REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of this ______day
of
___________ 200_____,
is by and between Herborium Group, Inc., a Delaware Corporation (the “Company”),
and the person whose name appears on the signature page attached hereto
(individually a “Holder” and collectively, with the holders of other securities
issued in the Offering (as defined below), the “Holders”).
WHEREAS,
pursuant to a Subscription Agreement the Company has offered (the “Offering”) to
sell up to $500,000 in 10% promissory notes (the “Notes”), convertible into
shares of the Company’s common stock (the “Shares” or the “Common Stock”), each
$50,000 in Notes also includes the issuance of 50,000 shares of Common Stock
and
the issuance of five year warrants to purchase 100,000 shares of Common Stock,
or like security issued in a Qualified Financing or Acquisition, 50,000 at
an
exercise price of $0.025 per share and 50,000 at an exercise price of $0.05
(the
“Warrants” along with the Notes and Common Stock per $50,000 investment, (a
“Unit”)). Through an over-allotment option, the Company may elect to sell up to
an additional 5 Units in the Offering for a total of $250,000;
WHEREAS,
pursuant
to the terms of and in order to induce the Holders to enter into a certain
Subscription Agreement between the Company and the Holder (the “Subscription
Agreement”) to purchase the Units, the Company and each Holder have agreed to
enter into this Agreement setting forth the registration rights to be granted
with respect to the shares of Common Stock issued, or issueable to each holder
upon conversion of the Notes and/or Warrants, issued to each Holder pursuant
to
the Subscription Agreements (the “Registrable Securities”); and
WHEREAS,
it is
intended by the Company and the Holders that this Agreement shall become
effective immediately upon the acquisition by the Holders of the
Units;
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
in
the Subscription Agreement, the Company and the Holder hereby agree as
follows:
1. Registration
Rights
(a)
Piggyback
Registration Rights.
If the
Company at any time proposes to register any of its equity securities under
the
Securities Act of 1933, as amended (the “1933 Act”), for sale to the public,
whether for its own account or for the account of other security holders or
both
(except with respect to registration statements on Forms S-4 or S-8 or another
form not available for registering the Registrable Securities for sale to the
public, a registration statement on Form S-3 to be filed by the Company to
register securities issued in consideration for an acquisition, a registration
statement on Form S-1 covering solely an employee benefit plan or a registration
statement relating to a dividend reinvestment plan), it will give written notice
at such time to each Holder. Upon the written request of each Holder, given
within twenty (20) days after receipt of any such notice by the Company, to
register any of its Registrable Securities (which request shall state the
intended method of disposition thereof), the Company will use its best efforts
to cause the Registrable Securities as to which registration shall have been
so
requested, to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite
to
permit the sale or other disposition by the Holder (in accordance with its
written request); provided
that
nothing herein shall prevent the Company from abandoning or delaying any such
registration at any time. In the event that any registration pursuant to this
Section 1(a) shall be, in whole or in part, an underwritten public offering
of
equity securities, any request by a Holder pursuant to this Section 1(a) to
register Registrable Securities shall specify that such Registrable Securities
are to be included in the underwriting on the same terms and conditions as
the
equity securities otherwise being sold through underwriters under such
registration. The number of shares of Registrable Securities to be included
in
such an underwriting may be reduced (pro rata
among
all persons or entities having registration rights), if and to be the extent
that the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided,
however
that
except in the case of the Company's initial public offering of Common Stock
(in
which the number of shares to be offered on behalf of selling shareholders
may
be reduced to zero) or in the case of an underwritten offering of an equity
security other than Common Stock (in which the number of shares to be offered
on
behalf of selling shareholders may also be reduced to zero), in no event shall
the number of shares to be registered on behalf of selling Holders be less
than
twenty percent (20%) of the aggregate number of shares to be offered in such
underwriting. If the offering covered by this Section 1(a) shall be an
underwritten public offering, the Company shall designate the managing
underwriter of such offering. In the event of any such reduction or cutback
in
the number of Registrable Securities to be registered, or in the event that
the
Company abandons any such registration prior to the effective date thereof,
the
Holders shall continue to maintain the rights provided by this Section 1,
subject to the termination provisions of this Agreement.
(b) Cooperation
with the Company.
The
Holders will cooperate with the Company in all respects in connection with
this
Agreement, including timely supplying all information reasonably requested
by
the Company and executing and returning all documents reasonably requested
in
connection with the registration and sale of the Registrable
Securities.
