Exhibit
4.6
NU SKIN
ENTERPRISES, INC.
REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “ Agreement
”) is made and entered into as of July 26, 2004, by and among
Nu Skin Enterprises, Inc. (the “ Company ”) and
the Purchasers.
This
Agreement is made pursuant to the Stock Purchase Agreement, dated
as of July 26, 2004, by and among the Selling Stockholders and the
Purchasers (the “ Stock Purchase Agreement ”),
relating to the sale of the Stock by the Selling Stockholders and
the purchase of the Stock by the Purchasers upon the terms and
subject to the conditions set forth therein.
In
consideration of the mutual covenants and agreements contained
herein and or other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and
the Purchasers hereby agree as follows:
1.
Definitions .
Capitalized terms used and not otherwise
defined herein that are defined in the Stock Purchase Agreement
shall have the meanings given such terms in the Stock Purchase
Agreement. As used in this Agreement, the following terms shall
have the following meanings:
“ Agreement ” shall have the meaning set forth
in the Preamble.
“ Advice ” shall have the meaning set forth in
Section 7(c).
“ Affected Holders ” shall have the meaning set
forth in Section 7(d).
“ Closing Date ” means the date on which the
Stock is sold by the Selling Stockholders to the Purchasers
pursuant to the Stock Purchase Agreement.
“ Commission ” means the Securities and Exchange
Commission.
“ Company ” shall have the meaning set forth in
the Preamble.
“ Effectiveness Date ” means, with respect to
the Registration Statement required to be filed, the 120
th
day following the Closing
Date.
“ Effectiveness Period ” shall have the meaning
set forth in Section 2(b).
“ Exchange Act ” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
“ Filing Date ” means, with respect to the
Registration Statement required to be filed hereunder, the 30
th
day following the Closing
Date.
“ Holder ” or “ Holders ”
means the holder or holders, as the case may be, from time to time
of Registrable Securities.
“ Indemnified Party ” shall have the meaning set
forth in Section 6(c).
“ Indemnifying Party ” shall have the meaning
set forth in Section 6(c).
“ Losses ” shall have the meaning set forth in
Section 6(a).
“ Notice ” shall have the meaning set forth in
Section 3(a).
“ Proceeding ” means an action, claim, suit,
investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether
commenced or threatened.
“ Prospectus ” means the prospectus included in
a registration statement, as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the
registration statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
“ Stock Purchase Agreement ” shall have the
meaning set forth in the Preamble.
“ Registrable Securities ” means the Stock that
is sold by the Selling Stockholders to the Purchasers on the
Closing Date pursuant to the Stock Purchase Agreement.
“ Registration Statement ” means the
registration statement required to be filed pursuant to Section 2
hereunder, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference
in such registration statement.
“ Rule 144 ” means Rule 144 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
effect as such Rule.
“ Rule 415 ” means Rule 415 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
effect as such Rule.
“ Rule 424 ” means Rule 424 promulgated by the
Commission pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
effect as such Rule.
“ Securities Act ” means the Securities Act of
1933, as amended, and the rules and regulations thereunder.
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“ Suspension Period ” shall have the meaning set
forth in Section 2(b).
2. Shelf Registration .
(a) On or prior to the Filing Date, the Company shall prepare and
file with the Commission the Registration Statement covering the
resale of all Registrable Securities for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on another appropriate form
in accordance herewith) and shall contain (except if otherwise
directed by the Holders) the “Plan of Distribution”
attached hereto as Annex A . The Company shall use its
commercially reasonable best efforts to cause the Registration
Statement to be declared effective under the Securities Act as soon
as possible but, in any event, no later than the Effectiveness
Date, provided , however , that the Company may, upon
written notice to all Holders, postpone having the Registration
Statement declared effective for a period not to exceed 90 days if
the Company possesses material non-public information, the
disclosure of which would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(b) The Company shall use its commercially reasonable best efforts
to keep the Registration Statement continuously effective under the
Securities Act until the earliest of: (i) the date which is two
years after the date that such Registration Statement is declared
effective by the Commission, (ii) the date when all of the
Registrable Securities registered under the Registration Statement
are disposed of in accordance with the Registration Statement or
(iii) the date when all Registrable Securities covered by such
Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144 (the “ Effectiveness
Period ”). Notwithstanding the foregoing, the Company may
suspend the effectiveness of the Registration Statement and the use
of the related Prospectus by written notice to the Holders for a
period not to exceed an aggregate of 30 days in any 60-day period
(each such period, a “ Suspension Period ”) if
the Board of Directors of the Company shall have determined in good
faith that because of valid business reasons, including the
acquisition or divestiture of assets, pending corporate
developments or similar events, it is in the best interests of the
Company to suspend such effectiveness of use, provided ,
that Suspension Periods shall not exceed an aggregate of 75 days in
any 360-day period. The Company shall not be required to specify in
the written notice to the Holders the nature of the event giving
rise to the Suspension Period.
