REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2
This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of _________________ (“Effective
Date”), by and among Youngevity International, Inc., a
Delaware corporation, its successors and assigns (the
“Company”), and _______________(the
“Investor”).
R E C I T A L S
WHEREAS, Investor
and the Company have entered into a Securities Purchase Agreement
(the “Agreement”), dated ________, pursuant to which
Investor has agreed to purchase _____ shares of common stock of the
Company at a price of $4.75 per share in two tranches, or ______
shares for a payment of ______ each (“Purchased
Shares”);
WHEREAS, the
Company has agreed to issue Investor additional shares of common
stock (“True-up Shares”) of the Company in the event
that the average of the 15 lowest closing prices for the
Company’s common stock on NASDAQ or other primary trading
market for the Company’s common stock (the average of such
lowest closing prices being herein referred to, the “True-up
Price”) during the period beginning on the Effective Date and
ending on the date 90 days from the effective date of the
Registration Statement (the “Subsequent Pricing
Period”) is less than $4.75 per share;
WHEREAS, the
Company has agreed to issue Investor a banking advisory fee of
_____ shares of common stock of the Company upon each closed
tranche, or _____ shares in total (“Advisory
Shares”);
WHEREAS, the
Company has issued to the Investor a Warrant, _______8, exercisable
for ____ shares of common stock of the Company (“Warrant
Exercise Shares”);
WHEREAS, as a
material consideration for the Investor’s execution of the
Agreement, the Company has agreed to register Purchased Shares,
True-up Shares, Advisory Shares and Warrant Exercise Shares,
subject to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as
follows:
1. Certain
Definitions. In
addition to those terms defined within this Agreement, as used in
this Agreement, the following terms shall have the following
respective meanings:
“Commission”
means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended, or any similar federal rule or statute and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
“Holder”
and “Holders” means
(i) the Investor and (ii) any person holding Registrable
Securities to whom the registration rights have been validly
transferred.
“Registrable
Securities” shall mean (i) the shares of the
Company’s common stock that are issuable pursuant to the
Securities Purchase Agreement; (ii) the True-up Shares; (iii)
the Advisory Shares, (iv) the Warrant Exercise Shares, and
(v) any common stock of the Company issued or issuable in
respect of the foregoing shares of the Company’s common stock
upon any stock split, stock dividend, recapitalization, or similar
event; provided, however, that securities shall only be treated as
Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter
in a public distribution or a public securities
transaction.
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The
terms “register,”
“registered” and
“registration” refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration
statement by the Commission.
“Registration
Expenses” shall mean all expenses incurred by the
Company in complying with Section 2.1, including without
limitation, all registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
“Rule
144” and “Rule 145” shall mean
Rules 144 and 145, respectively, promulgated under the
Securities Act, or any similar federal rules thereunder, all as the
same shall be in effect at the time.
“Securities
Act” shall mean the Securities Act of 1933, as
amended, or any similar federal rule or statute and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
“Selling
Expenses” shall mean all underwriting discounts and
selling commissions applicable to the securities registered by the
Holders.
2. Registration
2.1 Registration
Filing.
(a) Filing for
Registrable Securities. The Company shall file with the
Commission, within forty five (45) days from the date of this
Agreement, a registration statement on Form S-3 or S-1 for the
resale of all of the Registrable Securities (“Registration
Statement”). The Registration Statement will include 618,860
Registrable Securities for resale by Holder (subject to Section
2.3(b) below). The Registration Statement must be declared
effective by the Commission within seventy five (75) days from the
date of this Agreement. Notwithstanding the foregoing, the Company
will use best efforts to file the Registration Statement within
thirty (30) days and to have the Registration Statement declared
effective by the Commission within sixty (60) days from the date of
this Agreement.
(b) Inclusion
of Other Shares. The Company may, at its option, include
shares held by other stockholders of the Company in any such
registration statement filed under this
Section 2.1.
2.2 Expenses of
Registration. All Registration Expenses incurred in
connection with a registration pursuant to Section 2.1 shall
be borne by the Company; provided, however, that the Company shall
have no obligation to pay or otherwise bear (i) any portion of
the fees or disbursements of counsel for the Holders in connection
with the registration of their Registrable Securities,
(ii) any portion of any underwriter’s commissions or
discounts, expense allowance or fees or stock transfer taxes
attributable to the Registrable Securities being offered and sold
by the Holders of Registrable Securities, or (iii) any of such
expenses if the payment of such expenses by the Company is
prohibited by the laws of a state in which such offering is
qualified and only to the extent so prohibited. Unless otherwise
stated, all Selling Expenses relating to be borne by the Holders
will be divided pro rata on the basis of the number of shares so
registered or proposed to be so registered.
