EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into
this __ day of October, 1998, by and among CREATIVE MEDICAL DEVELOPMENT, INC., a
Delaware corporation ("CMDI"), and XXXXXXX X. XXXX (the "Note Holder").
RECITALS
WHEREAS, CMDI is issuing to the Note Holder a Secured Convertible
Subordinated Note ("Note") and desires to grant to the Note Holder certain
registration rights for CMDI's Common Stock which may be issued upon conversion
of the Note. The Note is being issued to the Note Holder pursuant to an
Agreement (the "Agreement") and Affidavit and Agreement of Prospective Investor
("Affidavit"), between CMDI and the Note Holder.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth herein, the
agreements herein expressed, and for other good and valuable consideration, the
parties hereto hereby agree as follows:
1 Registration Rights. CMDI covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "register", "registered,"and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document.
(b) The term "Registrable Securities" means CMDI Common Stock to be issued
upon conversion of the shares of the Note, and any other shares of CMDI Common
Stock issued solely in respect of such Note (because of conversion rights under
the Series 13 Preferred Stock, stock splits, stock dividends, reclassifications,
recapitalizations or similar events).
(c) The number of shares of "Registrable Securities then outstanding" shall
be determined by the number of shares of Common Stock outstanding that are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities that upon issuance would be, Registrable Securities.
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities, and each of such party's respective successors
and assigns who has delivered to CMDI a signed counterpart of this Agreement.
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EXHIBIT 10.14
1.2 Company Registration. If (but without any obligation to do so) CMDI
proposes to register any of its Common Stock under the Act in connection with a
public offering of such securities (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, or a
registration for the issuance of securities in the acquisition of another entity
or its assets, or for any other limited purpose), CMDI shall give the Holder
written notice (the "Notice") of such registration at least 45 days prior to the
effectiveness of the registration statement covering the Common Stock being
offered. Upon the written request of the Holder given to CMDI within twenty (20)
days after the mailing of such Notice by CMDI, CMDI shall, subject to the
provisions of Section 1.6 hereof, use its best efforts to cause to be registered
under the Act all of the Registrable Securities that such Holder has requested
to be registered. The Holder's rights under this Section 1.2 may be exercised an
unlimited number of times.
1.3 Obligations of CMDI. Whenever required under this Section 1 to effect
the registration of any Registrable Securities, CMDI shall, as expeditiously as
reasonably possible:
(a) Prepare and file with the United States Securities and Exchange
Commission ("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to keep the registration statement
effective for the period stated in Section 1.3(a) above, and to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holder such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as he may reasonably request in order to facilitate the
public sale or other disposition of Registrable Securities owned by him.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holder, provided that CMDI
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such an agreement.
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EXHIBIT 10.14
(f) Notify the Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto covered by
such registration statement is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
circumstances then existing.
(g) Promptly notify the Holder of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement (or the initiation of
any formal proceeding for that purpose) or of the receipt by CMDI of any
notification with respect to suspension of the qualification of Registrable
Securities for sale in any jurisdiction (or the initiation of any formal
proceeding for that purpose) or of the receipt by CMDI of any notification with
respect to the suspension of the qualification of Registrable Securities for
sale in any jurisdiction (or the initiation of any formal proceeding for that
purpose). CMDI shall make reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement hereunder or any
post-effective amendment thereto at the earliest practicable date.
1.4 Furnish Information. It shall be a condition precedent to the
obligations of CMDI to take any action pursuant to this Section 1 with respect
to the Registrable Securities of any selling Holder, that such Holder shall
furnish to CMDI such information regarding it, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities and
to execute such documents in connection with such registration as CMDI may
reasonably request.
1.5 Expenses of Company Registration. All expenses (other than underwriting
discounts, commissions and stock transfer taxes relating to Registrable
Securities, and any fees and expenses of special counsel for the selling
shareholders in the registration, which expenses shall be borne by the selling
shareholders in proportion to the number of shares sold by each selling Holder
or as shall otherwise be agreed to by such selling Holders) incurred in
connection with registrations, filings or qualifications pursuant to this
Section 1, including without limitation all registration, filing and
qualification fees, printers and accounting fees, fees and disbursements of
counsel for CMDI, shall be borne by CMDI.
1.6 Underwriting Requirements. In connection with any offering involving an
underwriting of shares of capital stock being issued by CMDI, CMDI shall not be
required under this Section 1 to include any of the Holder's securities in such
underwriting unless the Holder agrees to sell such Holder's Registrable
Securities on the basis provided in the underwriting agreement approved by CMDI
and the underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by CMDI.
If the managing underwriter of the offering shall advise CMDI that inclusion in
the registration statement of the Registrable Securities would, in such managing
underwriter's opinion, interfere with CMDI's proposed distribution of its Common
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EXHIBIT 10.14
Stock or other securities which are not owned by the Holder, then the
underwriters may exclude all or a portion of the Registrable Securities so
requested to be included in such registration.
1.7 Delay of Registration. No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.8 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Section 1:
(a) To the extent permitted by law, CMDI will indemnify and hold harmless
the Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, but excluding any untrue
statement or alleged untrue statement in any preliminary prospectus which is
cured by a later amendment or supplement thereto, or in the final prospectus
related thereto, or (ii) 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; and CMDI will pay to the Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of CMDI (which consent shall not be
unreasonably withheld), nor shall CMDI be liable in any such case for any such
loss, claim, damage, liability, or action to the extent that it arises out of or
is based upon a Violation that occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter, or controlling person.
