EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
August 9, 2004 by and among Crdentia Corp., a Delaware corporation (the
"COMPANY") and the investors listed on SCHEDULE A hereto (individually, an
"INVESTOR" and collectively, the "INVESTORS").
RECITALS:
A. The Company and the Investors are parties to certain Subscription
Agreements (the "SUBSCRIPTION AGREEMENTS"), dated beginning July 31, 2004,
regarding the proposed sale and issuance of shares of the Company's Series B-1
Preferred Stock (the "SERIES B-1 PREFERRED") to the Investors (the "PREFERRED
STOCK FINANCING");
B. In order to induce the parties to participate in the Preferred Stock
Financing, the Investors and the Company hereby agree that this Agreement, among
other things, shall govern the rights of the Investors to cause the Company to
register shares of Common Stock of the Company issuable to the Investors upon
conversion of the Series B-1 Preferred.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and the Subscription Agreement, the parties hereto agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Agreement:
(a) The term "ACT" means the Securities Act of 1933, as amended.
(b) The term "FORM S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "HOLDER" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
SECTION 1.10 hereof.
(d) The term "1934 ACT" shall mean the Securities Exchange Act of
1934, as amended.
(e) 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 Act, and the declaration or ordering of
effectiveness of such registration statement or document.
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(f) The term "REGISTRABLE SECURITIES" means (i) the Common Stock
of the Company (the "COMMON STOCK") issued to the Investors listed on SCHEDULE A
attached hereto pursuant to conversion of the Series B-1 Preferred and (ii) any
Common Stock issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the shares
referenced in (i) above, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which his rights under this
SECTION 1 are not assigned pursuant to the terms of this Agreement.
(g) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. If the Company shall receive from
the Holders of sixty-six and two-third percent (66 2/3%) or more of the
Registrable Securities then outstanding (the "INITIATING HOLDERS") a written
request that the Company file a registration statement in accordance with the
Act covering the registration on a continuous basis pursuant to Rule 415 under
the Act, or any successor rule or regulation ("RULE 415") of all or part of the
Registrable Securities then held by such Holders, the Company shall:
(i) within ten (10) days of the receipt thereof, give
written notice of the proposed registration, qualification or compliance to all
other Holders; and
(ii) use its reasonable and diligent efforts to effect, as
soon as practicable, the registration under the Act of all such Holders'
Registrable Securities as are specified in such request, together with such
portion of the Registrable Securities of any other Holder or Holders joining in
such request as are specified in a written notice given within fifteen (15) days
after receipt of written notice from the Company; PROVIDED, HOWEVER, that the
Company shall not be obligated to take any action to effect any such
registration pursuant to this Section 1.2, (A) after the Company has effected
one (1) registration under this SECTION 1.2; (B) if less than sixty-six and
two-third percent (66 2/3%) of the then outstanding Registrable Securities will
be registered, or (C) if the Holders propose to sell the Registrable Securities
covered by the registration at an aggregate price to the public of less than
$30,000,000.
(b) REGISTRATION STATEMENTS. Any registration statement
filed pursuant to this SECTION 1.2 shall be on Form S-3, or if Form S-3 is not
available, Form S-1 or other appropriate form permitting registration of the
Registrable Securities for resale by the Holders.
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(c) UNDERWRITING. Notwithstanding any other provision of
this SECTION 1.2, the Company shall not be required to file a registration
statement pursuant to this SECTION 1.2 unless the Holders intend to distribute
all of the Registrable Securities covered by the registration statement filed
pursuant to this SECTION 1.2 by means of an underwriter or underwriters of
national standing reasonably approved by the Company. The Company (together with
all Holders proposing to distribute their securities pursuant such registration)
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected by the Holders (and reasonably approved by
the Company). Notwithstanding any other provision of this SECTION 1.2, if the
underwriter advises the Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Holders
requesting the underwriting shall so advise all Holders of Registrable
Securities, and the number of shares included in the underwriting shall be
allocated among the Holders of Registrable Securities requesting registration in
proportion, as nearly as practicable, to the total number of Registrable
Securities held by such Holders at the time of the request for an underwriting.
If any Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw from such underwritten offering by written notice to the
Company, the underwriter and the other Holders whose shares are being included
in the underwriting.
(d) RIGHTS IN ADDITION TO OTHER RIGHTS. The rights under
this SECTION 1.2 are in addition to, and not affected by, the Holders' exercise
of any registration rights contained in SECTION 1.3.
