from the proceeds in
respect of any Registrable Securities, including (i) all
registration and filing fees, and any other fees and expenses
associated with filings required to be made with the SEC, FINRA or
any other regulatory authority and, if applicable, the fees and
expenses of any “qualified independent
underwriter” as such term
is defined in NASD Rule 2720 (or any successor provision) and of
its counsel, (ii) all fees and expenses in connection with
compliance with any securities or “Blue Sky” laws (including fees and
disbursements of counsel for the underwriters in connection with
“Blue Sky” qualifications of the Registrable
Securities), (iii) all printing, duplicating, word processing,
messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities in
a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses and Free Writing Prospectuses), (iv) all
fees and disbursements of counsel for the Company and of all
independent certified public accountants of the Company (including
the expenses of any special audit and cold comfort letters required
by or incident to such performance), (v) Securities Act liability
insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary
underwriting practice, (vi) all fees and expenses incurred in
connection with the listing of Registrable Securities on any
securities exchange or quotation of the Registrable Securities on
any inter-dealer quotation system, (vii) any reasonable fees and
disbursements of underwriters customarily paid by issuers or
sellers of securities, (viii) all fees and expenses of any special
experts or other Persons retained by the Company in connection with
any registration, (ix) all of the Company’s internal expenses (including all
salaries and expenses of its officers and employees performing
legal or accounting duties), (x) all expenses related to the
“road-show” for any underwritten offering,
including all travel, meals and lodging, (xi) all reasonable fees
and disbursements of one legal counsel for the Participating
Holders, as selected by the Purchasers, in an amount not to exceed
$50,000 in the aggregate during the term of this Agreement, and
(xii) any other fees and disbursements customarily paid by the
issuers of securities. All such expenses are referred to herein as
“Registration
Expenses.” The
Company shall not be required to pay any underwriting discounts and
commissions and transfer taxes, if any, attributable to the sale of
Registrable Securities.
2.4 Company
Obligations. The Company will use reasonable best efforts to
effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company
will:
(a)
prepare the required Registration Statement including all exhibits
and financial statements required under the Securities Act to be
filed therewith, and before filing a Registration Statement,
Prospectus or any Free Writing Prospectus, or any amendments or
supplements thereto, (x) furnish to the Participating Holders, if
any, copies of all documents prepared to be filed, which documents
shall be subject to the review of such Participating Holders and
their respective counsel and (y) except in the case of a
registration under Section 2.2, not file any Registration Statement
or Prospectus or amendments or supplements thereto to which any
Participating Holders shall reasonably object;
(b)
file with the SEC a Registration Statement relating to the
Registrable Securities including all exhibits and financial
statements required by the SEC to be filed therewith, and use
commercially reasonable efforts to cause such Registration
Statement to become effective under the Securities
Act;
(c)
prepare and file with the SEC such pre- and post-effective
amendments to such Registration Statement, supplements to the
Prospectus and such amendments or supplements to any Free Writing
Prospectus as may be (y) reasonably requested by any Participating
Holder or (z) necessary to keep such registration effective for the
period of time required by this Agreement, and comply with
provisions of the applicable securities laws with respect to the
sale or other disposition of all securities covered by such
Registration Statement during such period in accordance with the
intended method or methods of disposition by the sellers thereof
set forth in such Registration Statement;
(d)
promptly notify the Participating Holders, and (if requested)
confirm such advice in writing and provide copies of the relevant
documents, as soon as reasonably practicable after notice thereof
is received by the Company (A) when the applicable Registration
Statement or any amendment thereto has been filed or becomes
effective, and when the applicable Prospectus or Free Writing
Prospectus or any amendment or supplement thereto has been filed,
(B) of any written comments by the SEC or any request by the SEC
for amendments or supplements to such Registration Statement,
Prospectus or Free Writing Prospectus or for additional
information, (C) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or any
order by the SEC preventing or suspending the use of any
preliminary or final Prospectus or any Free Writing Prospectus or
the initiation or threatening of any proceedings for such purposes,
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable
Securities for offering or sale in any jurisdiction and (E) of the
receipt by the Company of any notification with respect to the
initiation or threatening of any proceeding for the suspension of
the qualification of the Registrable Securities for offering or
sale in any jurisdiction;
(e)
promptly notify the Participating Holders when the Company becomes
aware of the happening of any event as a result of which the
Registration Statement, the Prospectus included in such
Registration Statement (as then in effect) or any Free Writing
Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein (in the case of such Prospectus, any preliminary Prospectus
or any Free Writing Prospectus, in light of the circumstances under
which they were made) not misleading, when any Free Writing
Prospectus includes information that may conflict with the
information contained in the Registration Statement, or, if for any
other reason it shall be necessary during such time period to amend
or supplement such Registration Statement, Prospectus or Free
Writing Prospectus in order to comply with the Securities Act and,
in either case as promptly as reasonably practicable thereafter,
prepare and file with the SEC and furnish without charge to the
Participating Holders an amendment or supplement to such
Registration Statement, Prospectus or Free Writing Prospectus which
shall correct such misstatement or omission or effect such
compliance;
(f)
promptly incorporate in a Prospectus supplement, Free Writing
Prospectus or post-effective amendment to the applicable
Registration Statement such information as the Participating
Holders agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, and make
all required filings of such Prospectus supplement, Free Writing
Prospectus or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated
in such Prospectus supplement, Free Writing Prospectus or
post-effective amendment;
(g)
furnish to each Participating Holder, without charge, as many
conformed copies as such Participating Holder may reasonably
request of the applicable Registration Statement and any amendment
or post-effective amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by
reference);
(h)
deliver to each Participating Holder, without charge, as many
copies of the applicable Prospectus (including each preliminary
Prospectus), any Free Writing Prospectus and any amendment or
supplement thereto as such Participating Holder may reasonably
request (it being understood that the Company consents to the use
of such Prospectus, any Free Writing Prospectus and any amendment
or supplement thereto by such Participating in connection with the
offering and sale of the Registrable Securities thereby) and such
other documents as such Participating Holder may reasonably request
in order to facilitate the disposition of the Registrable
Securities by such Participating Holder;
(i) on
or prior to the date on which the Registration Statement is
declared effective, use its reasonable best efforts to register or
qualify, and cooperate with the Participating Holders and their
respective counsel, in connection with the registration or
qualification of such Registrable Securities for offer and sale
under the securities or “Blue Sky” laws of each state and other
jurisdiction of the United States as any Participating Holder or
their respective counsel reasonably request in writing and do any
and all other acts or things reasonably necessary or advisable to
keep such registration or qualification in effect for such period
as required by this Agreement, provided 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 which would subject it to taxation or general
service of process in any such jurisdiction where it is not then so
subject;
(j)
cooperate with the Participating Holders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends, and
enable such Registrable Securities to be in such denominations and
registered in such names as may be requested at least two (2)
Business Days prior to any sale of Registrable
Securities;
(k) use
its reasonable best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof to consummate
the disposition of such Registrable Securities;
(l)
make such representations and warranties to the Participating
Holders in form, substance and scope as are customarily made by
issuers in secondary underwritten public offerings;
(m)
enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the
Purchasers reasonably request in order to expedite or facilitate
the registration and disposition of such Registrable
Securities;
(n)
obtain for delivery to the Participating Holders an opinion or
opinions from counsel for the Company dated the effective date of
the Registration Statement or, in the event of an underwritten
offering, the date of the closing under the underwriting agreement,
in customary form, scope and substance, which opinions shall be
reasonably satisfactory to such Participating Holders or
underwriters, as the case may be, and their respective
counsel;
(o)
cooperate with each Participating Holder participating in the
disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with
FINRA or any other securities regulatory authority;
(p) use
its reasonable best efforts to comply with all applicable
securities laws and make available to its security holders, as soon
as reasonably practicable, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;
(q)
provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the
effective date of such Registration Statement;
(r) use
commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each
securities exchange on which any of the Common Stock is then listed
or quoted and on each inter-dealer quotation system on which any of
the Common Stock is then quoted;
(s) the
Company shall make available, during normal business hours, for
inspection and review by the Purchasers, advisors to and
representatives of the Purchasers (who may or may not be affiliated
with the Purchasers and who are reasonably acceptable to the
Company), all financial and other records, all SEC Reports (as
defined in the Purchase Agreement) and other filings with the SEC,
and all other corporate documents and properties of the Company as
may be reasonably necessary for the purpose of such review, and
cause the Company’s
officers, directors and employees, within a reasonable time period,
to supply all such information reasonably requested by the
Purchasers or any such representative, advisor or underwriter in
connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from
time to time after the filing and effectiveness of the Registration
Statement for the sole purpose of enabling the Purchasers and such
representatives, advisors and underwriters and their respective
accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such
Registration Statement; and
(t)
with a view to making available to the Purchasers the benefits of
Rule 144 (or its successor rule) and any other rule or regulation
of the SEC that may at any time permit the Purchasers to sell
shares of Common Stock to the public without registration, the
Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in
Rule 144, until the earlier of (A) the date as all of the
Registrable Securities may be sold without restriction by the
holders thereof pursuant to Rule 144 or any other rule of similar
effect or (B) such date as all of the Registrable Securities shall
have been resold; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the
Exchange Act; and (iii) furnish to each Purchaser upon request, as
long as such Purchaser owns any Registrable Securities, (A) a
written statement by the Company that it has complied with the
reporting requirements of the Exchange Act, (B) a copy of the
Company’s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and
(C) such other information as may be reasonably requested in order
to avail such Purchaser of any rule or regulation of the SEC that
permits the selling of any such Registrable Securities without
registration.
All such information made available or provided
pursuant to this Section 2.4 shall be treated as confidential
information and shall not be disclosed by the Purchasers to any
other Person other than such Purchaser’s respective officers,
directors, employees, accountants, consultants, legal counsel,
investment bankers, advisors and authorized agents (collectively,
the “Purchaser
Representatives”);
provided, that, each such Purchaser Representative shall be
informed that such confidential information is strictly
confidential and shall be subject to confidentiality restrictions
in favor of the disclosing Purchaser with respect to the
confidential information disclosed by the Purchaser to such
Purchaser Representative. Notwithstanding anything to the contrary
herein, the foregoing restrictions shall not prevent the disclosure
by a Purchaser of any information (x) that is required to be
disclosed by order of a court of competent jurisdiction,
administrative body or other Governmental Authority (as defined in
the Purchase Agreement), or by subpoena, summons or legal process,
or by law, rule or regulation or (y) that is publicly available
(other than by a breach of such Purchaser’s confidentiality
obligations to the Company), provided that, to the extent permitted
by Law (as defined in the Purchase Agreement), in the event a
Purchaser or Purchaser Representative is required to make a
disclosure pursuant to clause (x) hereof, it shall provide to the
Board prompt notice of such disclosure (other than any such
disclosure required by any administrative body or other
Governmental Authority in the exercise of its regulatory or other
oversight authority with respect to such Purchaser or Purchaser
Representative). The confidentiality obligations herein shall, with
respect to any particular Purchaser, expire on the second (2nd)
anniversary of the date on which such Purchaser ceases to hold any
Shares.
2.5 Obligations of the
Purchasers.
(a)
Each Purchaser shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect
the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the Company
may reasonably request. At least five (5) Business Days prior to
the first anticipated filing date of any Registration Statement,
the Company shall notify each Purchaser of the information the
Company requires from such Purchaser if such Purchaser elects to
have any of its Registrable Securities included in the Registration
Statement. A Purchaser shall provide such information to the
Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such
Purchaser elects to have any of its Registrable Securities included
in the Registration Statement.
