Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
December 17, 2003 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 Investors are parties to certain Subscription
Agreements (the "Subscription Agreements"), dated beginning December 16,
2003, regarding the proposed sale and issuance of shares of the Company's
Series A Preferred Stock (the "Series A Preferred") to the Investors (the
"Preferred Stock Financing"); and
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 A Preferred.
Agreement
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and the
Subscription Agreements, 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 1.11 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.
(f) The term "Registrable Securities" means (i) the Common Stock
of the Company (the "Common Stock") issued to the Investors pursuant to
conversion of the Series A 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, at any time after the date that
is four (4) month after the date of this Agreement, the Company shall
receive from the Holders of thirty-three and one-third percent (33 1/3%) 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
or (B) if less than thirty-three and one-third percent (33 1/3%) of the
then outstanding Registrable Securities will be registered.
(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. If the Holders at any time intend to
distribute all or a part of the Registrable Securities covered by the
registration statement filed pursuant to this Section 1.2 by means of an
underwriting, they shall so advise the Company and the Company shall
promptly notify the other Holders of such underwriting. The Company
(together with all Holders proposing to distribute their securities
pursuant to the underwriting) shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected 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. The Company
agrees to file any amendments or supplements to the registration statement
necessary in order to permit any underwritten offering.
(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 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 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
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"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
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obligations to prepare a prospectus amendment or supplement as above
provided in this Section 1.4(g)).
(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.
1.5 Furnish Information.
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(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 subsection 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 Underwiriting 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
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aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as
defined in this sentence.
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 subsection 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 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
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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 subsection 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
subsection 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 subsection 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 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
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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 subsection 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 ▇▇▇▇ ▇▇▇. 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.
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
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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, except as expressly provided in 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.
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
11
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 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
dditional purchaser shall thereafter be deemed an "Investor" for all
purposes hereunder and Schedule A shall be updated in accordance therewith.
2.10 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.
2.11 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.
2.12 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.
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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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
13
INVESTORS:
MEDCAP PARTNERS L.P.
BY: MEDCAP MANAGEMENT & RESEARCH LLC
ITS: GENERAL PARTNER
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇
Name: C. ▇▇▇▇ ▇▇▇▇▇
Title: Managing Member
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
14
INVESTORS:
SF CAPITAL PARTNERS, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Authorized Signatory
Address: c/o Staro Asset Management, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE A
SCHEDULE OF INVESTORS
MedCap Partners, L.P.
SF Capital Partners, Ltd.
16
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