1.3 COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes to register any of its stock or other securities under the Act
in connection with the public offering of such securities solely for cash (other
than a registration effected at the request of one or more stockholders of the
Company (including, without limitation, any registration effected pursuant to a
contractual right of one or more stockholders to request a registration) or
relating solely to the sale of securities to participants in a Company employee
benefit plan or corporate reorganization or other transaction covered by Rule
145 promulgated under the Act, or a registration on any form which does not
permit secondary sales or include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with SECTION 2.6 hereof, the Company shall, subject to the
provisions of SECTION 1.7 hereof, cause to be registered under the Act all of
the Registrable Securities that each such Holder has requested to be registered.
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this SECTION 1
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable and diligent
efforts to cause such registration statement to become effective, and keep such
registration statement effective (i) in the case of a registration statement
filed pursuant to SECTION 1.2, during the Effectiveness Period (as hereinafter
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defined) or (ii) in the case of a registration statement filed pursuant to
SECTION 1.3, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, for up to one hundred twenty (120) days or, if
earlier, the date on which the distribution contemplated in the registration
statement has been completed. As used herein, the term "EFFECTIVENESS PERIOD"
shall mean until the earlier of (i) the termination of the rights set forth in
this Agreement in accordance with SECTION 1.14 or (ii) all of the Registrable
Securities covered by the registration having been sold or a subsequent
registration statement covering any unsold Registrable Securities having been
declared effective.
(b) Provide, at least three (3) business days prior to filing,
any registration statement and included prospectus (including each preliminary
prospectus and any amendments or supplements thereto) prepared in conformity
with the requirements of the Act in connection with SECTIONS 1.2 and 1.3 (the
"REGISTRATION Materials") to the Holders and their respective counsel for review
and comment, if any.
(c) 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 comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(d) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents and Registration Materials as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them that are included in such registration.
(e) Use its reasonable and diligent 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 Holders; PROVIDED, HOWEVER, that the Company 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.
(f) 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. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such agreement.
(g) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event the result
of which causes the prospectus included in such registration statement, as then
in effect, to include an 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 not misleading in light of the circumstances then existing; and
thereafter, the Company will use reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include 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 not misleading in light of
circumstances then existing; PROVIDED, HOWEVER, that upon such notification by
the Company, the Holders will not offer or sell Registrable Securities until the
Company has notified the Holders that it has prepared a supplement or amendment
to such prospectus and delivered copies of such supplement or amendment to the
Holders (it being understood and agreed by the Company that the foregoing
proviso shall in no way diminish or otherwise impair the Company's obligations
to prepare a prospectus amendment or supplement as above provided in this
SECTION 1.4(g)).
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(h) Use its reasonable and diligent efforts, if a registration
statement under SECTION 1.2 ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale of all of the
Registrable Securities registered thereunder or pursuant to the Company's
exercise of the Suspension Right (as hereinafter defined)), to (i) obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and (ii)
amend the registration statement in a manner reasonably expected to obtain the
withdrawal of the order suspending the effectiveness of the shelf registration
or file an additional registration statement covering all of the unsold
Registrable Securities (a "SUBSEQUENT REGISTRATION STATEMENT"). If a Subsequent
Registration Statement is filed, the Company will use its reasonable and
diligent efforts to cause the Subsequent Registration Statement to be declared
effective as soon as practicable and to keep such Subsequent Registration
Statement continuously effective until the end of the Effectiveness Period. The
requirements of this SECTION 1.4(H) that the Company file additional
registration statements shall not be affected by the provisions set forth in
SECTION 1.2 that the Company is only required to file one registration statement
under SECTION 1.2.
(i) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(j) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(k) Use its reasonable and diligent efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities pursuant
to this SECTION 1, on the date that such Registrable Securities are delivered to
the underwriters for sale in connection with a registration statement pursuant
to this SECTION 1, if such securities are being sold through underwriters, or,
if such securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of the Registrable
Securities, and (ii) a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
(l) Notify each seller of Registrable Securities under such
registration statement of (i) the effectiveness of such registration statement,
(ii) the filing of any post-effective amendments to such registration statement,
or (iii) the filing of a supplement to such registration statement.
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1.5 FURNISH INFORMATION.
(a) It shall be a condition precedent to the obligations of the
Company 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
the Company such information regarding itself, 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.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to SECTION 1.2 hereof if, as a result of the
application of SECTION 1.5(A), the number of shares of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares required to originally trigger the Company's obligation to
initiate such registration as specified in SECTION 1.2 hereof.
1.6 EXPENSES OF REGISTRATION. All expenses (other than underwriting
discounts and commissions, stock transfer taxes and fees of counsel to the
stockholders in excess of $15,000) incurred in connection with any
registrations, filings or qualifications of Registrable Securities pursuant to
SECTIONS 1.2 or 1.3 including (without limitation) all federal or state
registration, filing and qualification fees, printers' and accounting fees and
fees and disbursements of counsel for the Company shall be borne by the Company.
The Company shall pay up to an aggregate of $15,000 of the selling stockholders'
legal fees in connection with one (1) registration. Notwithstanding the
foregoing, the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to SECTION 1.2 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered, unless the withdrawal is based upon
a material adverse development concerning the Company and the Holders have
withdrawn the request with reasonable promptness following disclosure by the
Company of such material adverse change.
1.7 UNDERWRITING REQUIREMENTS. In connection with any offering
pursuant to SECTION 1.3 involving an underwriting of shares of the Company's
capital stock by the Company, the Company shall not be required to include any
of the Holders' securities in such underwriting unless they accept the terms of
the underwriting as agreed upon between the Company 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 the Company. If
the total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling stockholder, or in such other proportions as shall
mutually be agreed to by such selling stockholders). For purposes of the
preceding parenthetical concerning apportionment, for any selling stockholder
which is a holder of Registrable Securities and which is a limited liability
company, partnership or corporation, the members, partners, retired partners and
stockholders of such holder, or the estates and family members of any such
members, partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder," and
any pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
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1.8 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.
1.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this SECTION 1:
(a) To the maximum extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, and directors
of each 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 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 any state securities 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, (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, or (iii) any violation or alleged violation by the
Company of the Act, the 1934 Act, or any rule or regulation promulgated under
the Act or the 1934 Act or any state securities law in connection with the
offering covered by such Registration Statement; and the Company will pay to
each such Holder, partner, officer, director, 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 SECTION 1.9(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 the Company (which consent shall not be unreasonably withheld or
delayed), nor shall the Company be liable to any Holder, underwriter or
controlling person for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, partner, officer,
director, underwriter or controlling person.
(b) To the maximum extent permitted by law, each selling Holder
will, if Registrable Securities held by such Holder are included in the
applicable registration statement, indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject under the Act
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or the 1934 Act or any state securities law in connection with the offering
covered by such registration statement insofar as such 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 such Holder expressly for use in connection with such registration;
and each such Holder will pay any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this SECTION 1.9(B), in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the indemnity agreement contained
in this SECTION 1.9(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 or
delayed); PROVIDED FURTHER, that in no event shall any indemnity under this
SECTION 1.9(B) exceed the net proceeds from the offering received by such
Holder, except in the case of willful misconduct or fraud by such Holder.
(c) Promptly after receipt by an indemnified party under this
SECTION 1.9 of notice of the commencement of any action (including any
governmental action) as to which indemnity may be sought hereunder, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this SECTION 1.9, deliver to the indemnifying party a
written notice of the commencement thereof. 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
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the 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, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this SECTION 1.9, but the omission to so deliver written
notice to the indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party otherwise than under this
SECTION 1.9. No indemnifying party, in the defense of any such claim or
litigation, shall, except upon the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full and unconditional release from all liability in
respect to such claim or litigation.
(d) The foregoing indemnity agreements of the Company and Holders
are subject to the condition that, insofar as they related to any Violation made
in a preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the SEC at the time the registration statement in question becomes
effective or the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) (the "FINAL PROSPECTUS"), such indemnity agreement shall not inure to the
benefit of any person if a copy of the Final Prospectus was furnished to the
indemnified party and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
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the Act. If the indemnification provided for in this SECTION 1.9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage or liability referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations; PROVIDED, HOWEVER, that in no event
shall (i) any contribution by a Holder under this SECTION 1.9(D) exceed the net
proceeds from the offering received by such Holder, except in the case of
willful fraud by such Holder, and (ii) any person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) be entitled
to contribution from any person or entity who was not guilty of such fraudulent
misrepresentation. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this SECTION
1.9 shall survive the completion of any offering of Registrable Securities in a
registration statement under this SECTION 1, and otherwise.
1.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities, including a subsidiary, affiliate, partner, limited
partner, retired partner or stockholder of a Holder, provided in each case that
(i) the Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(ii) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement; and (iii) such assignment shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Act.
1.11 REPORTS UNDER THE 1934 ACT. The Company agrees to use
commercially reasonable efforts: (a) to make and keep public information
available, as those terms are understood and defined in the General Instructions
to Form S-3, or any successor or substitute form, and in Rule 144, (b) to file
with the SEC in a timely manner all reports and other documents required to be
filed by an issuer of securities registered under the Securities Act or the
Exchange Act, (c) as long as any Holder owns any Registrable Securities, to
furnish in writing upon such Holder's request a written statement by the Company
that it has complied with the reporting requirements of Rule 144 and of the Act
and the 1934 Act, and to furnish to such Holder a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company with the SEC as may be reasonably requested.
