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FORM OF REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of July
23, 1997, by and among NATURAL HEALTH TRENDS CORP., a Florida corporation (the
"Company"), GLOBAL HEALTH ALTERNATIVES, INC., a Delaware corporation ("GHA"),
and the stockholders of GHA listed on Schedule "A" hereto, as such schedule may
be amended from time to time, each a "Holder" and collectively the "Holders"
acting through their duly appointed attorney-in-fact (the "Attorney"). As used
in this Agreement, the term "Holder" means an original Holder and any transferee
thereof (including any successive transferee) who at the time of determination
holds any Registrable Securities (as defined below).
WHEREAS, pursuant to an Amended and Restated Agreement and Plan of
Reorganization, dated as of July 23, 1997, by and among the Company, GHA, and
the Holders (the "Acquisition Agreement"), up to 5,800,000 shares (the "Firm
Shares") of common stock, par value $.001 per share, of the Company ("Common
Stock"), have been, or, upon the occurrence of one or more Additional Closings,
will be distributed to the Holders;
WHEREAS, pursuant to the Acquisition Agreement, the Company may be
obligated to distribute certain additional shares in two tranches (the "First
Contingent Shares" and "Second Contingent Shares," respectively, and
collectively the "Contingent Shares") of Common Stock to the Holders; and
WHEREAS, as a condition to the closing of the transactions
contemplated by the Acquisition Agreement, the Firm Shares and any Contingent
Shares distributed to the Holders shall be subject to this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms; Effectiveness of Registration Rights.
1.1 Defined Terms. Capitalized terms used and not defined herein
shall have the respective meanings ascribed to them in the Acquisition
Agreement. In addition, the following terms shall have the following meanings:
"Affiliate" has the meaning attributed thereto under Rule 405 of
the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Governmental Body" means any federal, state, municipal or other
governmental body, department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Initiating Holders" means any Holders who in the aggregate, are
holders of at least 50% of the outstanding Registrable Securities then owned in
the aggregate by the Holders.
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"Inspectors" has the meaning attributed thereto in Section 5.
"Other Holders" means all Holders other than the Initiating
Holders.
"Other Securities" has the meaning attributed thereto in Section
3.1.
"Person" means any individual, corporation, sole proprietorship,
partnership, joint venture, association, trust, unincorporated organization,
association, institution, public benefit corporation, business, Governmental
Body or other legal entity.
"Records" has the meaning attributed thereto in Section 5.
"Registrable Securities" means (i) the Firm Shares and any
Contingent Shares issued pursuant to the terms of the Acquisition Agreement and
(ii) any securities of the Company distributed with respect to the aforesaid
shares of its Common Stock; provided, that any such shares shall cease to be
Registrable Securities when sold or otherwise transferred by any Holder pursuant
to (a) an effective registration statement filed by the Company under the
Securities Act or (b) Rule 144 (or any similar provision then in force) under
the Securities Act.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration and other
requirements set forth in this Registration Rights Agreement including, without
limitation, the following: (i) the fees, disbursements and expenses of all
counsel to the Company and all accountants in connection with the registration
statement, any preliminary prospectus or final prospectus, any other offering
documents and amendments and supplements thereto and the mailing and delivery of
copies thereof to underwriters and dealers; (ii) all expenses in connection with
the preparation, printing and filing of the registration statement, any
preliminary prospectus or final prospectus, any other offering document and
amendments and supplements thereto and the mailing and delivery of copies
thereof to underwriters and dealers; (iii) the cost of printing or producing any
agreement(s) among underwriters, underwriting agreement(s) and blue sky or legal
investment memoranda, any selling agreements and any other documents in
connection with the offering, sale or delivery of the Registrable Securities to
be disposed of; (iv) all expenses in connection with the qualification of the
Registrable Securities to be disposed of for offering and sale under state
securities laws, including the fees and disbursements of counsel for the
underwriters in connection with such qualification and in connection with any
blue sky and legal investment surveys; (v) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Registrable Securities to be disposed of; (vi) the
cost and charges of any transfer agent or registrar in connection with the
registration of exchange or transfer of the Registrable Securities to be
disposed of; and (vii) all stock exchange listing fees.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Total Number of Includible Securities" has the meaning attributed
thereto in Section 3.1(b).
