REGISTRATION RIGHTS AGREEMENT
Exhibit 10.21
This Registration Rights Agreement ("Agreement"), dated May 12, 2016, is made by and between EMERALD MEDICAL APPLICATIONS CORP., a Delaware corporation ("Company"), and KODIAK CAPITAL GROUP, LLC a Delaware limited liability company (the "Investor").
RECITALS
WHEREAS, upon the terms and subject to the conditions of the Equity Purchase
Agreement ("Purchase Agreement"), between the Investor and the Company, the
Company has agreed to issue and sell to the Investor shares (the "Put Shares")
of its common stock, $0.0001 par value per share (the "Common Stock") from time
to time for an aggregate investment price of up to One Million ($1,000,000)
Dollars (the "EPA Securities");
WHEREAS, as a condition for the execution of the Purchase Agreement by the
Investor, the Company has agreed to issue to the Investor 150,000 shares of
Common Stock (the “Commitment Shares "); and
WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the EPA Securities, the shares
of Common Stock underlying the Commitment Shares, and any securities issued or
issuable with respect to any of the foregoing by way of exchange, stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise (together with the
EPA Securities and the Note Securities, the “Registered Securities”).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall have the
following meaning:
(i) "Execution Date" means the date of this Agreement.
(ii) "Investor" has the meaning set forth in the preamble to this
Agreement.
(iii) "Register," "registered" and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a delayed or
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iv) "Registered Securities" will have the same meaning as set forth in
the Purchase Agreement.
(v) "Registration Statement" means the Company’s registration statement on Form
S-1, or any similar registration statement of the Company filed with SEC under
the Securities Act with respect to the Registered Securities.
(vi) "XXXXX" means the SEC's Electronic Data Gathering, Analysis and
Retrieval System.
(vii) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
SEC thereunder, all as the same will then be in effect.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Purchase Agreement.
2. Obligation of the Company. In connection with the registration of
the Registered Securities, the Company shall do each of the following:
(a) Prepare promptly and file with the SEC by June 30, 2016, a
Registration Statement with respect to not less than the maximum allowable under
Rule 415 of Registered Securities, and thereafter use all commercially
reasonable efforts to cause such Registration Statement relating to the
Registered Securities to become effective within five (5) business days after
notice from the Securities and Exchange Commission that such Registration
Statement may be declared effective, and keep the Registration Statement
effective at all times prior to the termination of the Purchase Agreement until
the earliest of (i) the date that is three months after the completion of the
last Closing Date under the Purchase Agreement, (ii) the date when the Investor
may sell all Registered Securities under Rule 144 without volume limitations, or
(iii) the date the Investor no longer owns any of the Registered Securities
(collectively, the "Registration Period"), which Registration Statement
(including any amendments or supplements, thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(b) Prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary to keep
the Registration Statement effective at all times during the Registration
Period, and to comply with the provisions of the Securities Act with respect to
the disposition of all Registered Securities of the Company covered by the
Registration Statement until the expiration of the Registration Period.
(c) With respect to the Registered Securities, upon written request by
the Investor, permit counsel designated by Investor to review the Registration
Statement and all amendments and supplements thereto a reasonable period of time
(but not less than two (2) business days) prior to their filing with the SEC,
and not file any document in a form to which such counsel reasonably objects.
(d) As promptly as practicable after becoming aware of the following facts,
the Company shall notify Investor and Investor’s legal counsel identified to the
Company and (if requested by any such person) confirm such notice in writing no
later than one (1) business day thereafter (i): (A) when a prospectus or any
prospectus supplement or post-effective amendment to the Registration Statement
is filed; (B) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of the issuance by the SEC
of any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registered Securities or the initiation of any
proceedings for that purpose; and (iii) 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 Registered Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose.
(e) Unless available to the Investor without charge through XXXXX, the
SEC's website or the Company's website, furnish to Investor, promptly after the
same is prepared and publicly distributed, filed with the SEC, or received by
the Company, one (1) copy of the Registration Statement, each preliminary
prospectus and the prospectus, and each amendment or supplement thereto;
(f) Use all commercially reasonable efforts to (i) register and/or
qualify the Registered Securities covered by the Registration Statement under
such other securities or blue sky laws of such jurisdictions as the Investor may
reasonably request and in which significant volumes of shares of Common Stock
are traded, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualification in effect at all
times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registered Securities for sale in such
jurisdictions: provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(f), (B) subject itself to general taxation in any such
jurisdiction, (C) file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause more than nominal expense
or burden to the Company or (E) make any change in its charter or by-laws or any
then existing contracts, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders;
(g) As promptly as practicable after becoming aware of such event,
notify the Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes 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 the light of the circumstances under which they
were made, not misleading ("Registration Default"), and promptly prepare a
supplement or amendment to the Registration Statement or other appropriate
filing with the SEC to correct such untrue statement or omission, and take any
other commercially reasonable steps to cure the Registration Default, and,
unless available to the Investor without charge through XXXXX, the SEC's website
or the Company's website, deliver a number of copies of such supplement or
amendment to the Investor as the Investor may reasonably request.