(b)
Each Purchaser, by its acceptance of the Registrable Securities
agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Purchaser has
notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration
Statement.
(c)
Each Purchaser agrees that, upon receipt of any notice from the
Company of either (i) the commencement of an Allowed Delay pursuant
to Section 2.1(b) or (ii) the happening of an event pursuant to
Section 2.4(d) and Section 2.4(e) hereof, such Purchaser will
immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable
Securities, until the Purchaser is advised by the Company that such
dispositions may again be made.
2.6 Indemnification.
(a)
Indemnification by the
Company. The Company will indemnify and hold harmless each
Purchaser and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who
controls such Purchaser within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, any
preliminary Prospectus or final Prospectus, or any amendment or
supplement thereof or any omission or alleged omission to state 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 light of the circumstances
under which they were made) not misleading; (ii) any “Blue Sky” application or other document
executed by the Company specifically for that purpose or based upon
written information furnished by the Company filed in any state or
other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such
application, document or information herein called a “Blue Sky
Application”);
(iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light
of the circumstances in which they were made; (iv) any violation by
the Company or its agents of any rule or regulation promulgated
under the Securities Act applicable to the Company or its agents
and relating to action or inaction required of the Company in
connection with such registration; or (v) any failure to register
or qualify the Registrable Securities included in any such
Registration Statement in any state where the Company or its agents
has affirmatively undertaken or agreed in writing that the Company
will undertake such registration or qualification on a
Purchaser’s behalf and
will reimburse such Purchaser, and each such officer, director or
member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided,
however, that
the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by such Purchaser or any such controlling person in
writing specifically for use in such Registration Statement or
Prospectus.
(b)
Indemnification by the
Purchasers. Each Purchaser agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees,
stockholders and each person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages,
liabilities and expense (including reasonable attorney fees)
resulting from any untrue statement or alleged untrue statement of
a material fact or any omission or alleged omission of a material
fact required to be stated in the Registration Statement or
Prospectus or preliminary Prospectus or amendment or supplement
thereto or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged
omission is contained in any information furnished in writing by
such Purchaser to the Company specifically for inclusion in such
Registration Statement or Prospectus or amendment or supplement
thereto. In no event shall the liability of a Purchaser be greater
in amount than the dollar amount of the proceeds (net of all
expense paid by such Purchaser in connection with any claim
relating to this Section 2.6 and the amount of any damages such
Purchaser has otherwise been required to pay by reason of such
untrue statement or omission) received by such Purchaser upon the
sale of the Registrable Securities included in the Registration
Statement giving rise to such indemnification
obligation.
(c)
Conduct of
Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to
the indemnified party (provided,
however, that
such indemnified party shall, at the expense of the indemnifying
party, be entitled to counsel of its own choosing to monitor such
defense); provided that,
subject to the preceding sentence, any Person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such
Person unless (a) the indemnifying party has agreed to pay such
fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of
any such Person, based upon written advice of its counsel, a
conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if
the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right
to assume the defense of such claim on behalf of such Person); 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
hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in
the same jurisdiction, be liable for fees or expenses of more than
one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or
litigation.
(d)
Contribution.
If for any reason the indemnification provided for in the preceding
paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable
considerations. 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 not guilty of such
fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this
Section 2.6 and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the
sale of the Registrable Securities giving rise to such contribution
obligation.
2.8 Termination of
Registration Rights. The registration rights provided to the
Holders under Section 2
shall terminate in their entirety upon the earlier to occur of: (i)
the date two years from the Closing Date; or (ii) at such time as
there are no Registrable Securities. Notwithstanding the foregoing,
Sections 2.3, 2.6 and 3 shall survive the termination of such
registration rights.
3. Miscellaneous.
3.1 Governing Law;
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
Delaware without regard to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state and federal courts located in the State
of Delaware for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection
with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying
of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
3.2 Successors and
Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding
upon, the successor and assigns of the parties hereto (other than
the rights of any Holder under Section 2 hereof, which shall not be
assignable and shall not inure to the benefit of any successor or
assign of a Holder). The Company may not assign its rights or
obligations hereunder except with the prior written consent of each
Holder. Each Holder may assign their respective rights hereunder
(other than the rights of any Holder under Section 2 hereof, which
shall not be assignable and shall not inure to the benefit of any
successor or assign of a Holder) in the manner and to the Persons
permitted under the Purchase Agreement.
3.3 Entire
Agreement; Amendment. This Agreement and the other
Transaction Documents constitute the full and entire understanding
and agreement between the parties with regard to the subjects
hereof and thereof. Any previous agreements among the parties
relative to the specific subject matter hereof are superseded by
this Agreement. Neither this Agreement nor any provision hereof may
be amended, changed, waived, discharged or terminated other than by
a written instrument signed by the party against who enforcement of
any such amendment, change, waiver, discharge or termination is
sought.
3.4 Notices.
All notices and other communications provided for or permitted
hereunder shall be made as set forth in Section 5.3 of the Purchase
Agreement.
3.5 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, 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
commercially 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.
3.6 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.
3.7 Counterparts.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof.
3.8 Delays or
Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any
breach or default of any other party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach or default, or any acquiescence
therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character of any breach or default under
this Agreement, or any waiver of any provisions or conditions of
this Agreement must be in writing and shall be effective only to
the extent specifically set forth in writing, and that all
remedies, either under this Agreement, by law or otherwise, shall
be cumulative and not alternative.
3.9 Consents. Any
permission, consent, or approval of any kind or character under
this Agreement shall be in writing and shall be effective only to
the extent specifically set forth in such writing.
3.10 SPECIFIC
PERFORMANCE. THE PARTIES HERETO AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS
AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH ITS SPECIFIC INTENT
OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE
PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS, WITHOUT
BOND, TO PREVENT OR CURE BREACHES OF THE PROVISIONS OF THIS
AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS
HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY
MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF
THIS AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN
DAMAGES WOULD BE ADEQUATE.
3.11 Construction of
Agreement. No provision of this Agreement shall be construed
against either party as the drafter thereof.
3.12 Section
References. Unless otherwise stated, any reference contained
herein to a Section or subsection refers to the provisions of this
Agreement.
3.13 Variations of
Pronouns. All pronouns and all variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the context in which they are used may
require.
[Remainder of Page Intentionally Left Blank; Signature Pages
Follow]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first written
above.
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ChromaDex Corporation
By:
/s/ Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title: Chief Executive Officer
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[Signature
Page to Registration Rights Agreement]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first written
above.
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PURCHASERS:
Winsave Resources Limited
By: /s/ Xxx
Xxx Xxx Xxxx
Name:
Xxx Xxx Xxx Xxxx
Title: Director
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[Signature
Page to Registration Rights Agreement]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first written
above.
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PURCHASERS:
Pioneer Step Holdings Limited
By: /s/ Xx
Xxxx Bun Xxxxxxx
Name:
Xx Xxxx Bun Xxxxxxx
Title: Authorized Signatory
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[Signature
Page to Registration Rights Agreement]
Annex A
PLAN OF DISTRIBUTION
We are
registering the shares of common stock issued to the selling
stockholders to permit the resale of these shares of common stock
by the holders of the shares of common stock from time to time
after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling stockholders of the shares of
common stock. We will bear all fees and expenses incident to our
obligation to register the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of
common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold
through underwriters or broker-dealers, the selling stockholders
will be responsible for underwriting discounts or commissions or
agent’s commissions. The
shares of common stock may be sold on any national securities
exchange or quotation service on which the securities may be listed
or quoted at the time of sale, in the over-the-counter market or in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market and in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale, or at negotiated
prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The selling stockholders may
use any one or more of the following methods when selling
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 resale by the broker-dealer for its
account;
● an exchange distribution in
accordance with the rules of the applicable exchange;
● privately negotiated
transactions;
● settlement of short sales
entered into after the effective date of the registration statement
of which this prospectus is a part;
● broker-dealers may agree with
the selling stockholders to sell a specified number of such shares
at a stipulated price per share;
● through the writing or
settlement of options or other hedging transactions, whether such
options are listed on an options exchange or
otherwise;
● a combination of any such
methods of sale; and
● any other method permitted
pursuant to applicable law.
The
selling stockholders also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if
available, rather than under this prospectus, provided that they
meet the criteria and conform to the requirements of those
provisions.
Broker-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in
sales. If the selling stockholders effect such transactions by
selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or
agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom
they may act as agent or to whom they may sell as principal. Such
commissions will be in amounts to be negotiated, but, except as set
forth in a supplement to this Prospectus, in the case of an agency
transaction will not be in excess of a customary brokerage
commission in compliance with FINRA Rule 5110.
In
connection with sales of the shares of common stock or otherwise,
the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the shares of common stock in the course
of hedging in positions they assume. The selling stockholders may
also sell shares of common stock short and if such short sale shall
take place after the date that this Registration Statement is
declared effective by the Commission, the selling stockholders may
deliver shares of common stock covered by this prospectus to close
out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or
pledge shares of common stock to broker-dealers that in turn may
sell such shares, to the extent permitted by applicable law. The
selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer
or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction). Notwithstanding the foregoing, the selling
stockholders have been advised that they may not use shares
registered on this registration statement to cover short sales of
our common stock made prior to the date the registration statement,
of which this prospectus forms a part, has been declared effective
by the SEC.
The
selling stockholders may, from time to time, pledge or grant a
security interest in some or all of the warrants or shares of
common stock owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders
to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling
stockholders also may transfer and donate the shares of common
stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer or agents participating
in the distribution of the shares of common stock may be deemed to
be “underwriters” within the meaning of
Section 2(11) of the
Securities Act in connection with such sales. In such event, any
commissions paid, or any discounts or concessions allowed to, any
such broker-dealer or agent 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. Selling
Stockholders who are “underwriters” within the meaning of
Section 2(11) of the
Securities Act will be subject to the prospectus delivery
requirements of the Securities Act and may be subject to certain
statutory liabilities of, including but not limited to,
Sections 11, 12 and 17 of
the Securities Act and Rule 10b-5 under the Securities Exchange
Act of 1934, as amended, or the Exchange Act.
Each
selling stockholder has informed the Company that it is not a
registered broker-dealer and does not have any written or oral
agreement or understanding, directly or indirectly, with any person
to distribute the common stock. Upon the Company being notified in
writing by a selling stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of common stock
through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant
to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling
stockholder and of the participating broker-dealer(s),
(ii) the number of shares
involved, (iii) the price
at which such the shares of common stock were sold,
(iv) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this
prospectus, and (vi) other
facts material to the transaction. In no event shall any
broker-dealer receive fees, commissions and markups, which, in the
aggregate, would exceed eight percent (8%).
Under
the securities laws of some states, the shares of common stock may
be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock
may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or
all of the shares of common stock registered pursuant to the shelf
registration statement, of which this prospectus forms a
part.
Each
selling stockholder and any other person participating in such
distribution will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including, without limitation,
Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of
any of the shares of common stock by the selling stockholder and
any other participating person. Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the
shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any
person or entity to engage in market-making activities with respect
to the shares of common stock.
We will
pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without
limitation, Securities and Exchange Commission filing fees and
expenses of compliance with state securities or “blue sky” laws; provided, however, that each
selling stockholder will pay all underwriting discounts and selling
commissions, if any, and any legal expenses incurred by it. We will
indemnify the selling stockholders against certain liabilities,
including some liabilities under the Securities Act, in accordance
with a registration rights agreement, or the selling stockholders
will be entitled to contribution. We may be indemnified by the
selling stockholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any
written information furnished to us by the selling stockholders
specifically for use in this prospectus, in accordance with the
related registration rights agreements, or we may be entitled to
contribution.