2. Registration
Procedures.
If and
whenever the Company is required by any of the provisions of this Agreement
to
use its commercially reasonable best efforts to effect the registration of
any
of the Registrable Securities under the 1933 Act, the Company shall (except
as
otherwise provided in this Agreement), as expeditiously as
possible:
(a) prepare
and file with the Securities and Exchange Commission (the “Commission”) a
registration statement and shall use its commercially reasonable best efforts
to
cause such registration statement to become effective and remain effective
until
(i) all the Registrable Securities covered thereby (the “Covered Securities”)
are sold or (ii) all Holders (other than “Affiliates” of the Company, as such
term is defined in Rule 144 under the 0000 Xxx) are eligible to take advantage
of the provisions of Rule 144(k) under the 1933 Act with respect to all the
Registrable Securities (held by persons other than Affiliates) or (iii) two
years from the date on which such registration statement is declared effective,
whichever is earliest;
(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 keep such registration statement effective and to comply with
the
provisions of the 1933 Act with respect to the sale or other disposition of
all
securities covered by such registration statement;
(c) furnish
to each Holder of the Covered Securities such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the 1933 Act, and such other documents, as such Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such Holder;
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(d) use
its
commercially reasonable best efforts to register and qualify the Covered
Securities under such other securities or blue sky laws of such jurisdictions
as
the Holders of a majority of the Covered Securities shall reasonably request,
and do any and all other acts and things which may be necessary or advisable
to
enable such Holders to consummate the public sale or other disposition in such
jurisdictions of the Covered Securities owned by such Holders, except that
the
Company shall not for any such purpose be required to qualify to do business
as
a foreign corporation in any jurisdiction wherein it is not so qualified or
to
file therein any general consent to service of process or to submit itself
to
taxation in any jurisdiction which otherwise does not have the right to tax
the
Company;
(e) use
its
commercially reasonable best efforts to list such securities on any securities
exchange on which any securities of the Company are then listed, if the listing
of such securities is then permitted under the rules of such exchange;
and
(f) notify
each Holder of Covered Securities, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under
the 1933 Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included 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 the light of the circumstances then
existing.
3. Withdrawal
Obligation.
By
including any Covered Securities in any registration statement covered hereby,
each Holder agrees that (x) the Company shall have the right to delay effecting
any registration covered hereby in order to allow the Company to delay
disclosure of sensitive information until such time as the Company is otherwise
required to make such disclosure, and (y) the Holder shall refrain from selling
any Registrable Securities if requested to do so by the Company, provided that
(1) such request shall only be made in order to defer disclosure of sensitive
information until the Company is otherwise required to make such disclosure
and
(2) the Holder is not required to refrain from selling for a period of more
than
thirty (30) days in any ninety (90) day period.
4. Expenses.
All
expenses incurred in any registration of the Holders' Registrable Securities
under this Agreement shall be paid by the Company, including, without
limitation, printing expenses, fees and disbursements of counsel for the
Company, expenses of any audits to which the Company shall agree or which shall
be necessary to comply with governmental requirements in connection with any
such registration, all registration and filing fees for the Holders' Registrable
Securities under federal and State securities laws, and expenses of complying
with the securities or blue sky laws of any jurisdictions pursuant to Section
2(d); provided, however, that the Company shall not be liable for (a) any
discounts or commissions payable to any underwriter; (b) any stock transfer
taxes incurred with respect to Registrable Securities sold on behalf of the
Holder thereof; or (c) the fees and expenses of counsel for any
Holder.
5. Indemnification.
In the
event any Registrable Securities are included in a registration statement
pursuant to this Agreement;
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(a) Company
Indemnity.
(i)
Without limitation of any other indemnity provided to any Holder, either in
connection with the Offering or otherwise, to the extent permitted by law,
the
Company shall indemnify and hold harmless each Holder, the affiliates, counsel,
officers, directors and partners of each Holder, any underwriter (as defined
in
the 0000 Xxx) for such Holder, and each person, if any, who controls such Holder
or underwriter (within the meaning of the 1933 Act or the Securities Exchange
Act of 1934 (the “Exchange Act”) (collectively, the “Indemnified Holders”)),
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the 1933 Act, the Exchange Act or other federal
or
state law (collectively, the “Claims”), insofar as such Claims (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”): (A) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (B) the 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 (C) any violation or alleged
violation by the Company of the 1933 Act, the Exchange Act or any state
securities law or any rule or regulation promulgated under the 1933 Act, the
Exchange Act or any state securities law, and the Company shall reimburse each
such Indemnified Holder for any 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 Company shall not be liable
to
any Indemnified Holder in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
statement by or on behalf of any such Indemnified Holder.
