EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July 26, 2005, by and between Naturade, Inc., a Delaware
corporation (the "Parent"), and Laurus Master Fund, Ltd. (the "Purchaser").
This Agreement is made pursuant to the Security and Purchase
Agreement, dated as of the date hereof, by and among the Purchaser, the Parent
and various subsidiaries of the Parent (as amended, modified or supplemented
from time to time, the "Security Agreement"), and pursuant to the Notes, the
Warrants and the Options referred to therein.
The Parent and the Purchaser hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Security Agreement shall have the meanings given such
terms in the Security Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Parent's common stock, par value
$0.0001 per share.
"Effectiveness Date" means, (i) with respect to the Registration
Statement required to be filed in connection with the Term Note, Minimum
Borrowing Note, Warrants and Options issued on the initial funding date under
the Security Agreement, a date no later than one hundred twenty (120) days
following such initial funding date and (ii) with respect to each additional
Registration Statement required to be filed hereunder, a date no later than
thirty (30) days following the applicable Filing Date.
"Effectiveness Period" has the meaning set forth in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
"Filing Date" means, with respect to (1) the Registration Statement
which is required to be filed in connection with the shares of Common Stock
issuable upon conversion of the Term Note and Minimum Borrowing Note made on the
initial funding date, the date which is thirty (30) days after the date hereof,
(2) the Registration Statement required to be filed in connection with each
additional Minimum Borrowing Note funded after the initial funding date, the
date which is thirty (30) days after such funding of such additional Minimum
Borrowing Note, (3) the Registration Statement required to be filed in
connection with the shares of Common Stock issuable to the Holder upon exercise
of a Warrant, the date which is thirty (30) days after the issuance of such
Warrant, (4) the Registration Statement required to be filed in connection with
the shares of Common Stock issuable to the Holder upon exercise of an Option,
the date which is thirty (30) days after the issuance of such Option, and (5)
the Registration Statement required to be filed in connection with the shares of
Common Stock issuable to the Holder as a result of adjustments to the Fixed
Conversion Price or the Exercise Price, as the case
may be, made pursuant to Section 3.5 of the Term Note, Section 2.5 of the
Revolving Note, Section 3.5 of the Minimum Borrowing Notes, Section 4 of the
Warrant, Section 4 of the Option or otherwise, thirty (30) days after the
occurrence of such event or the date of the adjustment of the Fixed Conversion
Price or Exercise Price, as the case may be. Notwithstanding anything contrary
set forth in the foregoing, if a Filing Date shall occur on any day within the
period commencing on the 75th day following the end of any fiscal year of the
Parent and ending on the 120th day following the end of any fiscal year of the
Parent, the Filing Date shall instead be the 130th day following the end if the
applicable fiscal year of the Parent.
"Holder" or "Holders" means the Purchaser or any of its affiliates
or transferees to the extent any of them hold Registrable Securities, other then
those purchasing Registrable Securities in a market transaction.
"Indemnified Party" has the meaning set forth in Section 5(c).
"Indemnifying Party" has the meaning set forth in Section 5(c).
"Options" means the options issued in connection with the Security
Agreement, whether on the date thereof or thereafter.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means the shares of Common Stock issued
upon the conversion of the Term Note and each Minimum Borrowing Note, issuable
upon exercise of the Warrants and issuable upon exercise of the Options.
"Registration Statement" means each registration statement required
to be filed hereunder, including the Prospectus therein, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
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"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute.
"Security Agreement" has the meaning given to such term in the
Preamble hereto.
"Trading Market" means any of the NASD Over The Counter Bulletin
Board, NASDAQ SmallCap Market, the NASDAQ National Market, the American Stock
Exchange or the New York Stock Exchange
"Warrants" means the Common Stock purchase warrants issued in
connection with the Security Agreement, whether on the date thereof or
thereafter.
2. REGISTRATION.
(a) On or prior to each Filing Date, the Parent shall prepare and
file with the Commission a Registration Statement covering the Registrable
Securities for a selling stockholder resale offering to be made on a continuous
basis pursuant to Rule 415. Each Registration Statement shall be on Form S-3
(except if the Parent is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith). The Parent shall cause each
Registration Statement to become effective and remain effective as provided
herein. The Parent shall use its reasonable commercial efforts to cause each
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date. The Parent shall use its reasonable commercial efforts
to keep each Registration Statement continuously effective under the Securities
Act until the date which is the earlier date of when (i) all Registrable
Securities covered by such Registration Statement have been sold or (ii) all
Registrable Securities covered by such Registration Statement may be sold
immediately without registration under the Securities Act and without volume
restrictions pursuant to Rule 144(k), as determined by the counsel to the Parent
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Parent's transfer agent and the affected Holders (each, an "Effectiveness
Period").
If: (i) any Registration Statement is not filed on or prior to the
applicable Filing Date for such Registration Statement; (ii) a Registration
Statement filed hereunder is not declared effective by the Commission by the
applicable Effectiveness Date; (iii) after a Registration Statement is filed
with and declared effective by the Commission, a Discontinuation Event (as
hereafter defined) shall occur and be continuing, or such Registration Statement
ceases to be effective (by suspension or otherwise) as to all Registrable
Securities to which it is required to relate at any time prior to the expiration
of the Effectiveness Period applicable to such Registration Statement (without
being succeeded immediately by an additional Registration Statement filed and
declared effective), for a period of time which shall exceed 30 days in the
aggregate per year or more than 20 consecutive calendar days (defined as a
period of 365 days commencing on the date such Registration Statement is
declared effective); or (iv) the Common
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Stock is not listed or quoted, or is suspended from trading on any Trading
Market for a period of three (3) consecutive Trading Days (provided the Parent
shall not have been able to cure such trading suspension within 30 days of the
notice thereof or list the Common Stock on another Trading Market); (any such
failure or breach being referred to as an "Event," and for purposes of clause
(i) or (ii) the date on which such Event occurs, or for purposes of clause (iii)
the date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as "Event Date"), then as
partial relief for the damages to the Purchaser by reason of the occurrence of
any such Event (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Parent shall pay to the Purchaser for each
day that an Event has occurred and is continuing, an amount in cash equal to
one-thirtieth (1/30th) of the product of: (A) the then outstanding principal
amount of the Minimum Borrowing Note multiplied by (B) 0.02. In the event the
Parent fails to make any payments pursuant to this Section 2(b) in a timely
manner, such payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full.
(b) Within three business days of the Effectiveness Date, the Parent
shall cause its counsel to issue a blanket opinion in the form attached hereto
as Exhibit A, to the transfer agent stating that the shares are subject to an
effective registration statement and can be reissued free of restrictive legend
upon notice of a sale by the Purchaser and confirmation by the Purchaser that it
has complied with the prospectus delivery requirements, provided that the Parent
has not advised the transfer agent orally or in writing that the opinion has
been withdrawn. Copies of the blanket opinion required by this Section 2(c)
shall be delivered to the Purchaser within the time frame set forth above.
3. REGISTRATION PROCEDURES. If and whenever the Parent is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Parent will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities, respond as promptly as possible to
any comments received from the Commission, and use its best efforts to cause
such Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of all
filings and Commission letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such Registration Statement and to keep such Registration Statement effective
until the expiration of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish to the Purchaser such number of copies of the
Registration Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to facilitate
the public sale or disposition of the Registrable Securities covered by such
Registration Statement;
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(d) use its commercially reasonable efforts to register or qualify
the Purchaser's Registrable Securities covered by such Registration Statement
under the securities or "blue sky" laws of such jurisdictions within the United
States as the Purchaser may reasonably request, provided, however, that the
Parent shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;
(e) list the Registrable Securities covered by such Registration
Statement with any securities exchange on which the Common Stock of the Parent
is then listed;
(f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Parent has knowledge as a result of which
the Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and
(g) make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly available,
non-confidential financial and other records, pertinent corporate documents and
properties of the Parent, and cause the Parent's officers, directors and
employees to supply all publicly available, non-confidential information
reasonably requested by the attorney, accountant or agent of the Purchaser.
4. REGISTRATION EXPENSES. All expenses relating to the Parent's compliance
with Sections 2 and 3 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Parent, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Parent shall only be
responsible for all Registration Expenses.
5. INDEMNIFICATION.
(a) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Parent will indemnify
and hold harmless each Holder, and its officers, directors and each other
person, if any, who controls such Holder within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which such Holder, or such persons 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 Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or
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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, and will reimburse such Holder, and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Parent 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 or on
behalf of the Purchaser or any such person in writing specifically for use in
any such document.
