REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS REGISTRATION RIGHTS AGREEMENT,
dated as of August 8, 2008 (this “Agreement”),
is by and between Celsius Holdings, Inc., a Nevada corporation (the “Company”),
and CDS VENTURES OF SOUTH FLORIDA, LLC, a Florida limited liability company
(“Investor”).
The Company has agreed, on the terms
and subject to the conditions set forth in the Securities Purchase Agreement,
dated as of the date hereof (the “Securities
Purchase Agreement”), between the Company and Investor, to issue and sell
to Investor shares of the Company’s Series A Convertible Preferred Stock (the
“Series A
Preferred Stock”), which are convertible into shares of the Company’s
common stock, par value $.001 per share (“Common
Stock”).
In order to induce Investor to enter
into the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights with respect to the resale of the shares of Common
Stock that are issuable to Investor under the Securities Purchase Agreement or
upon the conversion or maturity date of the Series A Preferred
Stock.
In consideration of Investor entering
into the Securities Purchase Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1.
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“Common
Stock” has the meaning set forth in the recitals
to this Agreement.
“Company”
has the meaning set forth in the preamble
to this Agreement.
“Conversion
Price” has the meaning given to such term in the
Certificate.
“Effective
Date” means the date on which the Registration Statement is declared
effective by the Commission.
“Filing
Date” means the date on which the Registration Statement is filed with
the Commission.
“Filing
Deadline” means thirty (30) days from the Closing Date.
“Holder”
means any Person owning or having the right to acquire any Registrable
Securities.
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“Investor”
has the meaning set forth in the preamble
to this Agreement.
“Market
Price” has the meaning given to such term in the Certificate of
Designation.
“Registrable
Securities” means (i) all of the shares of Common Stock (x) held by the
Holder, (y) that are issuable to the Holder under the Securities Purchase
Agreement, and (z) that are issuable to the Holder upon the conversion or
maturity date of the Series A Preferred Stock, and (ii) all shares of capital
stock issued or issuable from time to time (with any adjustments) in replacement
of, in exchange for or otherwise in respect of such shares of Common
Stock.
“Registration
Deadline” means hundred eighty (180) days after the Filing
Date.
“Registration
Default Payment Amount” means one percent (1.0%) of that part of the
Purchase Price attributable to the Series A Preferred Stock.
“Registration
Period” has the meaning set forth in Section
2(f) of this Agreement.
“Registration
Statement” means a registration statement or statements prepared in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act (“Rule
415”) or any successor rule providing for the offering of securities on a
continuous or delayed basis.
“Securities
Purchase Agreement” has the meaning set forth in the recitals
to this Agreement.
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In addition to performing its
obligations hereunder, including, without limitation, those pursuant to Section 2
above, the Company shall, with respect to each Registration
Statement:
(a) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the provisions of the
Securities Act or to maintain the effectiveness of such Registration Statement
during the Registration Period, or as may be reasonably requested by a Holder in
order to incorporate information concerning such Holder or such Holder’s
intended method of distribution;
(b) as
soon as practicable following the Closing, take all steps necessary and
otherwise use its best efforts to secure the listing on the Principal Market of
the Registrable Securities, and at any Holder’s request, provide such Holder
with reasonable evidence thereof;
(c) so
long as a Registration Statement is effective covering the resale of the
applicable Registrable Securities owned by a Holder, furnish to each Holder such
number of copies of the prospectus included in such Registration Statement,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such Holder may reasonably request
in order to facilitate the disposition of such Holder’s Registrable
Securities;
(d) use
commercially reasonable efforts to register or qualify the Registrable
Securities under the securities or “blue sky” laws of such jurisdictions within
the United States as shall be reasonably requested from time to time by a
Holder, and do any and all other acts or things which may reasonably be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such jurisdiction;
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(e) notify
each Holder immediately after becoming aware of the occurrence of any event (but
shall not, without the prior written consent of such Holder, disclose to such
Holder any facts or circumstances constituting material non-public information)
as a result of which the prospectus included in such Registration Statement, as
then in effect, contains an untrue statement of material fact or omits 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, and as promptly as practicable prepare and file with the
Commission and furnish to each Holder a reasonable number of copies of a
supplement or an amendment to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit 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;
(f) use
commercially reasonable efforts to prevent the issuance of any stop order or
other order suspending the effectiveness of such Registration Statement and, if
such an order is issued, to use commercially reasonable efforts to obtain the
withdrawal thereof at the earliest possible time and to notify each Holder in
writing of the issuance of such order and the resolution thereof;
(g) furnish
to each Holder, on the date that such Registration Statement, or any successor
registration statement, becomes effective, a letter, dated such date, signed by
outside counsel to the Company and addressed to such Holder, confirming such
effectiveness and, to the knowledge of such counsel, the absence of
any stop order;
(h) permit
counsel for each Holder to review such Registration Statement and all amendments
and supplements thereto, and any comments made by the staff of the Commission
and the Company’s responses thereto, within three (3) Business Days prior to the
filing thereof with the Commission (or, in the case of comments made by the