(b) To the extent permitted by law, Holder will indemnify and hold harmless
CMDI, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls CMDI within the
meaning of the Act, each agent and any underwriter and any officer, director, or
controlling person of any such underwriter against any losses, claims, damages,
or liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by the Holder or its agents expressly or used in connection with such
registration; and Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 1.8(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
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EXHIBIT 10.14
agreement contained in this subsection 1.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided further, that, in no event shall any
indemnity under this subsection 1.8(b) exceed the gross proceeds from the
offering received by Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.8
of notice of the commencement of any action (including governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.8, 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
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
that may be represented without conflict by one counsel) shall have the right to
retain one separate counsel, with reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 1.8, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.8. No indemnifying party, in the
defense of any claim or litigation shall, except with the consent of each
indemnified party, consent to the entry of judgment or enter into any settlement
which does not include as an unconditional term thereof a release from all
liability with respect to such claim or litigation.
(d) The obligations of CMDI and Holder under this Section 1.8 shall survive
the completion of any offering of Registrable Securities in a registration
statement under this Section 1, and otherwise.
1.9 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holder the benefits of Rule 144 promulgated under the Act any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of CMDI to the public without registration, CMDI agrees to do the
following:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other documents
required of CMDI under the Act and the 1934 Act; and
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EXHIBIT 10.14
(c) furnish to Holder forthwith upon request, so long as the Holder
owns any Registrable Securities, (i) a written statement by CMDI that it has
complied with the reporting requirements of SEC Rule 144, (ii) a copy of the
most recent annual or quarterly report of CMDI and such other reports and
documents filed by CMDI with the SEC, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
that permits the selling of any such securities without registration.
1.10 "Market Stand-Off' Agreement. Holder hereby agrees that, during the
period specified by CMDI and an underwriter of common stock or other securities
of CMDI (such period not to exceed 180 days), from the 14-day period preceding
or the period following the effective date of a registration statement of CMDI
filed under the Act, it shall not, to the extent reasonably requested by CMDI
and such underwriter, directly or indirectly sell, offer to sell, contract to
sell, grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of CMDI held by
it at any time during such period except common stock included in such
registration. In order to enforce the foregoing covenant, CMDI may impose
stop-transfer instructions with respect to the Registrable Securities of Holder
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period. The restrictions set forth above
shall not apply to registration statements relating solely to the issuance of
securities to participants in a CMDI stock plan or a registration for the
issuance of securities in the acquisition of another entity or its assets.
1.11 Assignment of Registration Rights. The right to cause CMI)I to
register Registrable Securities pursuant to this Section 1 may be assigned to
any permitted transferee of the Note or Registrable Securities.
1.12 Other Registration Rights. CMDI shall not grant to any party any
rights, which are pari passu or superior to the rights contained in this
Agreement, to require CMDI to register any equity securities of CMDI or any
securities convertible or exchangeable into or exercisable for equity securities
of CMDI, without the written consent of Holder and the other holders of the same
series of notes issued to Holder representing in the aggregate more than fifty
percent (50%) of the Registrable Securities then outstanding.
2. Term. CMDI's obligations to register the Registrable Securities in
accordance with the terms and conditions of this Agreement shall terminate
twenty (20) years from the date of this Agreement unless extended by mutual
agreement of CMDI and the Holder.
3. Miscellaneous.
3.1 Successors and Assigns. Subject to Section 1.11 hereof the terms and
conditions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their permitted successors and assigns
(including without limitation the administrators, executors, representatives,
heirs, legatees and devisees of the Note Holders), and any reference to such a
party hereto shall also be a reference to permitted successors or assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
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EXHIBIT 10.14
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. No assignment or
transfer by CMDI or the Note Holder of their respective rights and obligations
hereunder shall be made, except to the limited extent permitted by Section 1.11
hereof. Notwithstanding the foregoing, this Agreement shall be binding, in
accordance with its terms, upon any successor of CMDI, by virtue of a merger,
consolidation, sale of assets or otherwise, of CMDI.
3.2 Governing Law. The laws of the State of Oregon (irrespective of its
choice of law principles) shall govern the validity of this Agreement, the
construction of its terms, and the interpretation and enforcement of the rights
and duties of the parties.
3.3 Notices. Whenever any party hereto desires or is required to give any
notice, demand, or request with respect to this Agreement, each such
communication shall be in writing and shall be effective only if it is delivered
by personal service or mailed, United States registered or certified mail,
postage prepaid, or sent by prepaid overnight courier or confirmed telecopier,
addressed as follows:
If to CMDI:
Creative Medical Development, Inc.
000 XX Xxxxx Xxxx.
Xxxxxxxx, XX 00000
Telecopier Number (000) 000-0000
Attention: Xxxxxxx X. Xxxx
With a copy to:
Xxxx X. Xxxx, Esq.
Farleigh, Wada & Xxxx, P.C.
000 X.X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Telecopier Number: (000) 000-0000
If to the Note Holder:
Xxxxxxx X. Xxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Such communications shall be effective when they are received by the addressee
thereof. Any party may change its address or telecopier number for such
communications by giving notice thereof to the other parties in conformity with
this Section.
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3.4 Severability. If any provisions of this Agreement, or the application
thereof, shall for any reason or to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances shall continue in full force and effect and in no way be
affected, impaired, or invalidated.
3.5 Amendments and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by CMDI and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 3.5 shall be binding on Holder at the time
outstanding, each future Holder of such Registrable Securities, and CMDI. The
waiver by a party of any breach hereof or default in the performance hereof
shall not be deemed to constitute a waiver of any other default or any
succeeding breach or default. The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
3.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above.
CMDI: NOTE HOLDER:
CREATIVE MEDICAL DEVELOPMENT, INC.
By: /s/ M. Xxxxxxx Xxx Xxxxxx /s/ Xxxxxxx X. Xxxx
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Title: Vice President-Finance & Treasurer Xxxxxxx X. Xxxx
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