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1.2 Effectiveness of Registration Rights. The registration rights
pursuant to Sections 2 and 3 hereof shall become effective on the date upon
which shares of Common Stock are distributed to the Original Holder pursuant to
the Acquisition Agreement and continue so long as any Holder shall hold
Registrable Securities.
1.3 Registration Not Required. Notwithstanding anything herein to
the contrary, the Company shall not be obligated to effect any registration
pursuant to Section 2.1 or Section 3.1 hereof or to keep effective any
registration statement prepared and filed pursuant to Section 2.1 or Section 3.1
hereof, if, in the written opinion of counsel to the Company who shall be
reasonably satisfactory to the Holder or Holders intending to participate in
such registration and which opinion shall be concurred in by counsel to such
Holder or Holders, the intended method or methods of disposition of any
Registrable Securities by such Holder or Holders may be effected without
registration under the Securities Act and without restriction as to subsequent
trading.
1.4 Consents and Approvals. Whenever any consent or approval is
required under this Agreement by the Holders or a group of Holders, such consent
or approval will be deemed given if rendered by the Holders of a majority of the
Registrable Securities requested to be included in the registration relating to
such consent or approval.
Section 2. Shelf Registration
2.1 Shelf Registration. The Company shall cause to be filed with
the Commission no later than nine (9) months after the Closing Date, a shelf
registration statement pursuant to Rule 415 under the Securities Act relating to
the Firm Shares, and no later than three (3) months after the issuance of any
Contingent Shares (each a "Shelf Registration Statement"), and shall use its
best efforts to cause such Shelf Registration Statement to become effective as
soon thereafter as practicable. The Company shall use its best efforts to keep
such Shelf Registration Statement continuously effective, supplemented and
amended to the extent necessary to ensure that it is available for resales of
the Registered Securities and to ensure that it conforms with the requirements
of this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, until the earlier of (i) the sale
by the Holders of all shares of Registrable Securities relating to such Shelf
Registration Statement or (ii) two years after the Closing Date or the date of
issuance of any Contingent Shares, as the case may be.
2.2 Registration Expenses. The Company shall pay or cause to be
paid all Registration Expenses in connection with the shelf registration
pursuant to this Section 2; provided that with respect to any such registration,
each Holder shall bear any transfer taxes applicable to its Registrable
Securities registered thereunder and its pro rata share of all underwriting
fees, commissions, discounts or other compensation in respect of such
Registrable Securities and provided further that in no event shall any Holder be
required to pay any internal costs of the Company.
Section 3. Piggyback Registration.
3.1 Notice and Registration. If the Company proposes, for its own
account or for the account of others, to register any of its voting securities
("Other Securities") for public sale under the Securities Act, on a form and in
a manner which would permit registration
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of Registrable Securities for sale to the public under the Securities Act, it
will give prompt written notice to each Holder of its intention to do so, and
upon the written request of any Holder, delivered to the Company within 15
business days after the giving of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by each Holder, and the
intended method of disposition thereof), the Company will use its best efforts
to effect, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by each Holder, to the extent required
to permit the disposition (in accordance with the intended method or methods
thereof as aforesaid) of the Registrable Securities so to be registered,
provided that:
(a) if, at any time after giving such written notice
of its intention to register any Other Securities and
prior to the effective date of the registration statement
filed in connection with such registration, the Company
shall determine for any reason not to register the Other
Securities, the Company may, at its election, give
written notice of such determination to each Holder, and
thereupon the Company shall be relieved of its
obligations to register such Registrable Securities in
connection with the registration of such Other Securities
(but not from its obligation to pay Registration Expenses
to the extent incurred in connection therewith as
provided in Section 3.2), without prejudice, however, to
the rights, if any, of the Holders immediately to request
that such registration be effected as a registration
under Section 2;
(b) the Company will not be required to effect any
registration of Registrable Securities under this Section
3 if, and to the extent that, the underwriters (or any
managing underwriter) or the placement agent in
connection with a private placement of the Company's
securities, shall advise the Company in writing that, in
their reasonable opinion, inclusion of such number of
shares of Registrable Securities will adversely affect
the price or distribution of the securities to be offered
pursuant to such registration. Such advice shall include
a statement as to such person's opinion as to the number
of shares which may be included without adversely
affecting the price or distribution of the securities
(such total number of shares which such advice states may
be so included being the "Total Number of Includible
Securities"). The Company shall promptly furnish each
Holder with a copy of such written advice, and in such
event the number of shares which such person believes may
be sold shall first be allocated to the Company, next to
any shares proposed to be included in the registration
for the account of ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
any of their Affiliates, and then the remaining number of
shares shall then be allocated among the Holders in
proportion to the number of shares of Registrable
Securities each first proposed for inclusion in the
registration.