staff of the Commission, within a reasonable period of time following the
receipt thereof by the Company); and
(i) subject
to Section
2(f), in the event that, at any time, the number of shares available
under the Registration Statement is insufficient to cover the sum of (i) the
shares already owned by the Investor, 11,184,016, plus (ii) one hundred twenty
five percent (125%) of the number of shares of Common Stock that would then be
issuable if all of the Series A Preferred Stock were converted at the Conversion
Price then in effect, the Company shall promptly amend such Registration
Statement or file a new registration statement, in any event as soon as
practicable, but not later than the tenth (10th)
business day following notice from a Holder of the occurrence of such event, so
that such Registration Statement or such new registration statement, or both,
covers no less than the sum of (i) the shares of Common Stock issued under the
Securities Purchase Agreement at Closing, plus (ii) one hundred twenty
five percent (125%) of the number of shares of Common Stock that would then be
issuable if all of the Series A Preferred Stock were converted at the Conversion
Price then in effect. The Company shall use its best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. Any Registration Statement filed
pursuant to this Section
3(i) shall state that, to the extent permitted by Rule 416 under the
Securities Act, such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become issuable in order to
prevent dilution resulting from stock splits, stock dividends or similar events.
Unless and until such amendment or new Registration Statement becomes effective,
each Holder shall have the rights described in Section
2(c).
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In connection with the registration of
Registrable Securities pursuant to a Registration Statement, each Holder
shall:
(a) within
three (3) Business Days after receipt of written request from the Company,
furnish to the Company in writing such information regarding itself and the
intended method of disposition of such Registrable Securities as the Company
shall reasonably request in order to effect the registration
thereof;
(b) upon
receipt of any notice from the Company of the happening of any event of the kind
described in Sections 3(e)
or 3(f),
immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until the filing of an
amendment or supplement as described in such Section 3(e)
or withdrawal of the stop order referred to in such Section
3(f), and use commercially reasonable efforts to maintain the
confidentiality of such notice and its contents;
(c) to
the extent required by applicable law, deliver a prospectus to the purchaser of
such Registrable Securities;
(d) promptly
notify the Company when he has sold all of the Registrable Securities
beneficially owned by him; and
(e) notify
the Company in the event that any information supplied by such Holder in writing
for inclusion in such Registration Statement or related prospectus contains an
untrue statement of material fact or omits to state a material fact required to
be stated therein or necessary to make such information not misleading in light
of the circumstances then existing.
In the event that any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) The
Company shall indemnify and hold harmless each Holder, the officers, directors,
employees, agents and representatives of such Holder, and each person, if any,
who controls such Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including
reasonable legal expenses or other expenses reasonably incurred in connection
with investigating or defending same, “Losses”),
insofar as any such Losses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in such
Registration Statement under which such Registrable Securities were registered,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or (ii) the omission or alleged omission
to state therein 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. Subject to the provisions of Section
5(c), the Company will reimburse such Holder, and each such officer,
director, employee, agent, representative or controlling person, for any
reasonable legal expenses or other out-of-pocket expenses (promptly as such
expenses are incurred) by any such entity or person in connection with
investigating or defending any Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any Loss if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be obligated to
indemnify any person for any Loss to the extent that such Loss arises out of or
is based upon (i) any omission to state a material fact required to be stated
therein or necessary to make statements therein not misleading that conforms in
all material respects to written information furnished by such person expressly
for use in such Registration Statement or (ii) a failure of such person to
deliver or cause to be delivered the final prospectus contained in the
Registration Statement and made available by the Company, if such delivery is
required by applicable law.
(b) Each
Holder who is named in such Registration Statement as a selling shareholder,
acting severally and not jointly, shall indemnify and hold harmless the Company,
the officers, directors, employees, agents and representatives of the Company,
and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any Losses insofar as any such
Losses arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact stated therein or any omission to state a material
fact required to be stated therein or necessary to make statements therein not
misleading that conforms in all material respects to written information
furnished by such person expressly for use in such Registration
Statement. Subject to the provisions of Section
5(c), such Holder will reimburse any reasonable legal or other expenses
(promptly as such expenses are incurred)
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by the
Company and any such officer, director, employee, agent, representative, or
controlling person, in connection with investigating or defending any such Loss;
provided, however, that
the foregoing indemnity shall not apply to amounts paid in settlement of any
such Loss if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld); and provided, further, that, in
no event shall any indemnity under this Section
5(b) exceed the amount of the net proceeds resulting from the sale of
Registrable Securities by such Holder under such Registration
Statement.
