REGISTRATION RIGHTS AGREEMENT
Exhibit 10.38
This Registration Rights Agreement (this “Agreement”) is made and entered into as of August
31, 2007, by and between Digital Angel Corporation, a Delaware corporation (the “Company”), and
Xxxxxxx Corporation, a Delaware corporation (the “Purchaser”).
This Agreement is made pursuant to the Security Agreement, dated as of the date hereof, by and
between the Purchaser and the Company (as amended, modified or supplemented from time to time, the
“Security Agreement”), and pursuant to the Note and the Warrants referred to therein.
The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in
the Security Agreement shall have the meanings given such terms in the Security Agreement. As used
in this Agreement, the following terms shall have the following meanings:
“Commission” means the Securities and Exchange Commission.
“Common Stock” means shares of the Company’s common stock, par value $0.005 per share.
“Effectiveness Date” means (i) with respect to the initial Registration Statement required to
be filed hereunder, a date no later than sixty (60) days following the Filing Date; provided,
however, if the Registration Statement is subject to a full review by the Commission, a date no
later than one hundred twenty (120) days following the Filing Date and (ii) with respect to each
additional Registration Statement required to be filed hereunder, a date no later than thirty (30)
days following the applicable Filing Date.
“Effectiveness Period” has the meaning set forth in Section 2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Filing Date” means, with respect to (i) the Registration Statement required to be filed
hereunder in respect of the shares of Common Stock issuable upon exercise of the Warrants issued as
of the date hereof, the earlier of (i) the closing of the transaction contemplated by that
Agreement and Plan of Reorganization dated August 8, 2007, between ADSX, Digital Angel Corporation,
and Digital Angel Acquisition Corp., or (ii) December 31, 2007, and (ii) the shares of Common Stock
issuable upon exercise of any Warrant issued after the date hereof, the date which is sixty (60)
days after the date of the issuance of such Warrant, and (iii) the shares of Common Stock issuable
to the Holder as a result of adjustments to the Exercise Price made pursuant to the Warrant or
otherwise
“Holder” or “Holders” means the Purchaser or any of its affiliates or transferees to the
extent any of them hold Registrable Securities, other than those purchasing Registrable Securities
in a market transaction.
“Indemnified Party” has the meaning set forth in Section 6(c).
“Indemnifying Party” has the meaning set forth in Section 6(c).
“Note” has the meaning set forth in the Security Agreement.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or to
the Company’s knowledge threatened.
“Prospectus” means the prospectus included in the 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 the 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 the shares of Common Stock issuable upon exercise of the
Warrants.
“Registration Statement” means each registration statement required to be filed hereunder,
including the Prospectus therein, amendments and supplements to such registration statement 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.
“Rule 144” means Rule 144 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 effect as such Rule.
“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 effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute.
“Security Agreement” has the meaning given to such term in the Preamble hereto.
“Trading Market” means any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market,
the NASDAQ National Markets System, the American Stock Exchange or the New York Stock Exchange.
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“Warrants” means the Common Stock purchase warrants issued in connection with the Security
Agreement, whether on the date hereof or thereafter.
2. Registration.
(a) On or prior to the Filing Date the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for a selling
stockholder resale offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith). The Company shall cause each
Registration Statement to become effective and remain effective as provided herein. The
Company shall use its reasonable commercial efforts to cause each Registration Statement to
be declared effective under the Securities Act as promptly as possible after the filing
thereof, but in any event no later than the Effectiveness Date. The Company shall use its
reasonable commercial efforts to keep each Registration Statement continuously effective
under the Securities Act until the date which is the earlier date of when (i) all
Registrable Securities have been sold or (ii) all Registrable Securities covered by such
Registration Statement may be sold immediately without registration under the Securities Act
and 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 (the “Effectiveness Period”).
(b) In no event will the Company be required (i) to pay a penalty for failure to cause
each Registration Statement to be declared effective or for failure to cause each
Registration Statement to remain effective; and (ii) to pay liquidating damages in
connection with the Warrants
(c) Within three business days of the Effectiveness Date, the Company shall cause its
counsel to issue a blanket opinion in the form attached hereto as Exhibit A, to the transfer
agent stating that the shares are subject to an effective registration statement and can be
reissued free of restrictive legend upon notice of a sale by the Purchaser and confirmation
by the Purchaser that it has complied with the prospectus delivery requirements, provided
that the Company has not advised the transfer agent orally or in writing that the opinion
has been withdrawn. Copies of the blanket opinion required by this Section 2(c) shall be
delivered to the Purchaser within the time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the provisions hereof
to effect the registration of any Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received from the
Commission, and use its reasonable commercial efforts to cause the Registration Statement to
become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to the Purchaser copies of all filings and
Commission letters of comment relating thereto;
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(b) prepare and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be necessary
to comply with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement and to keep such Registration
Statement effective until the expiration of the Effectiveness Period applicable to such
Registration Statement;
(c) furnish to the Purchaser such number of copies of the Registration Statement and
the Prospectus included therein (including each preliminary Prospectus) as the Purchaser
reasonably may request to facilitate the public sale or disposition of the Registrable
Securities covered by the Registration Statement;
(d) use its reasonable commercial efforts to register or qualify the Purchaser’s
Registrable Securities covered by such Registration Statement under the securities or “blue
sky” laws of such jurisdictions within the United States as the Purchaser may reasonably
request, provided, however, that the Company shall not for any such purpose be required to
qualify generally to transact business as a foreign corporation in any jurisdiction where it
is not so qualified or to consent to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed;
(f) promptly notify the Purchaser at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event of which
the Company has knowledge as a result of which the Prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and
(g) make available for inspection by the Purchaser and any attorney, accountant or
other agent retained by the Purchaser, all publicly available, non-confidential financial
and other records, pertinent corporate documents and properties of the Company, and cause
the Company’s officers, directors and employees to supply all publicly available,
non-confidential information reasonably requested by the attorney, accountant or agent of
the Purchaser.