2.3 Registration
Procedures. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will keep each
Holder advised in writing as to the initiation of such registration
and as to the completion thereof. The Company will:
(a) Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary
and use its best efforts to cause such registration statement to
become and remain effective until (i) the second anniversary
following the date the registration statement is declared
effective, (ii) all of the Registrable Securities included in
the registration statement have been sold, or (iii) all of the
Registrable Securities may be sold under Rule 144 without any
volume limitation and Holders have given written consent to remove
the Registerable Securities from the Registration Statement,
whichever comes first, except that the Company shall be permitted
to suspend the use of the registration statement during certain
periods as set forth below in this Section 2.3;
and
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(b) Furnish to the Holders participating in such
registration and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
Notwithstanding
the foregoing, the Company shall notify each Holder whose
securities are included in a registration of the happening of any
event which makes any statement made in the registration statement
or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
which requires the making of any changes in the registration
statement or prospectus so that, in the case of the registration
statement, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. In
such event, the Company may suspend use of the prospectus on
written notice to each participating Holder, in which case each
participating Holder shall not dispose of Registrable Securities
covered by the registration statement or prospectus until copies of
a supplemented or amended prospectus are distributed to the
participating Holders or until the participating Holders are
advised in writing by the Company that the use of the applicable
prospectus may be resumed (the period of such suspension shall be a
“Blackout
Period”). The Company shall ensure that the use of the
prospectus may be resumed as soon as is reasonably practicable. The
Company shall, upon the occurrence of any event contemplated by
this paragraph, prepare a supplement or post-effective amendment to
the registration statement or a supplement to the related
prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold
thereunder, such prospectus will not contain an untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. In the event that the Company
declares one or more Blackout Periods, the two-year anniversary
period set forth in Section 2.3(a) shall be extended by the
number of days that constitute any such Blackout
Periods.
(c) The
Holder agrees to furnish to the Company a completed Selling
Shareholder Questionnaire in the form attached to this Agreement as
Annex A or in a
form mutually agreeable between the parties. At least five trading
days prior to the first anticipated filing date of a Registration
Statement for any registration under this Agreement, the Company
will notify the Holder of the information the Company requires from
that Holder other than the information contained in the Selling
Shareholder Questionnaire, if any, which shall be completed and
delivered to the Company promptly upon request and, in any event,
within three Trading Days prior to the applicable anticipated
filing date. Each Holder further agrees that it shall not be
entitled to be named as a Selling Shareholder in the Registration
Statement or use the Prospectus for offers and resales of
Registrable Securities at any time and the Company shall have nor
registration obligations under this Section 2.3 , unless the Holder
has returned to the Company a completed and signed Selling
Shareholder Questionnaire and a response to any reasonable requests
for further information as described in the previous sentence. If
the Holder of Registrable Securities returns a Selling Shareholder
Questionnaire or a request for further information, in either case,
after its respective deadline, the Company shall use its
commercially reasonable efforts to take such actions as are
required to name the Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective
amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities
identified in such late Selling Shareholder Questionnaire or
request for further information. The Holder acknowledges and agrees
that the information in the Selling Shareholder Questionnaire or
request for further information as described in this Section 2.3(c)
will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information
in the Registration Statement. Holder acknowledges that it may be
listed as an “underwriter” in the Registration
Statement.
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2.4 Indemnification
(a) The Company will indemnify each Holder, each of its
officers and directors and partners, and each person controlling
such Holder within the meaning of Section 15 of the Securities
Act, with respect to which registration has been effected pursuant
to this Agreement, against all expenses, claims, losses, damages
and liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced
or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any
such registration, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act,
state securities laws or any rule or regulation promulgated under
such laws applicable to the Company in connection with any such
registration, and the Company will reimburse each such Holder, each
of its officers and directors, and each person controlling such
Holder, for any legal and any other expenses reasonably incurred,
as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of such Holder for use
therein.
(b) Each party entitled to indemnification under this
Section 2.4 (the “Indemnified Party”) shall
give notice to the party required to provide indemnification (the
“Indemnifying
Party”) promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement unless the failure to give such notice is materially
prejudicial to an Indemnifying Party’s ability to defend such
action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of
interest or there are separate and different defenses. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party (whose
consent shall not be unreasonably withheld), consent to entry of
any judgment or enter into any settlement which 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 to such claim or litigation.