(ii)
The
foregoing notwithstanding, the Company shall not be liable to the extent that
any such Claim arises out of or is based upon a Violation or alleged Violation
made in any preliminary prospectus if (A) such Indemnified Holder failed to
send
or deliver a copy of the prospectus with or prior to the delivery of written
confirmation of the sale of Registrable Securities giving rise to such Claim
and
(B) the prospectus would have corrected such untrue statement or
omission.
(iii)
In
addition, the Company shall not be liable to the extent that any such Claim
arises out of or is based upon a Violation or alleged Violation in a prospectus,
(A) if such Violation or alleged Violation is corrected in an amendment or
supplement to such prospectus and (B) having previously been furnished by or
on
behalf of the Company with copies of the prospectus as so amended or
supplemented, such Indemnified Holder thereafter fails to deliver such
prospectus as so amended or supplemented prior to or concurrently with the
sale
to the person who purchased a Registrable Security from such Indemnified Holder
and who is asserting such Claim.
(b) Holder
Indemnity.
Each
Holder shall indemnify and hold harmless the Company, its affiliates, its
counsel, officers, directors, stockholders, representatives and partners, any
underwriter (as defined in the 0000 Xxx) and each person, if any, who controls
the Company or the underwriter (within the meaning of the 1933 Act or the
Exchange Act), against any Claims (joint or several) to which they may become
subject under the 1933 Act, the Exchange Act or any state securities law, and
each such Holder shall reimburse the Company and each such affiliate, counsel,
officer, director, stockholder, representative or partner, underwriter or
controlling person for any legal or other expenses incurred by them in
connection with investigating or defending any such Claim insofar as such Claims
(or actions and respect thereof) arise out of or are based upon (i) written
information provided by or on behalf of such Holder to the Company expressly
for
inclusion in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto
or (ii) any sale by such Holder after receipt from the Company of the notice
described in Section 2(f) hereof and prior to acceptance from the Company of
an
amended or supplemental prospectus; provided, however, that the maximum amount
which may be recovered from each Holder pursuant to the indemnification granted
under clause (i) in this paragraph shall be limited to the amount of proceeds
received by such Holder from the sale of Registrable Securities by such Holder
pursuant to such registration statement.
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(c) Notice;
Right to Defend.
Promptly after receipt by an indemnified party under this Section 5 of notice
of
the commencement of any action (including any governmental action), such
indemnified party shall, if a claim in respect thereof is to be made against
any
indemnifying party under this Section 5, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in and if the indemnifying party agrees in writing
that it will be responsible for any costs, expenses, judgments, damages and
losses incurred by the indemnified party with respect to such claim, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if the indemnified
party reasonably believes that representation of such indemnified party by
the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Agreement only if and to the
extent that such failure is prejudicial to its ability to defend such action,
and 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 Agreement; provided, however, that the indemnifying party shall
not be required to indemnify the indemnified party for the amount of a judgment
in excess of the amount of any previous settlement offer by the plaintiff that
was rejected by the indemnified party over the objection of the indemnifying
party.
If
an
indemnified party notifies an indemnifying party in writing that such
indemnified party elects to employ separate counsel at the expense of the
indemnifying party as permitted by the provisions of the preceding paragraph,
the indemnifying party shall not have the right to assume the defense of such
action or proceeding on behalf of such indemnified party. The foregoing
notwithstanding, the indemnifying party shall not be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time for
such indemnified party and any other indemnified parties (which firm shall
be
designated in writing by such indemnified parties) in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances.
Any
indemnifying party shall not be liable for any settlement of any such action
or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with its written consent, or if there
be a
final judgment for the plaintiff in any such action or proceeding, the
indemnifying party agrees to indemnify and hold harmless such indemnified
parties from and against any loss or liability by reason of such settlement
or
judgment.
(d) Contribution.