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1.12 DEFERRAL. Notwithstanding anything in this Agreement to the
contrary, if the Company shall furnish to the Holders a certificate signed by
the Chief Executive Officer of the Company stating that the Board of Directors
of the Company has made the good faith determination (a) that continued use by
the Holders of a registration statement for purposes of effecting offers or
sales of Registrable Securities pursuant thereto would require, under the Act,
premature disclosure in the registration statement (or the prospectus relating
thereto) of material, nonpublic information concerning the Company, its business
or prospects or any proposed material transaction involving the Company, (b)
that such premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or would make
the successful consummation by the Company of any such material transaction
significantly less likely; and (c) that it is therefore essential to suspend the
use by the Holders of any such registration statement (and the prospectus
relating thereto) for purposes of effecting offers or sales of Registrable
Securities pursuant thereto, then the right of the Holders to use any such
registration statement (and the prospectus relating thereto) for purposes of
effecting offers or sales of Registrable Securities pursuant thereto shall be
suspended until further notice by the Company (the "SUSPENSION PERIOD"). During
the Suspension Period, none of the Holders shall offer or sell any Registrable
Securities pursuant to or in reliance upon any such registration statement (or
the prospectus relating thereto). In the event the Company exercises the
suspension rights set forth herein (the "SUSPENSION RIGHT"), such suspension
will continue for such period of time reasonably necessary for disclosure to
occur at a time that is not materially detrimental to the Company or until such
time as the registration statement does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, each as determined in good faith by
the Company. The Company agrees to notify the Holders promptly upon termination
of the Suspension Right. Notwithstanding the foregoing, under no circumstances
shall the Company be entitled to exercise the Suspension Right for a period of
more than thirty (30) days during any twelve (12) month period.
1.13 LIMITATION OF LIABILITY. The Company shall not be liable to the
Holder for a failure to effect, or a delay in effecting, a registration
hereunder or a default in any other obligations under this Agreement arising out
of or relating to any failure to receive necessary consents from its independent
auditors or any internal review, investigation or similar activity by the
Company's Audit Committee.
1.14 TERMINATION OF REGISTRATION RIGHTS. The rights granted under this
Section 1 shall terminate upon the fourth anniversary of the date of this
Agreement. In addition, a Holder's registration rights shall terminate if all
Registrable Securities held by and issuable to such Holder may be sold under
Rule 144 during any ninety (90) day period.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any 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.
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2.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
2.3 SUBMISSION TO JURISDICTION; WAIVERS. Each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for the recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns will be
brought and determined in the Chancery or other courts of the State of Delaware,
and each of the parties hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of
the parties hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
(c) to the fullest extent permitted by applicable law, that (i) the suit, action
or proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action, or proceeding is improper and (iii) this Agreement,
or the subject matter hereof, may not be enforced in or by such courts and (d)
any right to trial by jury.
2.4 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.
2.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.6 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient or, if
not sent during normal business hours, then on the next business day, (c) three
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the address as set
forth on the signature page hereof or at such other address as such party may
designate by 10 days advance written notice to the other parties hereto.
2.7 EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
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2.8 AMENDMENTS AND WAIVERS. Any term 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
with the written consent of the Company and the Holders of sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder of any Registrable Securities then outstanding, each future
Holder of all such Registrable Securities, and the Company.
2.9 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
2.10 AGGREGATION OF STOCK. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
2.11 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (including
SCHEDULE A hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
2.12 ADDITIONAL SALES OF REGISTRABLE SECURITIES. Upon the sale of
additional Registrable Securities pursuant to Subscription Agreements executed
following the date hereof, the Company, without the prior action or consent of
any Investor, shall require such additional purchaser(s) to execute and deliver
this Agreement. Upon execution and delivery of this Agreement by the Company and
such additional purchaser, each such additional purchaser shall thereafter be
deemed an "Investor" for all purposes hereunder and SCHEDULE A shall be updated
in accordance therewith.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CRDENTIA CORP.,
a Delaware corporation
By: /S/ XXXXX X. XXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
Address: 00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INVESTORS:
By:
------------------------------------
Name:
Address:
-------------------------------
-------------------------------
SCHEDULE A
----------
SCHEDULE OF INVESTORS
Xxxxxxx Xxxx
Xxxx Xxxxxx, Xx.
Xxxx Xxxxxx, Xx.
Xxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxx
Xxxxxxx Family Trust U/A 3/11/87
Xxxxxxx X. XxXxxxxxx and Xxxx X. Xxxxx
Xxxxxx Properties, LLC
Xxxxx X. Xxxxxx