(b) In the event of a registration of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Parent, and its officers, directors and each
other person, if any, who controls the Parent within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Parent or such persons 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 which was
furnished in writing by the Purchaser to the Parent expressly for use in (and
such information is contained in) the Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained therein, or
any amendment or supplement thereof, 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, and
will reimburse the Parent and each such person for any reasonable legal or other
expenses incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action, provided, however, that the Purchaser
will be liable in any such case if and only 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 in writing to the Parent by or on behalf of the
Purchaser specifically for use in any such document. Notwithstanding the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action, such Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying Party"), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified Party other
than under this Section 5(c) and shall only relieve it from any liability which
it may have to such Indemnified Party under this Section 5(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the
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defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall pay
all fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the
event of joint liability under the Securities Act in any case in which either
(i) the Purchaser, or any officer, director or controlling person of the
Purchaser, makes a claim for indemnification pursuant to this Section 5 but it
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 this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Parent and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
6. REPRESENTATIONS AND WARRANTIES.
(a) The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act and, except with respect to certain matters which the
Parent has disclosed to the Purchaser on Schedule 12(u) to the Security
Agreement, the Parent has timely filed all proxy statements, reports, schedules,
forms, statements and other documents required to be filed by it under the
Exchange Act. The Parent has filed (i) its Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2004 and (ii) its Quarterly Report on Form 10-QSB
for the fiscal quarter ended March 31, 2005 (collectively, the "SEC Reports").
Each SEC Report was, at the time of its filing, in substantial compliance with
the requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial
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statements of the Parent included in the SEC Reports comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Parent and its
subsidiaries, on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.
(b) The Common Stock is quoted for trading on the NASD Over The
Counter Bulletin Board and satisfies all requirements for the continuation of
such quotation for trading, and the Parent shall do all things necessary for the
continuation of such quotation for trading. The Parent has not received any
notice that its Common Stock will be no longer quoted for trading on the NASD
Over The Counter Bulletin Board (except for prior notices which have been fully
remedied) or that the Common Stock does not meet all requirements for the
continuation of such quotation for trading.
(c) Neither the Parent, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security (other than a
concurrent offering to the Purchaser under a Securities Purchase Agreement
between the Parent and the Purchaser dated as of the date hereof under
circumstances that would cause the offering of the Securities pursuant to the
Security Agreement to be integrated with prior offerings by the Parent for
purposes of the Securities Act which would prevent the Parent from selling the
Common Stock pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Parent or any of
its affiliates or subsidiaries take any action or steps that would cause the
offering of the Common Stock to be integrated with other offerings (other than
such concurrent offering to the Purchaser).
(d) The Warrants, the Options, the Notes and the shares of Common
Stock which the Purchaser may acquire pursuant to the Warrants, the Options and
the Notes are all restricted securities under the Securities Act as of the date
of this Agreement. The Parent will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Registrable Securities at
such time as such Registrable Securities are registered for public sale or an
exemption from registration is available, except as required by federal or state
securities laws.
(e) The Parent understands the nature of the Registrable Securities
issuable upon the conversion of each Note, the exercise of each Warrant and the
exercise of each Option and recognizes that the issuance of such Registrable
Securities may have a potential dilutive effect. The Parent specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Parent and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Parent.
(f) Except for agreements made in the ordinary course of business,
there is no agreement that has not been filed with the Commission as an exhibit
to a registration statement
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or to a form required to be filed by the Parent under the Exchange Act, the
breach of which could reasonably be expected to have a material and adverse
effect on the Parent and its subsidiaries, or would prohibit or otherwise
interfere with the ability of the Parent to enter into and perform any of its
obligations under this Agreement in any material respect.
(g) The Parent will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of each
Note, exercise of the Warrants and exercise of the Options.
7. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Parent or by a Holder,
of any of their respective obligations under this Agreement, each Holder or the
Parent, as the case may be, in addition to being entitled to exercise all rights
granted by law and under this Agreement, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as and to the extent set
forth on Schedule 7(b) hereto, neither the Parent nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Parent in any Registration Statement other than the
Registrable Securities, and the Parent shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Parent has not previously entered
into any agreement granting any registration rights with respect to any of its
securities to any Person that have not been fully satisfied.
(c) COMPLIANCE. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to any
Registration Statement.