(h) Use its commercially reasonable efforts to secure quotation for such
Registered Securities on the OTCQB, OTCQX or OTCPink markets;
(i) Provide a transfer agent for the Registered Securities (the
“Transfer Agent”) not later than the Execution Date under the Purchase
Agreement;
(j) Cooperate with the Investor to facilitate the timely preparation
and delivery of certificates for the Registered Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registered Securities to be in such denominations or amounts as the case may be,
as the Investor may reasonably request and registration in such names as the
Investor may request; and, within five (5) business days after a Registration
Statement which includes Registered Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected by the Company
to deliver, to the Transfer Agent (with copies to the Investor) an appropriate
instruction and opinion of such counsel, if so required by the Transfer Agent;
and
(k) Take all other commercially reasonable actions necessary to
expedite and facilitate distribution to the Investor of the Registered
Securities pursuant to the Registration Statement.
3. Obligations of the Investor. In connection with the registration of
the Registered Securities, the Investor shall have the following obligations;
(a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registered Securities of the Investor that the Investor shall timely furnish to
the Company such information regarding itself, the Registered Securities held by
it, and the intended method of disposition of the Registered Securities held by
it, as shall be reasonably required to effect the registration of such
Registered Securities and shall timely execute such documents in connection with
such registration as the Company may reasonably request.
(b) The Investor by such Investor’s acceptance of the Registered
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder; and
(c) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 2(d)(ii)
or (iii) or 2(g) above, the Investor will immediately discontinue disposition of
Registered Securities pursuant to the Registration Statement covering such
Registered Securities until the Investor receives the copies of the supplemented
or amended prospectus contemplated by Section 2(d)(ii) or (iii) or 2(g) and, if
so directed by the Company, the Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession, of the prospectus covering
such Registered Securities current at the time of receipt of such notice.
4. Expenses of Registration. All reasonable expenses incurred
in connection with registrations, filings or qualifications pursuant to Section
2, including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company.
5. Indemnification. After Registered Securities are included
in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless, the Investor, the directors, if any, of such Investor, the officers,
if any, of such Investor, each person, if any, who controls the Investor within
the meaning of the Securities Act or the Exchange Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the
statements made therein, in the light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being collectively referred to as "Violations"). Subject to
Section 5(b) hereof, the Company shall reimburse the Investor, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 5(a) shall not
(i) apply to any Claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 2(b) hereof; (ii) with respect to
any preliminary prospectus, inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registered Securities that are
the subject thereof (or to the benefit of any person controlling such person) if
the untrue statement or omission of material fact contained in the preliminary
prospectus was corrected in the prospectus, as then amended or supplemented, if
such prospectus was timely made available by the Company pursuant to Section
2(b) hereof; (iii) be available to the extent such Claim is based on a failure
of the Investor to deliver or cause to be delivered the prospectus made
available by the Company; or (iv) apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld. The Investor will
indemnify the Company, its officers, directors and agents (including legal
counsel) against any claims arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company, by or on behalf of the Investor, expressly for use in connection
with the preparation of the Registration Statement, subject to such limitations
and conditions set forth in the previous sentence.
(b) Promptly after receipt by an Indemnified Person under this Section
5 of notice of the commencement of any action (including any governmental
action), such Indemnified Person shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 5, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person, as
the case may be; provided, however, that an Indemnified Person shall have the
right to retain its own counsel with the reasonable fees and expenses to be paid
by the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person and any other
party represented by such counsel in such proceeding. In such event, the Company
shall pay for only one separate legal counsel for the Investor selected by the
Investor. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person under this Section
5, except to the extent that the indemnifying party is prejudiced in its ability
to defend such action. The indemnification required by this Section 5 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
6. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 5 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 5 and; (b) no seller of
Registered Securities guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any seller of Registered Securities who was not guilty of such fraudulent
misrepresentation.
7. Reports under Exchange Act. With a view to making available to the
Investor the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to use its commercially reasonable efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act for so long as the
Company remains subject to such requirements, and the filing of such reports is
required for sales under Rule 144;
(c) furnish to the Investor so long as the Investor owns Registered
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) unless available to the Investor without charge
through XXXXX, the SEC's website or the Company's website, a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration; and
(d) at the request of any Investor of Registered Securities, give its
Transfer Agent instructions (supported by an opinion of Company counsel, if
required or requested by the Transfer Agent) to the effect that, upon the
Transfer Agent’s receipt from such Investor of:
(i) a certificate (a “Rule 144 Certificate”) certifying (A) that such Investor
has held the shares of Registered Securities which the Investor proposes to sell
(the “Securities Being Sold”) for a period of not less than (6) months and (B)
as to such other matters as may be appropriate in accordance with Rule 144 under
the Securities Act, and
(ii) an opinion of counsel acceptable to the Company (for which purposes it is
agreed that the initial Investor’s counsel shall be deemed acceptable if such
opinion is not given by Company counsel) that, based on the Rule 144
Certificate, Securities Being Sold may be sold pursuant to the provisions of
Rule 144, even in the absence of an effective Registration Statement, the
Transfer Agent is to effect the transfer of the Securities Being Sold and issue
to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent’s books and records (except to the extent any such
legend or restriction results from facts other than the identity of the
Investor, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an certificate without any restrictive legend.