(c) Promptly
after receipt by an indemnified party under this Section 5
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section 5,
promptly deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in and to
assume the defense thereof with counsel selected by the indemnifying party and
reasonably acceptable to the indemnified party; provided, however, that an
indemnified party shall have the right to retain his or its own counsel, with
the reasonably incurred fees and expenses of such counsel to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate under applicable
standards of professional conduct due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such action or proceeding. The failure by an indemnified
party to notify the indemnifying party within a reasonable time following the
commencement of any action or proceeding of which the indemnified party is
aware, to the extent materially prejudicial to such indemnifying party’s ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 5
with respect to such action or proceeding, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 5
or with respect to any other action or proceeding.
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(d) In
the event that the indemnity provided in Sections 5(a)
or 5(b) is
unavailable or insufficient to hold harmless an indemnified party for any
reason, the Company and each Holder agree, severally and not jointly, to
contribute to the aggregate Losses to which the Company or such Holder (or its
respective officers, directors, employees, agents, representatives or
controlling persons), may be subject in such proportion as is appropriate to
reflect the relative fault of the Company and such Holder in connection with the
statements or omissions which resulted in such Losses; provided, however, that in no
case shall such Holder be responsible for any amount in excess of the net
proceeds resulting from the sale of Registrable Securities under the
Registration Statement. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or by such Holder. The Company
and each Holder agree that it would not be just and equitable if contribution
were determined by pro
rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section
5(d), 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 is not guilty of such fraudulent
misrepresentation. For purposes of this Section 5,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each officer, director, employee, agent or
representative of such Holder shall have the same rights to contribution as such
Holder, and each person who controls the Company within the meaning of either
the Securities Act or the Exchange Act and each officer, director, employee,
agent or representative of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this Section
5(d).
(e) The
obligations of the Company and each Holder under this Section 5
shall survive the completion of any offering or sale of Registrable Securities
pursuant to a Registration Statement under this Agreement, or
otherwise.
With a view to making available to each
Holder the benefits of Rule 144 and any other similar rule or regulation of the
Commission that may at any time permit such Holder to sell securities of the
Company to the public without registration, the Company agrees to furnish to
such Holder, so long as such Holder owns any Registrable Securities, promptly
upon written request (i) a written statement by the Company, if true, that it
has complied with the reporting requirements of Rule 144 and the Exchange Act,
(ii) to the extent not publicly available through the Commission’s XXXXX
database, a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company with the
Commission, and (iii) such other information as may be reasonably requested by
such Holder in connection with such Holder’s compliance with any rule or
regulation of the Commission which permits the selling of any such securities
without registration.
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If to the
Company:
000 XX 0xx Xxx,
Xxxxx X
Xxxxxx Xxxxx, Xxxxxxx
00000
Attn: Chief Executive
Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy (which shall not
constitute notice) to:
Xxxxxx Xxxxxx LLP
0000 Xxxxxx Xxxxx Xxxxxxx,
XX
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax:
(000) 000-0000
and if to
a Holder, to such address for the Holder as provided by such Holder under the
Securities Purchase Agreement, or as shall be designated by the Holder in
writing to the other parties hereto in accordance with this Section
7(c).
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(f) Governing Law and
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed entirely within the State of
Florida. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Palm Beach County,
Florida, for the adjudication of any dispute hereunder or under the other
Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper, and, in furtherance of
such agreement, each party hereby agrees and consents that without limiting
other methods of obtaining jurisdiction, personal jurisdiction over it in any
such action or proceeding may be obtained within or without the jurisdiction of
such court and that any process or notice of motion or other application to any
such court in connection with any such action or proceeding may be served upon
such party by registered mail to or by personal service at the address of such
party provided in accordance with Section 7(c) hereof.
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[Signature
Page to Follow]
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IN WITNESS WHEREOF, the undersigned
have executed this Registration Rights Agreement as of the date first-above
written.
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title: Chief
Executive Officer
CDS
VENTURES OF SOUTH FLORIDA, LLC
By: /s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title: Manager
ADDRESS:
0000 XX
Xxxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxxxx 00000
With
a copy (which shall not constitute notice) to:
Xxxxxx
& Lebensburger
0000
Xxxxxxxx Xxxx
Xxxxx
000
Xxxxx,
Xxxxxxx 00000
Attention: Xxxxxxx
Xxxxxx, Esq.