(d) DISCONTINUED DISPOSITION. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Parent of
the occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Parent that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Parent may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Parent whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Parent shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the
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Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) the receipt by the Parent of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of any
event or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(e) PIGGY-BACK REGISTRATIONS. If at any time during any
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities required to be covered during such
Effectiveness Period and the Parent shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Parent shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder shall so request in writing, the Parent shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, to the extent the Parent may do so without
violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders
of registration rights and subject to obtaining any required consent of any
selling stockholder(s) to such inclusion under such registration statement.
(f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Parent
and the Holders of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(g) NOTICES. Any notice or request hereunder may be given to the
Parent or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under this
Section 7(g). Any notice or request hereunder shall be given by registered or
certified mail, return receipt requested, hand delivery, overnight mail, Federal
Express or other national overnight next day carrier (collectively, "Courier")
or telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those
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by mail or overnight mail, deemed to have been given three (3) business days
after the date when deposited in the mail or with the overnight mail carrier, in
the case of a Courier, the next business day following timely delivery of the
package with the Courier, and, in the case of a telecopy, when confirmed. The
address for such notices and communications shall be as follows:
If to the Parent: Naturade, Inc.
00000 Xxxxxx Xxxx, #000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx,
LLP
00 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to a Purchaser: To the address set forth under
such Purchaser name on the
signature pages hereto.
If to any other Person who is
then the registered Holder: To the address of such Holder as
it appears in the stock transfer
books of the Parent
or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) by such Person.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Parent may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Notes and the Securities
Purchase Agreement.
(i) EXECUTION AND 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.
11
(j) GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Parent hereby
consents and agrees that the state or federal courts located in the County of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Parent, on the one hand, and the Purchaser,
on the other hand, pertaining to this Agreement or to any matter arising out of
or related to this Agreement; provided, that the Purchaser and the Parent
acknowledge that any appeals from those courts may have to be heard by a court
located outside of the County of New York, State of New York, and further
provided, that nothing in this Agreement shall be deemed or operate to preclude
the Purchaser from bringing a Proceeding in any other jurisdiction to collect
the obligations, to realize on the Collateral or any other security for the
obligations, or to enforce a judgment or other court order in favor of the
Purchaser. The Parent expressly submits and consents in advance to such
jurisdiction in any Proceeding commenced in any such court, and the Parent
hereby waives any objection which it may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens. The Parent hereby waives
personal service of the summons, complaint and other process issued in any such
Proceeding and agrees that service of such summons, complaint and other process
may be made by registered or certified mail addressed to the Parent at the
address set forth in Section 7(g) and that service so made shall be deemed
completed upon the earlier of the Parent's actual receipt thereof or three (3)
days after deposit in the U.S. mails, proper postage prepaid. The parties hereto
desire that their disputes be resolved by a judge applying such applicable laws.
Therefore, to achieve the best combination of the benefits of the judicial
system and of arbitration, the parties hereto waive all rights to trial by jury
in any Proceeding brought to resolve any dispute, whether arising in contract,
tort, or otherwise between the Purchaser and/or the Parent arising out of,
connected with, related or incidental to the relationship established between
then in connection with this Agreement. If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement, the Security Agreement
or any other Ancillary Agreement, then the prevailing party in such Proceeding
shall be reimbursed by the other party for its reasonable attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(k) CUMULATIVE REMEDIES. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) 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 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.
12
(m) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank; signature page follows]
13
IN WITNESS WHEREOF, the parties have executed this Note Registration
Rights Agreement as of the date first written above.
NATURADE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: CFO
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxx Grin
Name: Xxxxx Grin
Title: Director
Address for Notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
14
EXHIBIT 10.6
EXHIBIT A
____________, 200___
[Continental Stock Transfer
& Trust Parent
Two Broadway
New York, New York 10004
Attn: Xxxxxxx Xxxxxxxxx]
Re: Naturade, Inc. Corporation Registration Statement on Form [S-3]
Ladies and Gentlemen:
As counsel to Naturade, Inc., a Delaware corporation (the "Parent"), we
have been requested to render our opinion to you in connection with the resale
by the individuals or entitles listed on Schedule A attached hereto (the
"Selling Stockholders"), of an aggregate of __________ shares (the "Shares") of
the Parent's Common Stock.
A Registration Statement on Form [S-3] under the Securities Act of 1933,
as amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.
Very truly yours,
[Parent counsel]
EXHIBIT 10.6
SCHEDULE A TO EXHIBIT A
Shares
Selling Stockholder R/N/O Being Offered
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