8. Miscellaneous.
(a) Registered Owners. A person or entity is deemed to be a holder of
Registered Securities whenever such person or entity owns of record such
Registered Securities. If the Company receives conflicting instructions, notices
or elections from two or more persons or entities with respect to the same
Registered Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registered
Securities.
(b) Rights Cumulative; Waivers. The rights of each of the parties under
this Agreement are cumulative. The rights of each of the parties hereunder shall
not be capable of being waived or varied other than by an express waiver or
variation in writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such right. No act
or course of conduct or negotiation on the part of any party shall in any way
preclude such party from exercising any such right or constitute a suspension or
any variation of any such right.
(c) Benefit; Successors Bound. This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights, and benefits hereof,
shall be binding upon, and shall inure to the benefit of, the undersigned
parties and their successors.
(d) Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied, between them
with respect to this Agreement or the matters described in this Agreement,
except as set forth in this Agreement and in the other documentation relating to
the transactions contemplated by this Agreement. Any such negotiations,
promises, or understandings shall not be used to interpret or constitute this
Agreement.
(e) Amendment. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Investor. Any amendment or waiver affected in accordance with this
Section 9 shall be binding upon the Company.
(f) Severability. Each part of this Agreement is intended to be
severable. In the event that any provision of this Agreement is found by any
court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this Agreement
shall continue in full force and effect.
(g) Notices. Any and all notices or other communications or deliveries
to be provided by the Investor hereunder shall be in writing and delivered
personally, by facsimile, by email attachment, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth below, or such other facsimile number, email address, or address as
the Company may specify for such purposes by notice to the Holder delivered in
accordance with this Section 8(g). Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, by email attachment, or sent by a nationally
recognized overnight courier service addressed to the Investor at the facsimile
number or email address or address of the Investor set forth below. Any notice
or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or email
attachment to the email address set forth on the signature pages attached hereto
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment to the email address set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the
second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party to
whom such notice is required to be given. The addresses for such communications
shall be:
If to the Company:
Emerald Medical Applications Corp.
0 Xxxxx Xxxxxx
Xxxxxx Xxxxx 0000000 Israel
Attn: Lior Wayn, CEO
Email: xxxx@xxxxxxxxxxxx.xxx
with a copy to:
Office of Xxxxxxx Xxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Esq.
Email: xxxxxx@xxxxxxxxxxxxxxx.xx
If to the Investor:
Kodiak Capital Group, LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
xxxxx@xxxxxxxxxxx.xxx
Either party hereto may from time to time change its address or email for
notices under this Section 8(g) by giving at least ten (10) days' prior written
notice of such changed address to the other party hereto.
(h) Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the Company and the Investor
shall be governed, construed and interpreted in accordance with the laws of the
State of California, without giving effect to principles of conflicts of law.
Each of the Company and Investor hereby submit to the exclusive jurisdiction of
the United States Federal and state courts located in California with respect to
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein.
(i) Consents. The person signing this Agreement on behalf of each party
hereby represents and warrants that he has the necessary power, consent and
authority to execute and deliver this Agreement on behalf of that party.
(j) Further Assurances. In addition to the instruments and documents to
be made, executed and delivered pursuant to this Agreement, the parties hereto
agree to make, execute and deliver or cause to be made, executed and delivered,
to the requesting party such other instruments and to take such other actions as
the requesting party may reasonably require to carry out the terms of this
Agreement and the transactions contemplated hereby.
(k) Section Headings. The Section headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(l) Construction. Unless the context otherwise requires, when used
herein, the singular shall be deemed to include the plural, the plural shall be
deemed to include each of the singular, and pronouns of one or no gender shall
be deemed to include the equivalent pronoun of the other or no gender.
(m) Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by email of a .pdf or
telephone line facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement. A facsimile transmission or
email of a .pdf of this signed Agreement shall be legal and binding on all
parties hereto.
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
COMPANY:
EMERALD MEDICAL APPLICATIONS CORP.
By: /s/ Lior Wayn
Name: Lior Wayn
Title: Chief Executive Officer
INVESTOR:
KODIAK CAPITAL GROUP, LLC
By:
Name:
Title:
