Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated the 7th day of May, 2001
between PACIFIC FIRST NATIONAL, INC., TST CORPORATION, STATE MANAGEMENT
ASSOCIATES, L.C., RB MUTUAL VENTURES, INC. BUENA VISTA CONSULTING, INC., 3GC,
INC. (referred to as the "Investors"), COLUMBIA FINANCIAL GROUP, INC. (the
"Placement Agent") and Whole Living, Inc., a corporation incorporated under
the laws of the State of Nevada, and having its principle place of business at
000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxx 00000 (the "Company").
WHEREAS, simultaneously with the execution and delivery of this
Agreement and from time to time thereafter, the Investors are purchasing from
the Company, pursuant to the Unit Purchase Agreement dated the date hereof
(the "Purchase Agreement"), shares of Common Stock and Warrants (hereinafter
collectively referred to as the "Securities" of the Company); All capitalized
terms not hereinafter defined shall have that meaning assigned to them in the
Purchase Agreement; and
WHEREAS, prior to the execution and delivery of this Agreement, the
Company has issued Warrants to Columbia, in return for services rendered, from
time to time as provided in a separate Consulting Agreement (the "Consulting
Agreement"); and
WHEREAS, the Company desires to grant to the Holders the
registration rights set forth herein.
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term
"Registrable Security" means the Common Stock of the Company issued under the
Purchase Agreement or the Consulting Agreement; provided, however, that with
respect to any particular Registrable Security, such security shall cease to
be a Registrable Security when, as of the date of determination, (i) it has
been effectively registered under the Securities Act of 1933, as amended (the
"1933 Act") and disposed of pursuant thereto, (ii) registration under the
1933 Act is no longer required for the immediate public distribution of such
security as a result of the provisions of Rule 144 promulgated under the 1933
Act, or (iii) it has ceased to be outstanding. The term "Registrable
Securities" means any and/or all of the securities falling within the
foregoing definition of a Registrable Security. In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such adjustment shall be made in the
definition of Registrable Security as is appropriate in order to prevent any
dilution or enlargement of the rights granted pursuant to this Section.
Section 2. Restrictions on Transfer. The Holders acknowledge and
understand that prior to the registration of the Registrable Securities as
provided herein, the Registrable Securities
and the Securities are "restricted securities" as defined in Rule 144
promulgated under the Act. The Holders understand that no disposition or
transfer of the Registrable Securities or the Securities may be made by the
Holders in the absence of (i) an opinion of counsel to the Holders that such
transfer may be made without registration under the 1933 Act, or (ii) such
registration.
Section 3. Registration Rights.
(a) The Company agrees that it will prepare and file with
the Securities and Exchange Commission ("SEC"), on or prior to June 30, 2001,
a registration statement (on Form SB-2, or other appropriate registration
statement) under the 1933 Act (the "Registration Statement"), at the sole
expense of the Company (except as provided in Section 3(c) hereof), in respect
of all holders of Registrable Securities, so as to permit a public offering
and sale of the Registrable Securities under the Act. The Company shall use
its best efforts to cause the Registration Statement to become effective on or
before August 31, 2001. The number of shares of Common Stock designated in
the Registration Statement to be registered shall be not less than (i) 100% of
the number of Common Shares acquired under the Purchase Agreement, plus (ii)
100% of the number of Warrant Shares issuable assuming all of the Warrants had
been issued pursuant to the Consulting Agreement.
(b) The Company will maintain the Registration Statement,
or post-effective amendment filed under this Section 3 hereof current under
the 1933 Act until the earlier of (i) the date that all of the Registrable
Securities have been sold pursuant to the applicable Registration Statement,
(ii) the date the holders thereof receive an opinion of counsel that the
Registrable Securities may be sold under the provisions of Rule 144 (without
limitation) or (iii) three years after the Subscription Date.
(c) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing
of the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and blue sky laws (including, without limitation, all
attorneys' fees) shall be borne by the Company. The Holders shall bear the
cost, pro rata, of underwriting discounts and commissions, if any, applicable
to the Registrable Securities being registered and the fees and expenses of
its counsel. The Company shall qualify any of the securities for sale in such
states as such Holder reasonably designates and shall furnish indemnification
in the manner provided in Section 6 hereof. The Company at its expense will
supply the Holders with copies of the Registration Statement and the
prospectus or offering circular included therein and other related documents
in such quantities as may be reasonably requested by the Holders.
(d) The Company shall not be required by this Section 3 to
include a Holder's Registrable Securities in any Registration Statement which
is to be filed if, in the opinion of counsel for both the Holder and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for the Holder and
the Company) the proposed offering or other transfer as to which such
registration is requested is exempt from
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applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities", as defined in Rule 144 under the 1933 Act.
(e) In the event the Registration Statement to be filed by
the Company pursuant to Section 3(a) above is not filed with the SEC on or
before July 15, 2001 and/or the Registration Statement is not declared
effective by the SEC on or before September 15, 2001, then the Company will
pay the Holders (pro rated on a daily basis), as liquidated damages for such
failure and not as a penalty, five percent of the purchase price of the then
outstanding Securities for every 30 calendar day period until the Registration
Statement has been filed and/or declared effective. Such payment of the
liquidated damages shall be made to the Holders in cash, immediately upon
demand, provided, however, that the payment of such liquidated damages shall
not relieve the Company from its obligations to register the Registrable
Securities. If the Company does not remit the damages to the Holder as set
forth above, the Company will pay the Holders reasonable costs of collection,
including attorneys fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit Holder's other rights or remedies as set forth in this Agreement.
(f) The Company agrees that it shall declare the
Registration Statement effective within three Business Days after being
informed by the SEC that it may do so. The Company also agrees that it shall
respond to any questions and/or comments from the SEC which relate to the
Registration Statement within five Business Days of receipt of such question
or comment.
Section 4. Cooperation with Company. Each of the Holders will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the Company
and executing and returning all documents reasonably requested in connection
with the registration and sale of the Registrable Securities.
Section 5. Registration Procedures. If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Act, the Company
shall (except as otherwise provided in this Agreement), as expeditiously as
possible:
(a) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Act with respect to the
sale or other disposition of all securities covered by such registration
statement whenever the Holder shall desire to sell or otherwise dispose of the
same (including prospectus supplements with respect to the sales of securities
from time to time in connection with a registration statement pursuant to Rule
415 promulgated under the Act);
(b) furnish to each Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement
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to any prospectus, in conformity with the requirements of the Act, and such
other documents, as such Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by such Holder;
(c) register and qualify the securities covered by the
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Holders shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to enable each
Holder to consummate the public sale or other disposition in such jurisdiction
of the securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process;
(d) list such securities on the Principal Market on which
any securities of the Company are then listed, if the listing of such
securities is then permitted under the rules of such Principal Market;
(e) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(f) notify each Holder of Registrable Securities covered by
the Registration Statement any time when a prospectus relating thereto covered
by the Registration Statement is required to be delivered under the Act, and
of the happening of any event of which it has knowledge as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
Section 6. Information by Holder. Each Holder of Registrable
Securities included in any registration statement shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section.
Section 7. Assignment. The rights granted the Holders under this
Agreement shall not be assigned without the written consent of the Company,
which consent shall not be unreasonably withheld. This Agreement is binding
upon and inures to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns.
Section 8. Termination of Registration Rights. The rights granted
pursuant to this Agreement shall terminate as to each Holder (and permitted
transferee under Section 7 above) upon the occurrence of any of the following:
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(a) all such Holder's securities subject to this Agreement
have been registered;
(b) all of such Holder's securities subject to this
Agreement may be sold without such registration pursuant to Rule 144
promulgated by the SEC pursuant to the Securities Act; or
(c) all of such Holder's securities subject to this
Agreement can be sold pursuant to Rule 144(k) without volume limitation.
Section 9. Indemnification.
(a) In the event of the filing of any Registration
Statement with respect to Registrable Securities pursuant to Section 3 hereof,
the Company agrees to indemnify and hold harmless the Holders, and each
officer, director of the Holders or person, if any, who controls the Holders
within the meaning of the Securities Act ("Distributing Holders") against any
losses, claims, damages or liabilities, joint or several (which shall, for all
purposes of this Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), to which the Distributing
Holders 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 any untrue statement or alleged untrue
statement of any material fact contained in any such Registration Statement or
any related preliminary prospectus, final prospectus, offering circular,
notification or amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any such
case 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 made in such Registration Statement, preliminary
prospectus, final prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Distributing Holders, specifically
for use in the preparation thereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) In the event of the filing of any Registration
Statement with respect to Registrable Securities pursuant to Section 3 hereof,
each Distributing Holder agrees that it will indemnify and hold harmless the
Company, and each officer, director of the Company or person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company or any such
officer, director or controlling person 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 any
untrue statement or alleged untrue statement of any material fact contained in
a Registration Statement, requested by such Distributing Holder, or any
related preliminary prospectus, final prospectus, offering circular,
notification or amendment or supplement thereto, or
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arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary prospectus,
final prospectus, offering circular, notification or amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by such Distributing Holder, specifically for use in
the preparation thereof and, provided further, that the indemnity agreement
contained in this Section 9(b) shall not inure to the benefit of the Company
with respect to any person asserting such loss, claim, damage or liability who
purchased the Registrable Securities which are the subject thereof if the
Company failed to send or give (in violation of the Securities Act or the
rules and regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement to such person at or prior to the
written confirmation to such person of the sale of such Registrable
Securities, where the Company was obligated to do so under the Securities Act
or the rules and regulations promulgated thereunder. This indemnity agreement
will be in addition to any liability which the Distributing Holders may
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have
to any indemnified party otherwise than as to the particular item as to which
indemnification is then being sought solely pursuant to this Section. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall not be at
the expense of the indemnifying party if the indemnifying party has assumed
the defense of the action with counsel reasonably satisfactory to the
indemnified party; provided that if the indemnified party is the Distributing
Holder, the fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party, or (ii) the named parties to
any such action (including any impleaded parties) include both the
Distributing Holder and the indemnifying party and the Distributing Holder
shall have been advised by such counsel that there may be one or more legal
defenses available to the indemnifying party different from or in conflict
with any legal defenses which may be available to the Distributing Holder (in
which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of the Distributing Holder, it being
understood, however, that the indemnifying party shall, in connection with any
one such
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action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable only for the reasonable fees and expenses of one separate firm of
attorneys for the Distributing Holder, which firm shall be designated in
writing by the Distributing Holder). No settlement of any action against an
indemnified party shall be made without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld.