2.5 Liquidated
Damages
(a)
If (i) the registration statement is not filed with the
Commission on or prior to the date forty five (45) days from the
date of this Agreement, (ii) the registration statement has
not been declared effective by the Commission on or prior to the
date seventy five (75) days from the date of this Agreement, or
(iii) any registration statement required by this Agreement
is filed and declared effective by the Commission but shall
thereafter cease to be effective or fail to be usable for its
intended purpose (each such event referred to as a
“Registration Default”), the Company hereby agrees to
pay liquidated damages (“Liquidated Damages”) to each
Holder of the Registrable Securities in an amount equal to 1% of
the Purchase Price, as defined in the Securities Purchase
Agreement, per month which Liquidated Damages shall be increased to
5% of the Purchase Price per month if the Registration Statement is
not effective within 150 days from the Effective Date.
Following the cure of all Registration Defaults relating to any
particular Registrable Securities, Liquidated Damages shall cease
to accrue; provided, however, that, if after Liquidated
Damages have ceased to accrue, a different Registration Default
occurs, Liquidated Damages shall again accrue pursuant to the
foregoing provisions. All accrued Liquidated Damages shall be
paid in the manner set forth in the Securities Purchase
Agreement.
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(b) The
Company and Investor hereto acknowledge and agree that the sums
payable as Liquidated Damages under subsection 2.5(a) above shall
constitute liquidated damages and not penalties and are in addition
to all other rights of the Holders, including the right to call a
default under the Securities Purchase Agreement. The
parties further acknowledge that (i) the amount of loss or damages
likely to be incurred is incapable or is difficult to precisely
estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly
disproportionate to, the probable loss likely to be incurred in
connection with any failure by the Company to obtain or maintain
the effectiveness of a registration statement, (iii) one of the
reasons for the Company and the Investor reaching an agreement as
to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been
represented by sophisticated and able legal counsel and negotiated
this Agreement at arm’s length.
3. Transfer of
Rights. The
rights granted under Section 2 of this Agreement may be
assigned to any transferee or assignee in connection with any
transfer or assignment by the Holder of such Holder’s
Warrant, Securities Purchase Agreement, True-up Shares and Advisory
Shares or Registrable Securities, provided that: (i) such
transfer is otherwise effected in accordance with applicable
securities laws and the terms of this Agreement; (ii) written
notice is promptly given to the Company; and (iii) such
transferee or assignee agrees in writing to be bound by the
provisions of this Agreement and by any other agreement reasonably
necessary to ensure compliance with federal, state, and foreign
securities laws.
4. Miscellaneous.
4.1 Consent to
Jurisdiction. The Company and the Holders (i) hereby
irrevocably submit to the exclusive jurisdiction of the United
States District Court and the courts of the State of Florida
located in Broward County, Florida, for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement,
and (ii) hereby waive, and agree not to assert in any such
suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and each
Holder consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 4.1 shall
affect or limit any right to serve process in any other manner
permitted by law.
4.2 Amendments and
Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and Investor or,
if investor does not own Registerable Securities, a majority in
interest of the Holders.
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4.3 Notices. Any
and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice
prior to 5:00 p.m., Eastern Standard Time, on a business day,
(ii) the first business day after the date of transmission, if
such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than
5:00 p.m., Eastern Standard Time, on any date and earlier than
11:59 p.m., Eastern Standard Time, on such date,
(iii) the business day following the date of mailing, if sent
by nationally recognized overnight courier service, or
(iv) actual receipt by the party to whom such notice is
required to be given.
If to
the Company:
0000
Xxxxxxx Xxxx
Xxxxx
Xxxxx, XX 00000
Attn:
Xxxxxxx Xxxxxxx
with a
copy to:
Gracin
& Xxxxxx, LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx, Esq.
If to
the Investor:
_
with a
copy to:
4.4 Successors and
Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted
assigns.
4.5 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, and
all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as
if such facsimile signature were the original thereof.
4.6 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to
principles of conflicts of law thereof. This Agreement shall not be
interpreted or construed with any presumption against the party
causing this Agreement to be drafted.
4.7 Attorneys
Fees. In the event the Holder hereof shall refer this
Agreement to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or
effecting the enforcement of the Holder's rights, including
reasonable attorney's fees, if a suit is instituted and Holder is
the prevailing party.
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4.8 Severability.
If any term, provision, covenant or restriction of this Agreement
is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and
employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
4.9 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.
4.10 Time is of the
Essence. Time is of the essence in regards to every
provision of this Agreement.
4.11 Conflicts.
In the event this Agreement conflicts with any provision of any
other agreement between the Company and Investor, this Agreement
will control.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
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By:
___________________________________
Name:
Xxxxxxx Xxxxxxx
Title:
Chief Executive Officer
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Investor
By:
___________________________________
Name:
Title:
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