(c) The Company shall not be required to effect any
registration of Registrable Securities under this Section
3 incidental to the registration of any of its securities
in connection with mergers, acquisitions, exchange
offers, dividend reinvestment plans, stock option or
other employee
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benefit plans, any registration of its securities which
are being registered in connection with a private
offering of $2 million or less or the registration of its
securities in connection with a private offering of
$2,200,000 of convertible preferred stock in June 1997.
No registration of Registrable Securities effected under this Section 3 shall
relieve the Company of its obligation, if any, effect the registration of
Registrable Securities pursuant to Section 2.
3.2 Registration Expenses. The Company will pay all Registration
Expenses in connection with any registration pursuant to this Section 3;
provided that with respect to any such registration each Holder shall bear any
transfer taxes applicable to its Registrable Securities registered thereunder,
its pro rata share of all underwriting fees, commissions, discounts or other
compensation in respect of such Registrable Securities; and provided, further,
that in no event shall any Holder be required to pay any internal costs of the
Company.
Section 4. Registration Procedures.
4.1 Registration and Qualification.
(a) If and whenever the Company is required to use its best efforts
to effect the registration of any Registrable Securities under the Securities
Act as provided in Sections 2 and 3, the Company will promptly as is
practicable:
(i) prepare, file and use its best efforts to cause
to become effective a registration statement under the
Securities Act regarding the Registrable Securities to be
offered;
(ii) 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 Securities Act
with respect to the disposition of all Registrable
Securities until the earlier of (a) the expiration of two
years from the effective date thereof or (b) until such
time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of
disposition by the Holders, as set forth in such
registration statement;
(iii) shall, prior to filing any registration
statement or prospectus or any amendments or supplements
thereto (including any documents incorporated by
reference in any registration statement after the initial
filing of such registration statement) in which
Registrable Securities are included pursuant to this
Agreement, furnish to counsel for any managing
underwriter for any underwritten public offering of
Registrable Securities and to counsel engaged by the
Holders of a majority in interest of the Registrable
Securities included in such registration statement,
copies of all such documents proposed to be filed with
the SEC, which documents shall be subject to the
reasonable review of such
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counsel, and, if requested by such counsel, the insertion
of material which in their judgment should be included
therein (subject, however, to the approval of counsel to
the Company). Notwithstanding the foregoing, in the case
of periodic reports of the Company which are incorporated
by reference into any registration statement in which
Registrable Securities are included pursuant to this
Agreement after the effective date of such registration
statement, the Company shall only be required to furnish
such periodic reports to counsel engaged by the Holders
of a majority in interest of the Registrable Securities
included in such registration statement, if any,
concurrently with the filing of such periodic reports;
(iv) furnish to the Holders participating in the
registration and to any underwriter of such Registrable
Securities such number of conformed copies of such
registration statement and of each such amendment and
supplement thereto (in the case of the Holder or any
managing underwriter, including all exhibits), such
number of copies of the prospectus included in such
registration statement (including each preliminary
prospectus and any summary prospectus) or filed under the
Securities Act, in conformity with the requirements of
the Securities Act, such documents as may be incorporated
by reference in such registration statement, or
prospectus, and such other documents, as the Holders or
such underwriter may reasonably request;
(v) use its best efforts to register or qualify all
Registrable Securities covered by such registration
statement under such other securities or blue sky laws of
such jurisdictions as the Holders participating in the
registration or any underwriter of such Registrable
Securities shall reasonably request in writing, and do
any and all other acts and things which may be necessary
or advisable to enable the Holders participating in the
registration or any underwriter to consummate the
disposition in such jurisdictions of its Registrable
Securities covered by such registration statement, except
that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process
in any such jurisdiction;