If the
indemnification provided for in this Agreement is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any
Claim
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault
of
the indemnifying party on the one hand and of the indemnified party on the
other
hand in connection with the statements or omissions which resulted in such
loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state
a
material fact relates to information supplied by or on behalf of the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount any Holder
shall be obligated to contribute pursuant to this Agreement (other than as
described in Section 5(b)(ii) hereof) shall be limited to an amount equal to
the
proceeds to such Holder of the Registrable Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which the Holder has otherwise been required
to pay in respect of such Claim or any substantially similar Claim arising
from
the sale of such Registrable Securities).
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(e) Survival
of Indemnity.
The
indemnification provided by this Agreement shall be a continuing right to
indemnification and shall survive the registration and sale of any Registrable
Securities by any person entitled to indemnification hereunder and the
expiration or termination of this Agreement. Any purported assignment in
violation of this provision shall be null and void.
6. Assignment
of Registration Rights.
The
rights of the Holders under this Agreement, including the rights to cause the
Company to register Registrable Securities, may not be assigned without the
written prior consent of the Company.
7. Lock-up.
The
Holder agrees that in connection with the Company’s initial public offering, if
any, the Holder shall execute such lock-up agreement as shall be proposed by
the
Company’s managing underwriter, provided that such lock-up agreement is no more
restrictive than the lock-up agreement executed generally by the Company’s
directors and executive officers.
8. Notices.
(a) All
communications under this Agreement shall be in writing and shall be mailed
by
first class mail, postage prepaid, or telecopied or telexed with confirmation
of
receipt or delivered by hand or by overnight delivery service, (i) if to the
Company at Herborium Group, Inc., 0000 Xxxx 00xx
Xxxxxx,
Xxxxxxxx, XX 00000 Attention: Xx. Xxxxx Xxxxxxxxx, CEO, or at such other address
as it may have furnished in writing to the Holders of Registrable Securities
at
the time outstanding, or (ii) if to any Holder of any Registrable Securities,
to
the address of such Holder as it appears in the stock or warrant ledger of
the
Company.
(b) Any
notice so addressed, when mailed by registered or certified mail shall be deemed
to be given five days after so mailed, when telecopied or telexed shall be
deemed to be given when transmitted if transmitted during business hours on
a
business day or on the next succeeding business day if transmitted other than
during business hours on a business day, or when delivered by hand or overnight
shall be deemed to be given when delivered.
9. Successors
and Assigns.
Except
as otherwise expressly provided herein, this Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Company and each of the Holders.
10. Amendment
and Waiver.
This
Agreement may be amended, and the observance of any term of this Agreement
may
be waived, but only with the written consent of the Company and the Holders
of
securities representing a majority of the Registrable Securities; provided,
however, that no such amendment or waiver shall take away any registration
right
of any Holder of Registrable Securities or reduce the amount of reimbursable
costs to any Holder of Registrable Securities in connection with any
registration hereunder without the consent of such Holder; further provided,
however, that without the consent of any other Holder of Registrable Securities,
any Holder may from time to time enter into one or more agreements amending,
modifying or waiving the provisions of this Agreement if such action does not
adversely affect the rights or interest of any other Holder of Registrable
Securities. No delay on the part of any party in the exercise of any right,
power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise by any party of any right, power or remedy preclude any other
or further exercise thereof, or the exercise of any other right, power or
remedy.
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11. Counterparts.
One or
more counterparts of this Agreement may be signed by the parties, each of which
shall be an original but all of which together shall constitute one and the
same
instrument.
12. Governing
Law.
This
Agreement shall be construed in accordance with and governed by the internal
laws of the State of New York, without giving effect to conflicts of law
principles.
13. Invalidity
of Provisions.
If any
provision of this Agreement is or becomes invalid, illegal or unenforceable
in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
14. Pronouns;
Headings.
Unless
the context otherwise requires, all personal pronouns used in this Agreement,
whether in the masculine, feminine or neuter gender, shall include all other
genders, and if in the singular shall include the plural, and in the plural,
the
singular. The headings in this Agreement are for convenience of reference only
and shall not be deemed to alter or affect the meaning or interpretation of
any
provisions hereof.
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of first provided above
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Herborium
Group, Inc.
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By:
Xx. Xxxxx Xxxxxxxxx
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[Counterpart
Signature Page to Follow]
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Counterpart
Signature Page to Registration Rights Agreement
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HOLDER:
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By:
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Print
Name and Title
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Principal
Residence or Executive Office
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