Section 10. Contribution. In order to provide for just and
equitable contribution under the Securities Act in any case in which (i) the
Distributing Holder makes a claim for indemnification pursuant to Section 9
hereof but is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that the express
provisions of Section 9 hereof provide for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
Distributing Holder, then the Company and the applicable Distributing Holder
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the applicable
Distributing Holder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Distributing Holder agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. 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.
Section 11. Notices. Any notice pursuant to this Agreement by the
Company or by the Holders shall be in writing and shall be deemed to have been
duly given if delivered by (i) hand, (ii) by facsimile and followed by mail
delivery or (iii) if mailed by certified mail, return receipt requested,
postage prepaid, addressed as follows:
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(a) If to the Company:
Whole Living, Inc.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to the Placement Agent:
Columbia Financial Group, Inc.
0000 Xxxx Xxxx, #000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Rieu
(c) If to the Investors:
TST Corporation
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Pacific First National, Inc.
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
State Management Associates, L.C.
000 Xxxx 0xx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
RB Mutual Ventures, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Buena Vista Consulting, inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
3GC, Inc.
0000 XxXxxxxx
Xxx Xxxxx, XX 00000
Notices shall be deemed given at the time they are delivered personally
or five calendar days after they are mailed in the manner set forth above. If
notice is delivered by facsimile to the
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Company and followed by mail, delivery shall be deemed given three calendar
days after such facsimile is sent.
Section 12. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 14. Choice of Law; Venue; Jurisdiction. This Agreement will
be construed and enforced in accordance with and governed by the laws of the
State of Utah, except for matters arising under the Securities Act, without
reference to principles of conflicts of law. Each of the parties consents to
the jurisdiction of the U.S. District Court sitting in the State of Utah, for
the Central District of Utah in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. Each party hereby
agrees that if another party to this Agreement obtains a judgment against it
in such a proceeding, the party which obtained such judgment may enforce same
by summary judgment in the courts of any country having jurisdiction over the
party against whom such judgment was obtained, and each party hereby waives
any defenses available to it under local law and agrees to the enforcement of
such a judgment. Each party to this Agreement irrevocably consents to the
service of process in any such proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such party at its address
set forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law. Each party waives its right to
a trial by jury.
Section 15. Severability. If any provision of this Agreement shall
for any reason be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof and this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on the day and year first above written.
WHOLE LIVING, INC.
Attest:
/s/ Xxxxx Xxxxxx /s/ Xxx Xxxxxxxx
By:____________________ By:____________________________
Name: Xxxxx Xxxxxx Name: Xxx Xxxxxxxx
Title: Paralegal Title: Pres.
COLUMBIA FINANCIAL GROUP, INC.
/s/ Xxxxxxx X. Rieu
By____________________________
Name: Xxxxxxx X. Rieu
Title: President
PACIFIC FIRST NATIONAL, INC.
/s/ signature illegible
By____________________________
Name: illegible
Title: illegible
TST CORPORATION
/s/ Xxxx X. Xxxxxx
By____________________________
Name: Xxxx X. Xxxxxx
Title: President
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STATE MANAGEMENT ASSOCIATES, L.C.
/s/ X. Xxxxx
By____________________________
Title: Manager
RB MUTUAL VENTURES, INC.
/s/ signature illegible
By____________________________
Title:
BUENA VISTA CONSULTING, INC.
/s/ signature illegible
By____________________________
Title: Sec.
3GC, INC.
/s/ signature illegible
By____________________________
Title: signature illegible