(vi) in the case of any underwritten offering,
furnish to the Holders participating in the registration
and the underwriters, if any, addressed to them, (A) an
opinion of counsel for the Company dated the date of the
closing under the underwriting agreement relating to any
underwritten offering, in form and substance satisfactory
to such Holders, to the effect that (a) a registration
statement covering the Registrable Securities has been
filed with the Commission under the Securities Act and
has been made effective by order of the Commission, (b)
such registration statement and the prospectus contained
therein comply with all material respects with the
requirements of the Securities Act, and nothing has come
to said counsel's attention which would cause it to
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believe that either such registration statement or the
prospectus contains any 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 in light of the circumstances under which they
were made not misleading, (c) a prospectus meeting the
requirements of the Securities Act is available for
delivery, (d) no stop order has been issued by the
Commission suspending the effectiveness of such
registration statement and, to the best of counsel's
knowledge, no proceedings for the issuance of such a stop
order are threatened or contemplated, and (e) there has
been compliance with the applicable provisions of the
securities or blue sky laws of each jurisdiction in which
the Company shall be required pursuant to clause (v) of
this sentence to register or qualify such Registrable
Securities, assuming the accuracy and completeness of the
information furnished to such counsel with respect to
each filing relating to such laws, and (B) a comfort
letter signed by the independent public accountants who
have certified the Company's financial statements
included in such registration statement, with respect to
events subsequent to the date of such financial
statement, as are customarily covered in accountants'
letters, delivered to underwriters in underwritten public
offerings of securities and such other matters as the
Holders may reasonably request;
(vii) notify the Holders participating in the
registration at any time when a prospectus relating to a
registration pursuant to Section 2 or 3 is or was
required to be delivered under the Securities Act, of the
happening of any event as a result of which the
prospectus included in such registration statement, as
then in effect, includes or included an untrue statement
of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary,
in the light of the circumstances then existing, to make
the statements therein not misleading, and, if necessary
in the reasonable judgment of counsel for the Company,
the Company will prepare and furnish to such Holder a
reasonable number of copies of a supplement of or an
amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary,
[in light of the circumstances then existing, to make the
statements therein not misleading; and
(viii) notify each Holder of the Registrable
Securities included in any registration statement
pursuant to this Agreement of any stop order issued or,
to the knowledge of the Company, threatened by the
Commission in connection with such registration statement
and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered;
(ix) if requested by the managing underwriter or
underwriters or by any Holder of the Registrable
Securities included in any Registration Statement,
subject to the approval of counsel to the Company in its
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reasonable judgment, promptly incorporate in a prospectus
supplement or post-effective amendment such information
as the managing underwriter or underwriters or such
Holder or Holders reasonably shall furnish to the Company
in writing and request to be included therein, including,
without limitation, with respect to the number of
Registrable Securities being sold by such Holder or
Holders to such underwriter or underwriters, the purchase
price being paid therefor by such underwriter or
underwriters and with respect to any other terms of the
underwritten offering of the Registrable Securities to be
sold in such offering; and make all required filings of
such prospectus supplement or post-effective amendment as
soon as possible after being notified of the matters to
be incorporated in such prospectus supplement or
post-effective amendment;
(x) cooperate with the Holders of the Registrable
Securities covered by any registration statement pursuant
to this Agreement and the managing underwriter or
underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing
Registrable Securities to be sold under such registration
statement, in such denominations and registered in such
names as the managing underwriter or underwriters, if
any, or such Holders may request; and
(xi) use reasonable efforts to do any and all other
customary acts the Holders participating in the
registration may reasonably request and which are
customary for a registration of equity securities.
