Attached files
Exhibit 4.1
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER
AND REASONABLY APPROVED BY THE COMPANY), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
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COMMON STOCK PURCHASE WARRANT
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Number
of shares:
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Holder:
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Exercise
Price per Share:
$4.75
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Warrant
No.
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Expiration
Date:
, 2021
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Issue
Date:
,2018
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FOR VALUE RECEIVED, Youngevity International, Inc., a
Delaware corporation (the “Company”), hereby
certifies that_____________, or its designated assigns (the
“Warrant
Holder”), is entitled to purchase the securities set
forth below.
This
Warrant entitles the Warrant Holder to purchase from the Company
(i) at any time after the Issue Date and before the Expiration
Date, __________ (______) shares (the “Initial Warrant Shares”) of
common stock (the “Common Stock”) of the
Company and (ii) any time after the Second Closing (as defined in
the Securities Purchase Agreement dated as of the date hereof by
and between the Company and the Warrant Holder) and before the
Expiration Date ______ (____) shares (the “Second
Warrant Shares, the
Initial Warrant Shares and the Second Warrant Shares, collectively,
the “Warrant Shares”), at an exercise price of
$4.75 per share (as adjusted
from time to time as provided in Section 7 hereof, the
“Exercise
Price”),.
This
Warrant is being issued pursuant to that certain Securities
Purchase Agreement, dated as of the date hereof by and between the
Company and the Warrant Holder, (the “Purchase
Agreement”). Capitalized terms used herein but not otherwise
defined herein, shall have the meanings given to them in the
Purchase Agreement.
This
Warrant is subject to the following terms and
conditions:
1. Registration of Warrant.
Subject to the terms of that certain Registration Rights Agreement
dated as of _____, 2018 by and between the Company and the Warrant
Holder, the Company shall register this Warrant upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in
the name of the record Warrant Holder hereof from time to time. The
Company may deem and treat the registered Warrant Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Warrant Holder, and for
all other purposes, unless provided notice to the contrary in
accordance herewith.
2. Investment Representation. The
Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the
account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder
will not sell or otherwise dispose of this Warrant or the
underlying Warrant Shares in violation of applicable securities
laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities
Act of 1933, as amended (the “1933 Act”) and may not be
sold by the Warrant Holder except pursuant to an effective
registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with
federal and state securities laws. If this Warrant was acquired by
the Warrant Holder pursuant to the exemption from the registration
requirements of the 1933 Act afforded by Regulation S thereunder,
the Warrant Holder acknowledges and covenants that this Warrant may
not be exercised by or on behalf of a Person during the one year
distribution compliance period (as defined in Regulation S)
following the date hereof. “Person” means an
individual, partnership, firm, limited liability company, trust,
joint venture, association, corporation, or any other legal
entity.
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3. Validity of Warrant and Issue of
Shares. The Company represents and warrants that this
Warrant has been duly authorized and validly issued and warrants
and agrees that all of Warrant Shares that may be issued upon the
due exercise of the rights represented by this Warrant will, when
issued upon such exercise, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at
all times have authorized and reserved a sufficient number of
shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.
4.
Registration of Transfers
and Exchange of Warrants.
a.
Subject to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of this Warrant,
or any portion of this Warrant, in the Warrant Register, upon
delivery by the Warrant Holder to the Company, pursuant to Section
10 of (i) this Warrant, and (ii) a duly completed and executed
written assignment. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new warrant, a “New Warrant”), evidencing
the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the
transferring Warrant Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder
of a Warrant.
b. This
Warrant is exchangeable, upon the surrender hereof by the Warrant
Holder to the office of the Company specified in or pursuant to
Section 10 for one or more New Warrants, evidencing in the
aggregate the right to purchase the number of Warrant Shares which
may then be purchased hereunder. Any such New Warrant will be dated
the date of such exchange, and will have the same Expiration Date
as the original Warrant for which the New Warrant was
exchanged.
5.
Exercise of
Warrants.
a.
Exercise of this Warrant shall be made upon delivery to the Company
pursuant to Section 10, of (i) this Warrant; (ii) a duly completed
and executed election notice, in the form attached hereto (the
“Election Notice”) and (iii) payment of the Exercise
Price. Payment of the Exercise Price may be made at the option of
the Warrant Holder either (a) in cash, wire transfer or by
certified or official bank check payable to the order of the
Company equal to Exercise Price per share in effect at the time of
exercise multiplied by the number of Warrant Shares specified in
the Election Notice, or (b) if a registration statement registering
the Warrant Shares is not effective at the time of exercise then
the Warrant may only be exercised through a cashless exercise
provided in Section 5(b) below. The Company shall promptly (but in
no event later than three (3) business days after the “Date
of Exercise,” as defined herein) issue and deliver to the
Warrant Holder in such name or names as the Warrant Holder may
designate in the Election
Notice,
a certificate for the Warrant Shares issuable upon such exercise,
with such restrictive legend as required by the 1933 Act, as
applicable. Any person so designated by the Warrant Holder to
receive Warrant Shares shall be deemed to have become holder of
record of such Warrant Shares as of the Date of Exercise of this
Warrant. All Warrant Shares delivered to the Warrant Holder the
Company covenants, shall upon due exercise of this Warrant, be duly
authorized, validly issued, fully paid and
non-assessable.
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b. If
the closing price per share of the Common Stock (as quoted by
NASDAQ or other principal trading market, if applicable) reported
on the day immediately preceding the Date of Exercise (the
“Fair Market
Value”) of one share of Common Stock is greater than
the Exercise Price of one Warrant Share (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash,
if a registration statement registering the Warrant Shares is not
effective at the time of exercise then the Warrant may only be
exercised by the Warrant Holder electing to receive that number of
Warrant Shares computed using the following formula:
X=Y (A-B)
A
Where
X= the number of shares of Common Stock to be issued to the Warrant
Holder
Y=
the number of
shares of Warrant Shares purchasable under this Warrant or, if only
a portion of this Warrant is being exercised, the portion of this
Warrant being exercised (at the date of such
calculation)
A=
Fair Market
Value
B=
Exercise Price (as
adjusted to the date of such calculation)
For
purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction in the manner described
above shall be deemed to have been acquired by the Warrant Holder,
and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally
issued.
c. A
“Date of
Exercise” means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable),
(ii) the Election Notice (or attached to such New Warrant)
appropriately completed and duly signed, and (iii) payment of the
Exercise Price (if this Warrant is exercised on a cash basis) for
the number of Warrant Shares so indicated by the Warrant Holder to
be purchased.
d. This
Warrant shall be exercisable at any time and from time to time for
such number of Warrant Shares as is indicated in the attached Form
of Election to Purchase. If less than all of the Warrant Shares
which may be purchased under this Warrant are exercised at any
time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.
e.
Notwithstanding any other provision of this Warrant, the Warrant
Holder may not exercise this Warrant if such exercise would cause
Warrant Holder’s beneficial ownership (as defined by Section
13(d) of the Securities Exchange Act of 1934, as amended) of the
Common Stock of the Company to exceed 4.9% of its total issued and
outstanding Common Stock or voting shares. Upon not less than
sixty-one (61) days advance written notice, at any time or from
time to time, the Warrant Holder at its sole discretion, may waive
this provision of this Warrant.
f.
Notwithstanding any other provision of this Warrant, the Warrant
Holder may not exercise this Warrant if such exercise would cause
Warrant Holder’s beneficial ownership (as defined by Section
13(d) of the Securities Exchange Act of 1934, as amended) of the
Common Stock of the Company to exceed 9.9% of its total issued and
outstanding Common Stock or voting shares. Any common shares
exercised under this Warrant need to be delivered to the Warrant
Holder within three (3) business days of the receipt of Exercise
Notice.
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6. Common Share Issuance. Upon
receipt by the Company of a written request from Warrant Holder to
exercise any portion of any Warrant, subject to any limitations on
exercise contained in any Warrant, the Company shall have three (3)
business days (“Delivery Date”) to issue the shares of
Common Stock rightfully listed in such request. If the Company
fails to timely issue instructions to its transfer agent to issue
the shares or fails to deliver the shares through willful failure
or deliberate hindrance, the Company shall pay to Warrant Holder in
immediately available funds $500.00 per day past the Delivery Date
that the shares are actually issued. Any amounts due under this
Section shall be paid by the fifth (5th) day of the month following
the month in which they accrued. The Company agrees that the right
to exercise its Warrants is a valuable right to Warrant Holder and
a material consideration of it entering this Agreement. The parties
agree that it would be impracticable and extremely difficult to
ascertain the amount of actual damages caused by a failure of the
Company to timely deliver shares as required hereby. Therefore, the
parties agree that the foregoing liquidated damages provision
represents reasonable compensation for the loss which would be
incurred by the Warrant Holder due to any such breach. The parties
agree that this Section is not intended to in any way limit Warrant
Holder’s right to pursue other remedies, including actual
damages and/or equitable relief.
7. Adjustment of Exercise Price and
Number of Shares. The character of the shares of stock or
other securities at the time issuable upon exercise of this Warrant
and the Exercise Price therefor, are subject to adjustment upon the
occurrence of the following events:
a.
