REGISTRATION RIGHTS AGREEMENT
Exhibit
4.1
This
Registration Rights Agreement (this “Registration
Rights Agreement”)
is
made and entered into as of March 30, 2007 by and between Sequiam Corporation,
a
California corporation (the “Company”),
and
Biometrics Investors, L.L.C., a Delaware limited liability company
(“Biometrics”).
This
Registration Rights Agreement is made pursuant to the Agreement dated as of
the
date hereof between the Company and Biometrics (the “Agreement”).
The
Company and Biometrics hereby agree as follows:
1.
Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Agreement shall have the meanings given such terms in the Agreement. As used
in
this Registration Rights Agreement, the following terms shall have the following
meanings:
“Advice”
shall
have the meaning set forth in Section 6(d).
“Demand
Date”
means
the date on which a written demand for the filing of a Registration Statement
is
made pursuant to Section 2(a).
“Demand
Registration” shall
have the meaning set forth in Section
2(a).
“Effectiveness
Date”
means,
with respect to each Registration Statement required to be filed hereunder,
the
90th
calendar
day following the Demand Date (the 120th
calendar
day in the case of a review by the Commission of such Registration Statement);
provided,
however,
in the
event the Company is notified by the Commission that a Registration Statement
will not be reviewed or is no longer subject to further review and comments,
the
Effectiveness Date as to such Registration Statement shall be the 5th
Trading
Day following the date on which the Company is so notified if such date precedes
the dates required above.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(c).
“Filing
Date”
means
30th
calendar
day following the Demand Date.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Losses”
shall
have the meaning set forth in Section 5(a).
“Plan
of Distribution”
shall
have the meaning set forth in Section 2(c).
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means,
as of the date in question, (i) all shares of Company common stock issuable
upon
exercise of the Initial Warrants and the Additional Warrants, (ii) any
additional shares issuable in connection with any anti-dilution provisions
associated with the Initial Warrants and the Additional Warrants (without giving
effect to any limitations on exercise set forth in the Initial Warrants and
the
Additional Warrants) and (iii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the Initial Warrants and the Additional Warrants.
“Registration
Statement”
means
any registration statement required to be filed under Section 2(a) and 2(b)
hereof, including the Prospectus, amendments and supplements to such
registration statement(s) or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or
deemed to be incorporated by reference in such registration statement(s).
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
“Selling
Shareholder Questionnaire”
shall
have the meaning set forth in Section 3(a).
2.
Registration
(a)
Subject to the other provisions set forth in this Agreement, at any time
following the date hereof, the Holders of at least 25% of the Registrable
Securities may request registration under the Securities Act of all or part
of
their Registrable Securities. Each request for a Demand Registration shall
specify the approximate number of Registrable Securities requested to be
registered. Within ten (10) days after receipt of any such request, the Company
will give written notice of such requested registration to all other Holders
and
will include in such registration all Registrable Securities with respect to
which the Company has received written requests for inclusion therein within
fifteen (15) days after the receipt of the Company’s notice. All registrations
requested pursuant to this Section 2(a) are referred to herein as “Demand
Registrations”
for
an
offering to be made on a continuous basis pursuant to Rule 415.
(b)
The
Holders will be entitled to request an unlimited number of Demand Registrations
until such time as all of the Registrable Securities are sold by the Holders
pursuant to a Registration Statement, provided that the Holders shall not
request a Demand Registration until the later of (i) six months after the
effective date of any prior Registration Statement, or (ii) sixty days after
all
registrable securities registered pursuant to any prior Registration Statement
have been sold. The total number of shares of Registrable Securities that may
be
registered by the Holders or any other person with respect to any Demand
Registration shall not exceed the maximum number of shares that the Commission
will permit, at the time of the Demand Registration, to be registered pursuant
to Rule 415 for an at the market offering to be made on a continuous basis
by or
on behalf of a person or persons other than the Company or any company that
is a
parent or subsidiary of the Company.
(c)
Each
Registration Statement shall be on Form SB-2 (except if the Company is not
then
eligible to register for resale the Registrable Securities on Form SB-2, in
which case such registration shall be on another appropriate form in accordance
herewith) and shall contain a “Plan
of Distribution”
satisfactory in form and substance to the Holders of at least 85% of the
Registrable Securities included in such Registration Statement. Subject to
the
terms of this Registration Rights Agreement, the Company shall use its best
efforts to cause a Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event prior to the applicable Effectiveness Date, and shall use its best efforts
to keep such Registration Statement continuously effective under the Securities
Act until (i) all Registrable Securities covered by such Registration Statement
have been sold, or may be sold without volume restrictions pursuant to Rule
144(k), as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders, or (ii) the holders of at least 85%
of
the Registrable Securities covered by such Registration Statement that remain
unsold consent in writing to the withdrawal of such Registration Statement
(the
“Effectiveness
Period”).
The
Company shall request effectiveness of a Registration Statement as of 5:00
pm
Eastern Time on a Trading Day. The Company shall immediately notify the Holders
via facsimile of the effectiveness of a Registration Statement on the same
Trading Day that the Company confirms effectiveness with the Commission, which
shall be the date requested for effectiveness of a Registration Statement.
The
Company shall, by 9:30 am Eastern Time on the Trading Day after the Effective
Date (as defined in the Agreement), file a final Prospectus with the Commission
as required by Rule 424.
3.
Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a)
Not
less than 5 Trading Days prior to the filing of each Registration Statement
and
not less than 1 Trading Day prior to the filing of any related Prospectus or
any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall, (i) furnish to each Holder copies of all such documents proposed to
be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders, and
(ii) cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that, the Company
is
notified of such objection in writing no later than 5 Trading Days after the
Holders have been so furnished copies of a Registration Statement or 1 Trading
Day after the Holders have been so furnished copies of any related Prospectus
or
amendment or supplement thereto. Each Holder agrees to furnish to the Company
a
completed Questionnaire in the form attached to this Registration Rights
Agreement as Annex A (a “Selling
Shareholder Questionnaire”)
not
less than 2 Trading Days prior to each Filing Date or by the end of the fourth
Trading Day following the date on which such Holder receives draft materials
in
accordance with this Section.
(b)
(i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities in accordance with the terms and conditions of this
Registration Rights Agreement; (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement (subject to the terms
of
this Registration Rights Agreement), and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
to
any comments received from the Commission with respect to a Registration
Statement or any amendment thereto and as promptly as reasonably possible
provide the Holders true and complete copies of all correspondence from and
to
the Commission relating to a Registration Statement (provided that the Company
may excise any information contained therein which would constitute material
non-public information as to any Holder which has not executed a confidentiality
agreement with the Company); and (iv) comply in all material respects with
the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this
Registration Rights Agreement) with the intended methods of disposition by
the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c)
Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been
made)
as promptly as reasonably possible (and, in the case of (i)(A) below, not less
than 1 Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than 1 Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement; and (C) with respect to a Registration Statement or
any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or
for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of
the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any
Proceeding for such purpose; (v) of the occurrence of any event or passage
of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus,
as
the case may be, it will not contain 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, in light of the circumstances under which they
were
made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes
may
be material and that, in the determination of the Company, makes it not in
the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus; provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided,
further,
notwithstanding each Holder’s agreement to keep such information confidential,
the Holders make no acknowledgement that any such information is material,
non-public information.
(d)
Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of a Registration Statement,
or
(ii) any suspension of the qualification (or exemption from qualification)
of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e)
Furnish to each Holder, without charge, at least one conformed copy of each
such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
(f)
Subject to the terms of this Registration Rights Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of
the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to Section
3(c).
(g)
If
NASDR Rule 2710 requires any broker-dealer to make a filing prior to executing
a
sale by a Holder, the Company shall (i) make an Issuer Filing with the NASDR,
Inc. Corporate Financing Department pursuant to proposed NASDR Rule
2710(b)(10)(A)(i), (ii) respond within 5 Trading Days to any comments received
from NASDR in connection therewith, and (iii) pay the filing fee required in
connection therewith.
(h)
Prior
to any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale
by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax
in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.
(i)
If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may
request.
(j)
Upon
the occurrence of any event contemplated by this Section 3, as promptly as
reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
shareholders of the premature disclosure of such event, prepare a supplement
or
amendment, including a post-effective amendment, to a Registration Statement
or
a supplement to the related Prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain 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, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(c) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best efforts
to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this
Section 3(j) to suspend the availability of a Registration Statement and
Prospectus for a period not to exceed 60 calendar days (which need not be
consecutive days) in any 12 month period.
(k)
Comply with all applicable rules and regulations of the Commission.
(l)
The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of Common Shares beneficially owned by such Holder
and, if required by the Commission, the natural persons thereof that have voting
and dispositive control over the Shares.
4.
Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Registration Rights Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required
to be
made with any Trading Market on which the Common Shares is then listed for
trading, (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with respect
to any filing that may be required to be made by any broker through which a
Holder intends to make sales of Registrable Securities with NASD Regulation,
Inc. Pursuant to the NASD Rule 2710, so long as the broker is receiving no
more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is reasonably requested by the holders of a majority
of
the Registrable Securities included in a Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Registration Rights Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Registration
Rights Agreement (including, without limitation, all salaries and expenses
of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any broker or
similar commissions of any Holder or, except to the extent provided for in
the
Transaction Documents, any legal fees or other costs of the
Holders.
5.
Indemnification
(a)
Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Registration Rights
Agreement, indemnify and hold harmless each Holder, the officers, directors,
members, partners, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure
to
perform under a margin call of Common Shares), investment advisors and employees
(and any other Persons with a functionally equivalent role of a Person holding
such titles, notwithstanding a lack of such title or any other title) of each
of
them, each Person who controls any such Holder (within the meaning of Section
15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, shareholders, partners, agents and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from
and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”),
as
incurred, arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, or (2) any violation or alleged violation by
the
Company of the Securities Act, Exchange Act or any state securities law, or
any
rule or regulation thereunder, in connection with the performance of its
obligations under this Registration Rights Agreement, except to the extent,
but
only to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it is being understood that the Holder has approved the Plan of Distribution)
or (ii) in the case of an occurrence of an event of the type specified in
Section 3(c)(iii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder
of
the Advice contemplated in Section 6(d). The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising
from
or in connection with the transactions contemplated by this Registration Rights
Agreement of which the Company is aware.
(b)
Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based
solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus,
or
any form of prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion
in
such Registration Statement or such Prospectus or (ii) to the extent that such
information relates to such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus
or such form of Prospectus or in any amendment or supplement thereto or (ii)
in
the case of an occurrence of an event of the type specified in Section
3(c)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d). In no event shall the liability of any selling
Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving
rise
to such indemnification obligation.
(c)
Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Registration Rights Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist
if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding.
Subject
to the terms of this Registration Rights Agreement, all reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to
the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the
Indemnified Party, as incurred, within 10 Trading Days of written notice thereof
to the Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined to be not entitled to indemnification hereunder.
(d)
Contribution.
If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses,
then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Registration Rights Agreement, any reasonable attorneys’ or other fees
or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if
the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud
by
such Holder.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6.
Miscellaneous
(a)
Remedies.
In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Registration Rights Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Registration Rights Agreement, including
recovery of damages, will be entitled to specific performance of its rights
under this Registration Rights Agreement. The Company and each Holder agree
that
monetary damages would not provide adequate compensation for any losses incurred
by reason of a breach by it of any of the provisions of this Registration Rights
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.
(b)
No
Piggyback on Registrations.
Except
as set forth on Schedule
6(b)
attached
hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
in the Registration Statements required to be filed under Section 2 other than
the Registrable Securities.
(c)
Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.
(d)
Discontinued
Disposition.
Each
Holder agrees by its acquisition of Registrable Securities that, upon receipt
of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(c)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until
it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable.
(e)
Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and,
if
within 15 days after the date of such notice, any such Holder shall so request
in writing, the Company shall include in such registration statement all or
any
part of such Registrable Securities such Holder requests to be registered;
provided,
however,
that,
the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a then
effective Registration Statement.
(f)
Amendments
and Waivers.
The
provisions of this Registration Rights Agreement, including the provisions
of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless
the
same shall be in writing and signed by the Company and each Holder of the then
outstanding Registrable Securities. Notwithstanding the foregoing, a waiver
or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all
of
the Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(g)
Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be delivered as set forth in the Agreement.
(h)
Successors
and Assigns.
This
Registration Rights Agreement shall inure to the benefit of and be binding
upon
the successors and permitted assigns of each of the parties and shall inure
to
the benefit of each Holder. The Company may not assign (except by merger) its
rights or obligations hereunder without the prior written consent of all of
the
Holders of the then-outstanding Registrable Securities. Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted
under the Agreement.
(i)
No
Inconsistent Agreements.
Neither
the Company nor any of its Subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its Subsidiaries, on or after the date of this
Registration Rights Agreement, enter into any agreement with respect to its
securities, that would have the effect of impairing the rights granted to the
Holders in this Registration Rights Agreement or otherwise conflicts with the
provisions hereof. Except as set forth on Schedule
6(i),
neither
the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.
(j)
Execution
and Counterparts.
This
Registration Rights Agreement may be executed in two or more counterparts,
all
of which when taken together shall be considered one and the same agreement
and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing
(or
on whose behalf such signature is executed) with the same force and effect
as if
such facsimile or “.pdf” signature page were an original thereof.
(k)
Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Registration Rights Agreement shall be determined in accordance with
the
provisions of the Agreement.
(l)
Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any other remedies
provided by law.
(m)
Severability.
If any
term, provision, covenant or restriction of this Registration Rights Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means
to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
that
may be hereafter declared invalid, illegal, void or unenforceable.
(n)
Headings.
The
headings in this Registration Rights Agreement are for convenience only, do
not
constitute a part of this Registration Rights Agreement and shall not be deemed
to limit or affect any of the provisions hereof.
(o)
Independent
Nature of Holders’ Obligations and Rights.
The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at
any
closing, and no action taken by any Holder pursuant hereto or thereto, shall
be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Registration Rights Agreement. Each Holder
shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Registration Rights Agreement, and
it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
(Signature
page continues on the next page)
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
COMPANY:
SEQUIAM
CORPORATION,
a
California corporation
By:
Name:
Title:
BIOMETRICS:
BIOMETRICS
INVESTORS, L.L.C.,
a
Delaware limited liability company
By:
Name:
Xxxxx Xxxxx
Title:
Manager
LIST
OF SCHEDULES
6(b) - List
of
entities that may
include securities of the Company in the Registration Statement(s)
6(i) - List
of
entities with which the
Company and/or its subsidiaries have previously entered into agreement(s)
granting registration rights with respect to any of the Company and/or the
Company’s subsidiaries’ securities that have not been satisfied in
full.
SCHEDULE
6(b)
SCHEDULE
6(i)
ANNEX
A
SEQUIAM
CORPORATION
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common shares, par value $.001 per share (the
“Common
Shares”),
of
Sequiam Corporation, a California corporation (the “Company”)
(the
“Registrable
Securities”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
registration statement on Form SB-2 (the “Registration
Statement”)
for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities
Act”),
of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of March 30, 2007 (the “Registration
Rights Agreement”),
by
and between the Company and Biometrics named therein. A copy of the Registration
Rights Agreement is available from the Company upon request at the address
set
forth below. All capitalized terms not otherwise defined herein shall have
the
meanings ascribed thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling
Securityholder”)
of
Registrable Securities hereby elects to include the Registrable Securities
owned
by it and listed below in Item 3 (unless otherwise specified under such Item
3)
in the Registration Statement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1.
Name.
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(a)
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Full
Legal Name of Selling Securityholder
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(b)
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Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
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(c)
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Full
Legal Name of Natural Control Person (which means a natural person
who
directly or indirectly alone or with others has power to vote or
dispose
of the securities covered by the questionnaire):
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2.
Address for Notices to Selling Securityholder:
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Telephone:
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Fax:
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Contact
Person:
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3.
Beneficial Ownership of Registrable Securities:
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(a)
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Type
and Number of Registrable Securities beneficially owned (not including
the
Registrable Securities that are issuable pursuant to the
Agreement):
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4.
Broker-Dealer Status:
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(a)
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Are
you a broker-dealer?
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Yes
o No
o
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(b)
|
If
“yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company.
|
Yes
o No
o
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Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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(c)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
o No
o
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(d)
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If
you are an affiliate of a broker-dealer, do you certify that you
bought
the Registrable Securities in the ordinary course of business, and
at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with any
person
to distribute the Registrable
Securities?
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Yes
o No
o
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Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
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(a)
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Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
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6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
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The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
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Dated:
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Beneficial
Owner:
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By:
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Name:
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Title:
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PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