The Company may require each Holder participating in a registration to furnish
such information regarding such Holder and the distribution of such securities
as the Company may from time to time reasonably request in writing and as shall
be required by law or by the Commission in connection with any registration.
(b) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4.1(a)(vi) hereof, each Holder shall use its best efforts to discontinue
forthwith disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until the Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
4.1(a)(vi) hereof.
4.2 Listing of Common Stock. Upon the request of the Holders
participating in a registration in connection with any public offering of the
Common Stock, the Company shall use its best efforts to effect, as promptly as
is practicable, the listing of the Common Stock on any national securities
exchange or the inclusion of the Common Stock in any automated quotations system
on or in which the Company's Common Stock shall then be listed or quoted, if the
listing of such Common Stock is then permitted under the rules of such exchange
or automated quotations system.
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4.3 Underwriting.
(a) If requested by the managing underwriter for any underwritten
offering of Registrable Securities pursuant to a registration requested
hereunder, the Company will enter into an underwriting agreement with the
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect provided in Section 6 hereof and the provision of opinions of counsel
and accountants' letters to the effect provided in Section 4.1(a)(v) hereof.
Each Holder participating in the registration, as appropriate, shall be a party
to any such underwriting agreement and the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters, shall also be made to and for the benefit of such Holders.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may require
the Registrable Securities requested to be registered pursuant to Section 3 by
any Holder to be included in such underwriting on the same terms and conditions
as shall be applicable to the Other Securities being sold through underwriters
under such registration. In any such case, each Holder participating in the
registration shall be party to any such underwriting agreement. Such agreements
shall contain such representations, warranties and covenants by such Holder, as
appropriate, and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect provided in
Section 6 hereof. The representations and warranties in such underwriting
agreement by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made and for the benefit of such
Holders.
Section 5. Preparation: Reasonable Investigation.
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company will give each Holder participating in the registration and the
underwriters, if any, and their respective counsel and accountants
(collectively, the "Inspectors"), such reasonable and customary access to its
books and records (collectively, the "Records") and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of the Holder and such underwriters or their respective counsel,
to conduct a reasonable investigation within the meaning of the Securities Act.
Records which the Company reasonably determines to be confidential and which it
notifies the Inspectors in writing are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary or
appropriate to avoid or correct a misstatement or omission in the registration
statement, (ii) the portion of the Records to be disclosed has otherwise become
publicly known, (iii) the information in such Records is to be used in
connection with any litigation or governmental investigation or hearing relating
to any registration statement or (iv) the release of such Records is ordered
pursuant to a subpoena or other order. Each Holder agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company.
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Section 6. Indemnification and Contribution.
6.1 Indemnification By the Company. The Company agrees to indemnify
and hold harmless each Person who participates as an underwriter, each Holder
participating in a registration pursuant to this Agreement, each of their
respective officers and directors and each Person, if any, who controls any such
underwriter or such Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act as follows:
(a) against any and all loss, claim, damage and
expense whatsoever, as incurred, arising out of or caused
by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement (or
any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act,
including all documents incorporated therein by
reference, or the omission or alleged omission therefrom
of a material fact required to be stated therein or
necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
or final prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(b) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent
of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any
Governmental Body commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or
omission, if such settlement is effected with the written
consent of the Company; and
(c) against any and all expense whatsoever, as
incurred (including fees and disbursements of counsel
chosen by the Holders or any underwriter), reasonably
incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any
Governmental Body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid
under clause (a) or (b) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of or caused by
any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any such Holder (or any such "control" Person) expressly for use in a
registration statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto); and further provided that this indemnity
agreement does not apply to any loss, liability, claim, damage or expense
arising out of or caused by any such Holder's continued circulation, subsequent
to such ▇▇▇▇▇▇'s receipt of the notice described in Section 4.1(a)(vi) hereof,
of a prospectus including the untrue statement of a material fact or omission of
a material fact as to which such notice was provided.
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6.2 Indemnification by the Holders. Each Holder agrees with respect
to each registration pursuant to this Agreement in which such Holder
participates to indemnify and hold harmless the Company and any underwriter, and
each of their respective directors and officers (including each officer of the
Company who signed the registration statement), and each Person, if any, who
controls the Company or any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each other Holder, against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 6.1 hereof, as incurred, with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
registration statement (or any amendment thereto) or any preliminary or final
prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such the Holder
(or any such "control" Person) expressly for use in the registration statement
(or any amendment thereto) or such prospectus (or any amendment or supplement
thereto).
6.3 Indemnification by Underwriter. Anything in Section 6.1 to the
contrary notwithstanding, the Company's obligation to indemnify any underwriter
pursuant to Section 6.1 in an underwritten offering (or any Person controlling
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) shall be conditioned upon the underwriting
agreement with such underwriter containing an agreement by such underwriter to
indemnify and hold harmless the Company and the Holders and each of their
respective directors and officers (including each officer of the Company who
signed the registration statement) and each Person, if any, who controls the
Company and any Holder, within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any and all loss, liability claim,
damage and expense described in the indemnity contained in Section 6.1 hereof,
as incurred, with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the registration statement (or any amendment
thereto) or any preliminary or final prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such underwriter (or any such "control" Person) expressly for
use in the registration statement (or any amendment thereto) or such prospectus
(or any amendment or supplement thereto).
6.4 Conduct of Indemnification Proceedings. Each indemnified party
shall give prompt notice to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may, at its own expense, participate in and direct the defense of such
action.
Section 7. Transferability of Shares.
7.1 Legends. The shares of any Common Stock distributed to the
Holders pursuant to the Acquisition Agreement (the "Original Common Stock")
shall not be sold, assigned, transferred or pledged except upon the conditions
specified in this Section 7, which conditions are intended to ensure compliance
with the provisions of the Securities Act. Each certificate representing
Registrable Securities held by the Holder shall (unless otherwise permitted by
the provisions of Section 7.2 be stamped or otherwise imprinted with a legend
CUSIP No. 63888P-10-9 Exhibit D Page 85 of 91 Pages
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in substantially the following form (in addition to any legend required under
applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THE
PROPOSED TRANSACTION WILL BE EXEMPT FROM REGISTRATION
and, in the case of those Holders listed on Schedule B hereto pursuant to
Section 9:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
PLEDGED, ASSIGNED AND MAY NOT BE SOLD OR TRANSFERRED PRIOR TO
JULY 23, 1999, EXCEPT IN ACCORDANCE WITH SECTION 9 OF THE
REGISTRATION RIGHTS AGREEMENT DATED JULY 23, 1997.
7.2 "Stop Transfer" Orders. Each Holder understands that, so long
as the legend is required to be imprinted on a certificate representing
Registrable Securities, the Company may maintain appropriate "stop transfer"
orders with respect to such Registrable Securities on its books and records and
with those to whom it may delegate registrar and transfer functions.
7.3 Compliance with Resolutions. Each Holder agrees to comply in
all respects with the provisions of this Section 7.3. Prior to any proposed
sale, assignment, transfer or pledge (a "Transfer"), of any Registrable
Securities, unless there is in effect a Registration Statement covering the
proposed Transfer, a Holder shall give written notice to the Company of such
▇▇▇▇▇▇'s intention to effect such Transfer and the name of the proposed
transferee. Each such notice shall describe the manner and circumstances of the
proposed Transfer in sufficient detail, and, if requested by the Company, shall
be accompanied, at the Holder's expense, by either (i) an written opinion of
legal counsel who shall be, and whose legal opinion shall be, reasonably
satisfactory to the Company addressed to the Company, to the effect that the
proposed Transfer of the Registrable Securities may be effected without
registration under the Securities Act; provided that if the proposed Transfer
would, in the opinion of such counsel, require that the Company take action
and/or execute and file with the Commission and/or deliver to the Holder or any
other person any form or document in order to establish the entitlement of the
Holder to take advantage of such method of disposition, the Company agrees
promptly to take any such action and/or execute and file and/or deliver any such
form or document, or (ii) a "no action" letter from the Commission to the effect
that the Transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the Holder of such Registrable Securities shall be entitled
to effectuate a Transfer of such Registrable Securities in accordance with the
terms of the notice delivered by the Holder to the Company. Notwithstanding the
foregoing, it is agreed that the Company will not request an opinion of counsel
for the Holder with respect to Transfers made in reliance on Rule 144 under the
Act except in unusual circumstances, the existence of which shall be determined
in good faith by the Board of Directors of the Company;
CUSIP No. 63888P-10-9 Exhibit D Page 86 of 91 Pages
--------------------------------------------------------------------------------
provided, however, the Holder shall deliver to the Company (i) copies of all
forms customarily delivered or deliverable to brokers in connection with a
Transfer of securities, and (ii) a certificate of the Holder desiring to
Transfer such Registrable Securities containing such representations and
warranties to the Company as are customarily given to brokers in connection with
the Transfer of securities.
7.4 Certificates. Each certificate evidencing the Restricted
Securities with respect to which a Transfer as provided in this Section 7 has
been effected, shall bear, except if such Transfer is made pursuant to Rule 144
under the Act, the appropriate restrictive legend set forth above, except that
such certificate shall not bear such restrictive legend if in the opinion of
counsel for the Holder and the Company such legend is not required in order to
establish compliance with any provision of the Act.
7.5 Rule 144 Sales. At any time when the Holder desires to make
sales of any Registrable Securities in reliance on Rule 144 promulgated under
the Securities Act, the Company covenants and agrees that either there will be
available adequate current public information with respect to the Company as
required by paragraph (c) of said Rule 144 or the Company will use its best
efforts to make such information available without delay if such information is
not available. Without limiting the foregoing, the Company will timely file with
the Commission all reports required to be filed under Section 13 and 15(d) of
the Exchange Act and will promptly furnish to Holder so requesting a written
statement that the Company has complied with all such reporting requirements.
7.6 Assignment. Any Holder may assign his rights hereunder in
connection with any sale, assignment, transfer or pledge of Registrable
Securities provided that such assignee shall have agreed in writing,
satisfactory in form and substance to the Company and its counsel, to be bound
hereby. From and after any such assignment pursuant to this Section 7,
references herein to the Holder shall include such permitted assignee or
assignees.
Section 8. Other Registrable Rights and Registration Statements. The
Company shall not grant to any other person the right to request or demand that
the Company register under any registration statement filed under Section 2 and
3 hereof any of its equity securities unless such rights granted are subordinate
to the rights of the Holders under this Agreement.
Section 9. Restrictions on Transfer.
The Holders set forth on Schedule B hereby agree not to, directly
or indirectly, offer to sell, sell, grant any option for the sale of, assign,
transfer, pledge hypothecate or otherwise encumber or dispose of any shares of
Common Stock, including, but not limited to the Firm Shares and the Contingent
Shares, or dispose of any beneficial interest in the Company for a period of not
less than 24 months following the date hereof without the prior written consent
of at least a majority of the members of the Executive Committee or in the event
that there is no Executive Committee, at least a majority of the members of the
Board of Directors.
CUSIP No. 63888P-10-9 Exhibit D Page 87 of 91 Pages
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Section 10. Miscellaneous.
10.1 Severability. If any term, provision, covenant, restriction,
part or portion of this Agreement is held by a court of competent jurisdiction
to be invalid, void or unenforceable, or is otherwise legally impossible to
perform, the remainder of the terms, provisions, covenants, restrictions, parts
and portions of this Agreement shall remain in full force and effect.
10.2 Specific Enforcement. The parties hereto acknowledge and agree
that irreparable damage would occur event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement, this being in addition to any other remedy to which they may be
entitled by law or equity.