Adjustment for
Reorganization, Consolidation, Merger, Etc. In case of any
consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate
reorganization, in which the Company shall not be the continuing or
surviving entity of such consolidation, merger or reorganization
(any such transaction being hereinafter referred to as a
“Reorganization”), then,
in each case, the Holder of this Warrant, on exercise hereof at any
time after the consummation or effective date of such
Reorganization (the “Effective Date”), shall
receive, in lieu of the shares of stock or other securities at any
time issuable upon the exercise of the Warrant issuable on such
exercise prior to the Effective Date, the stock and other
securities and property (including cash) to which such Holder would
have been entitled upon the Effective Date if such holder had
exercised this Warrant immediately prior thereto (all subject to
further adjustment as provided in this Warrant). The Company shall
ensure that the surviving entity in any Reorganization specifically
assumes the Company’s obligations under this
Warrant.
b.
Exercise Price
Adjustment. If at any time the Company grants, issues or
sells any Common Stock, options to purchase Common Stock,
securities convertible into Common Stock or rights relating to
Common Stock (the “Purchase Rights”) to any person,
entity, association, or other organization other than the Holder
and other than an Excluded Issuance, at a price per share less than
the Exercise Price, then the Exercise Price hereof shall be
proportionately reduced to match the price per share of the
Purchase Rights. For purposes of clarification, if the exercise
price of the Warrant Shares is $4.75, and if the Company sells
Common Stock at $3.00 per share at any time after the date hereof,
then the Exercise Price of Holder’s Warrant Shares would be
adjusted to $3.00. Notwithstanding, the Exercise Price may not
exceed $4.75 per share in any case. Exercise Price Adjustment set forth in this
Paragraph 7(b) will expire on August 29, 2020 and thereafter be of
no force or effect. “Excluded Issuances” means any
issuance or sale (or deemed issuance or sale in accordance with
Section 7(b) hereof) by the Company after the original issue date
of: (the “Original Issue Date”)(a) shares of Common
Stock issued upon the exercise of this Warrant, (b) shares of
Common Stock (as such number of shares is equitably adjusted for
subsequent stock splits, stock combinations, stock dividends and
recapitalizations) issued directly or upon the exercise of Options
or Options issued to directors, officers, employees, or consultants
of the Company in connection with their service as directors of the
Company, their employment by the Company or their retention as
consultants by the Company, in each case authorized by the Board of
Directors and issued in accordance with the Stock Plan as in effect
on the Original Issue Date, a copy of which has been delivered to
Holder, (c) shares of Common Stock issued upon the exercise of
warrants, preferred stock outstanding on the Original Issue Date,
(d) securities issued in lieu of cash pursuant to merger,
consolidation, acquisition or strategic transactions approved by a
majority of the disinterested directors of the Company but shall
not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities and/or
being issued to affiliates, employees and/or related persons of the
Company and/or any of its affiliates, (e) securities issued
pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement or debt financing having such terms
and on such terms and conditions and from a bank or similar
financial institution chartered by the Office of the Comptroller of
the Currency, Federal Deposit
Insurance Corporation, Federal Reserve
Board or National Credit Union
Administration, all as approved by a majority of the
disinterested directors of the Company, (f) securities to an entity
as a component of any business relationship with such entity
primarily for the purpose of a joint venture or licensing activity
or another arrangement involving a corporate partner primarily for
purposes other than raising capital, but shall not include a
transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary
business is investing in securities and/or being issued to
affiliates, employees and/or related persons of the Company and/or
any of its affiliates, and (g) issuance of securities pursuant to a
stock dividend or stock split.
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c. True-up
Adjustments. In the event that the average of the 15 lowest
closing prices for the Company’s common stock on NASDAQ or
other primary trading market for the Company’s common stock
(the average of such lowest closing prices being herein referred
to, the “True-up Price”) during the period beginning on
the Issue Date and ending on the date 90 days from the effective
date of the “Registration Statement,” as defined in the
Securities Purchase Agreement, then the Exercise Price will be
reduced to equal the greater of the True-up Price or
$3.00.
d. Adjustments
for Stock Dividends; Combinations, Etc. In case the Company
shall do any of the following (an
“Event”):
(i) declare a dividend
or other distribution on its Common Stock payable in Common Stock
of the Company,
(ii) subdivide
the outstanding Common Stock pursuant to a stock split or
otherwise, or
(iii) reclassify
its Common Stock,
then
the number of shares of Common Stock or other securities at the
time issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any such Event; however, there shall be no
adjustment to the Exercise Price or issuable Warrant Shares in the
event of a reverse stock split or other reduction in the authorized
Common Stock of the Company.
e. Certificate
as to Adjustments. In case of any adjustment or readjustment
in the price or kind of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to
the holder of this Warrant in the form of a certificate, certified
and confirmed by the Board of Directors of the Company, setting
forth such adjustment or readjustment and showing in reasonable
detail the facts upon which such adjustment or readjustment is
based.
8. Registration Rights. This
Warrant will have registration rights pursuant to the Registration
Rights Agreement between the Company and Holder. To the extent that
there is a conflict between any condition, term or provision of
this Warrant and the Registration Rights Agreement, the conditions,
terms, and provisions set forth in the Registration Rights
Agreement shall specifically supersede the conflicting conditions,
provisions and/or terms in this Warrant.
9. Fractional Shares. The Company
shall not be required to issue or cause to be issued fractional
Warrant Shares on the exercise of this Warrant. The number of full
Warrant Shares that shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of
Warrants Shares purchasable on exercise of this Warrant so
presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 9, be issuable on the exercise of this
Warrant, the Company shall, at its option, (i) pay an amount in
cash equal to the Exercise Price multiplied by such fraction or
(ii) round the number of Warrant Shares issuable, up to the next
whole number.
10. Notice. All notices and other
communications hereunder shall be in writing and shall be deemed to
have been given (i) on the date they are (a) delivered if delivered
in person or (b) sent, if sent by email; (ii) on the date initially
received if delivered by facsimile transmission followed by
registered or certified mail confirmation; (iii) on the date
delivered by an overnight courier service; or (iv) on the third
business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid as
follows:
If to
the Company:
Youngevity
International, Inc.
2400
Boswell Road
Chula
Vista, CA 91914
Attn:
Stephan Wallach
If to
the Warrant Holder:
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11.
Miscellaneous.
a. This
Warrant is being granted pursuant to the Purchase Agreement. To the
extent that there is a conflict between any condition, term or
provision of this Warrant and the Purchase Agreement, the
conditions, terms, and provisions set forth herein shall
specifically supersede the conflicting conditions, provisions
and/or terms in the Purchase Agreement.
b. This
Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing and signed by the Company
and the Warrant Holder. Warrant Holder may assign this Warrant
without consent from the Company but in accordance with the
restrictions herein.
c.
Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal
or equitable right, remedy or cause of action under this Warrant;
this Warrant shall be for the sole and exclusive benefit of the
Company and the Warrant Holder.
d. This
Warrant shall be governed by and construed in accordance with the
laws of the State of Florida, without regard to conflict of laws
provisions. All disputes arising out of or in connection with this
Warrant, or in respect of any legal relationship associated with or
derived from this Warrant, shall only be heard in any competent
court residing in Broward County, Florida. The Company agrees that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any manner provided by law. The Company further
waives any objection to venue in any such action or proceeding on
the basis of inconvenient forum. The Company agrees that any action
on or proceeding brought against the Warrant Holder shall only be
brought in such courts.
e. In
the event the Warrant Holder hereof shall refer this Warrant
Agreement to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or
effecting the enforcement of the Warrant Holder's rights, including
reasonable attorney's fees, if a suit is instituted and Warrant
Holder is the prevailing party.
f. The
headings herein are for convenience only, do not constitute a part
of this Warrant and shall not be deemed to limit or affect any of
the provisions hereof.
g. In
case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and
the parties will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
h. The
Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at
law or equity, and the rights of the Warrant Holder are limited to
those expressed in this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by the authorized officer as of the date first above
stated.
Youngevity
International, Inc.
By:
Name:
Stephan Wallach
Title:
Chief Executive Officer
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FORM OF ELECTION TO PURCHASE
(To be
executed by the Warrant Holder to exercise the right to purchase
shares of Common Stock under the foregoing Warrant)
To:
Youngevity International,
Inc.
The
undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase (check applicable
box):
☐
________ shares of
the Common Stock covered by such Warrant; or
☐
the
maximum
number of shares of Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth therein.
The undersigned
herewith makes payment of the full purchase price for such shares
at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box
or boxes):
☐
$__________ in
lawful money of the United States; and/or
☐
the
cancellation of
such portion of the attached Warrant as is exercisable for a total
of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation);
and/or
☐
the
cancellation of
such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 5 of the Warrant,
to exercise this Warrant with respect to the maximum number of
shares of Common Stock purchasable pursuant to the cashless
exercise procedure set forth in Section 5.
After
application of the cashless exercise feature as described above,
_____________ shares of Common Stock are required to be delivered
pursuant to the instructions below.
The
undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common
Stock under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to an exemption from
registration under the Securities Act.
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Name of
Warrant Holder:
(Print)__________________________________
(By:)___________________________________
(Name:)_________________________________
(Title:)__________________________________
Signatures
must conform in all respects to the name of the Warrant Holder on
the face of the Warrant.
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