3. Registration Procedures .
In connection with the Company’s
registration obligations hereunder, the Company shall:
(a) (i) Use its
commercially reasonable best efforts to prepare and file with the
Commission such amendments, including post-effective amendments, to
the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities
for the Effectiveness Period and prepare and file with the
Commission such Registration Statement in order to register for
resale under the Securities Act all of the Registrable Securities,
as the case
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may be; (ii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to the
Registration Statement or any amendment thereto; and (iii) comply
in all material respects with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during
the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration
Statement as so amended or in such Prospectus as so supplemented.
The Company shall not be required to include a Holder’s
shares in the Registration Statement, and a Holder shall not be
entitled to use the related Prospectus, if the Registration
Statement has been declared effective by the Commission and such
Holder has not delivered to the Company a completed and signed
Notice of Registration Statement and Selling Securityholder
Questionnaire (the “ Notice ”), substantially in
the form set forth in Annex B hereto, within fifteen (15) calendar
days of the Closing Date.
(b) Notify the Holders of Registrable
Securities to be sold as promptly as reasonably possible and (if
requested by any such person) confirm such notice in writing (i)
with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request
by the Commission or any other Federal or state governmental
authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information relating
thereto; provided , however , that under no
circumstances shall the Company be required to disclose material
non-public information in connection with the notice pursuant to
this Section 3(b); (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; and
(v) of the suspension of the Registration Statement pursuant to
Section 2.
(c) Use its commercially reasonable best
efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification
(or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest
practicable moment.
(d) Promptly deliver to each Holder, without
charge, as many copies of the Prospectus or Prospectuses and each
amendment or supplement thereto as such Holder may reasonably
request in writing. Subject to any notice by the Company in
accordance with Section 3(b), the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(e) Cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing
the Registrable Securities to be delivered to a transferee pursuant
to the Registration Statement, which certificates shall be free, to
the extent permitted by the Stock Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to
be in such denominations and registered in such names as any such
Holders may request.
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(f) The Company may require each selling
Holder to furnish to the Company a certified statement as to the
number of shares of Common Stock beneficially owned by such Holder
and, if requested by the Commission, the controlling person
thereof.
4.
Registration Expenses .
All fees and expenses incident to the
performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not any Registrable
Securities are sold pursuant to the Registration Statement.
5.
Non-Public Information .
The Company hereby confirms that no Holder
shall be in possession of any information that constitutes
material, non-public information at the time of closing of the sale
and purchase of the Stock pursuant to the terms of the Stock
Purchase Agreement. In addition, the Company shall not provide any
Holder with any information that constitutes material, non-public
information without such Holder’s prior written consent.
6.
Indemnification.
(a) Indemnification by the
Company. The Company shall
indemnify and hold harmless each Holder, the officers, directors,
partners, agents and employees of such Holder, each person who
controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers,
directors, partners, agents and employees of each such controlling
person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages or liabilities
(collectively, “ Losses ”), insofar as such
Losses arise out of or are based upon (i) any untrue or alleged
untrue statement of a material fact contained in the Registration
Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading, and the Company hereby agrees to
reimburse such Holder for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such claim or action as such expenses are incurred; provided,
however, that the Company shall not be liable to any such
Holder in any such case to the extent that such Losses arise out of
or are based upon (1) any untrue statements or alleged untrue
statements or omissions or alleged omissions based upon information
furnished in writing to the Company by such Holder expressly for
use therein, or to the extent that such information relates to such
Holder or such Holder’s proposed method of distribution of
Registrable Securities as set forth in the Registration Statement,
such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an
occurrence of an event of the type specified in Section 3(b), the
use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 7(c). The Company shall notify
the Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
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(b) Indemnification by
Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each person who
controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of each such controlling
person, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising out of or based upon: (x)
such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus,
or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent, that
(1) such untrue statements or alleged untrue statements or
omissions or alleged omissions are based upon information furnished
in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or
such Holder’s proposed method of distribution of Registrable
Securities as set forth in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an
occurrence of an event of the type specified in Section 3(b), the
use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 7(c). In no event shall the
liability of any selling Holder hereunder be greater in amount than
the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Notice of Claims, Etc.
If any Proceeding shall be brought or
asserted against any person entitled to indemnity hereunder (an
“ Indemnified Party ”), such Indemnified Party
shall promptly notify the person from whom indemnity is sought (the
“ Indemnifying Party ”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure
of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except and only to the extent that such failure
shall have adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and
expenses or (2) the Indemnifying Party shall have failed promptly
to assume the defense of such Proceeding and to employ counsel
within a commercially reasonable period of time after having
received written notice of such Proceeding. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party,
effect any settlement or compromise of or consent to the entry of a
judgment with respect to any pending or threatened Proceeding in
respect of which indemnification or contribution may be sought
hereunder, unless such settlement, compromise or judgment (i)
includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such
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Proceeding and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on
behalf of any Indemnified Party.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party (regardless of whether it
is ultimately determined that an Indemnified Party is not entitled
to indemnification hereunder; provided, that the Indemnifying Party
may require such Indemnified Party to undertake to reimburse all
such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution.
If a claim for indemnification under
Section 6(a) or 6(b) is unavailable to or insufficient to hold
harmless an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as
well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action
in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set
forth in Section 6(c), any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in
accordance with its terms. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to