10.3 Entire Agreement. This Agreement and the Acquisition Agreement
contain the entire understanding of the parties with respect to the matters
covered hereby and this Agreement may be amended only by an agreement in writing
executed by the parties hereto.
10.4 Counterparts. This Agreement may be executed in one or more
counterparts by the parties hereto, each of which shall be deemed an original,
but all of which together constitute one and the same instrument.
10.5 Notices. All notices and other communications provided for
herein (including, without limitation, any waivers or consents under this
Agreement) shall be given or made by telecopy, telegraph, cable or otherwise in
writing (each communication given by any of such means to be deemed to be "in
writing" for purposes of this Agreement) and telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at the address for notices
specified below or, as to any party, at such other address as shall be
designated by such party in a notice to the other. Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been duly
given (i) when delivered to the telegraph or cable office or personally
delivered or, (ii) in the case of transmission by telecopy, when telecopied
(with confirmation) and mailed (with same day post-mark) certified mail, return
receipt requested or (iii) in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
if to the Company: Natural Health Trends Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: Lane & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
if to any Holder, to the address of such Holder as it appears in the Records of
the Company.
CUSIP No. 63888P-10-9 Exhibit D Page 88 of 91 Pages
--------------------------------------------------------------------------------
10.6 Waivers. Each party may waive in whole or in part any benefit
or right provided to it under this Agreement. No waiver by any party of any
default with respect to any provision, condition, requirement, or of any benefit
or right hereof shall be deemed to be a waiver of any other provision,
condition, requirement, benefit or right hereof; nor shall any delay or omission
of either party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter.
10.7 Submission to Jurisdiction; Consent to Service of Process. Any
action with respect to any claim arising out of or relating to this Agreement
including any claim for specific performance arising under Section 9.2 hereof
shall be brought in the State, City and County of New York, and in furtherance
thereof (a) each of the Company and the Holders irrevocably consents and submits
to the exclusive jurisdiction of the Supreme Court of the State of New York for
the County of New York and the United State District Court for the Southern
District of New York and (b) each of the Company and the Holders irrevocably
waives any objection which it may have at any time to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement brought
in any such court, irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum
and further irrevocably waives the right to object, with respect to such suit,
action or proceedings brought in any such court, that such court does not have
jurisdiction over such party. Each of the Company and the Holders consents that
service of process upon it in any such suit, action or proceeding may be made in
the manner set forth in Section 9.5 hereof (other than by telecopy).
10.8 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
10.9 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company and the Holders, and their successors
and legal representatives. No rights to the benefit of any third parties are
intended to be created by any provision of this Agreement or any rights
hereunder except to the extent contemplated by Section 7 hereof.
10.10 Governing Law. This Agreement was negotiated and delivered in
the State of New York. 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 to be performed entirely within such state.
CUSIP No. 63888P-10-9 Exhibit D Page 89 of 91 Pages
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officer as of the date set
forth at the head of this Registration Rights Agreement.
NATURAL HEALTH TRENDS CORP.
By:________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
GLOBAL HEALTH ALTERNATIVES, INC.
By:________________________________________
Name: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
THE STOCKHOLDERS SET FORTH ON
SCHEDULE A
By:________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attorney-in-Fact
CUSIP No. 63888P-10-9 Exhibit D Page 90 of 91 Pages
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SCHEDULE A
Azure Limited Partnership I
Capital Development S.A.
Cosmo Finance & Investments Services ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Golden Union International S.A.
N.K. Verwaltungs Inc.
▇. ▇▇▇▇ & Co. A/S
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Revocable Trust (u/a/d 7/20/79)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Didgemere Consultants Limited
Z & M Capital Corporation
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
International Marketing Group Ltd.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. Page
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇▇ ▇▇▇)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Westminster Associates
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Complimentary Medical Associates, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
H. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇
CUSIP No. 63888P-10-9 Exhibit D Page 91 of 91 Pages
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SCHEDULE B
Azure Limited Partnership I
Capital Development S.A.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