4. Registration Expenses. All expenses relating to the Company’s compliance with Sections 2
and 3 hereof, including, without limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel and independent public accountants for the Company, fees and
expenses (including reasonable counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of transfer agents and
registrars, fees of, and disbursements incurred by, one counsel for the Holders, are called
“Registration Expenses”. All selling commissions applicable to the sale of
Registrable Securities, including any fees and disbursements of any special counsel to the
Holders beyond those included in Registration Expenses, are called “Selling Expenses.” The Company
shall only be responsible for all Registration Expenses.
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5. Obligations of Each Holder.
In connection with the registration of Registrable Securities pursuant to a Registration
Statement, each Holder shall:
(a) timely furnish to the Company in writing such information regarding itself and the
intended method of disposition of such Registrable Securities as the Company shall reasonably
request in order to effect the registration thereof;
(b) in the event of an underwritten offering of such Registrable Securities in which such
Holder participates pursuant to Section 8(e) hereof, enter into a customary and reasonable
underwriting agreement and execute such other documents (including without limitation “lock-up” and
indemnity agreements) as the Company and the managing underwriter for such offering may reasonably
request;
(c) notify the Company promptly in the event that any information supplied by such Holder in
writing for inclusion in such Registration Statement or related prospectus is untrue or nor omit to
state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they are made, not misleading; immediately discontinue any sale
or other disposition of such Registrable Securities pursuant to such Registration Statement until
the filing of an amendment or supplement to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading; and provide the Company with updates on such
information as may be appropriate to make such amendment or supplement effective for such purpose;
(d) comply with the requirements in Section 8(d) of this Agreement.
6. Indemnification.
(a) In the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless the Purchaser,
and its officers, directors and each other person, if any, who controls the Purchaser within
the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which the Purchaser, or such persons may become subject under the Securities
Act or otherwise, insofar as such losses, claims,
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damages or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the circurmstances in which
they were made, not misleading, and will reimburse the Purchaser, and each such person for
any reasonable legal or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to the extent
that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by or on behalf of the Purchaser or any such in writing
specifically for use in any such document, or (ii) a failure of such person to deliver or
cause to be delivered the final Prospectus contained in the Registration Statement and made
available by the Company.
(b) In the event of a registration of the Registrable Securities under the Securities
Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company,
and its officers, directors and each other person, if any, who controls the Company within
the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint
or several, to which the Company or such persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact which was furnished in writing by the Purchaser to the Company expressly
for use in (and such information is contained in) the Registration Statement under which
such Registrable Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circurmstances in which they were made, not
misleading, and will reimburse the Company and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Purchaser
will be liable in any such case if and only to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished in writing
to the Company by or on behalf of the Purchaser specifically for use in any such document.
Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to
indemnify any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection with any such
registration under the Securities Act.
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(c) Promptly after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof is to be
made against a party hereto obligated to indemnify such Indemnified Party (an “Indemnifying
Party”), notify the Indemnifying Party in writing thereof, but the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it may have to such
Indemnified Party other than under this Section 6(c) and shall only relieve it from any
liability which it may have to such Indemnified Party under this Section 6(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such action shall
be brought against any Indemnified Party and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory
to such Indemnified Party, and, after notice from the Indemnifying Party to such Indemnified
Party of its election so to assume and undertake the defense thereof, the Indemnifying Party
shall not be liable to such Indemnified Party under this Section 6(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the defense thereof; if
the Indemnified Party retains its own counsel, then the Indemnified Party shall pay all
fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the Indemnified Party and the Indemnifying Party
and the Indemnified Party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those available to the
Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party shall have the
right to select one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the Purchaser, or any
officer, director or controlling person of the Purchaser, makes a claim for indemnification
pursuant to this Section 6 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 6 provides for indemnification in such case,
or (ii) contribution under the Securities Act may be required on the part of the Purchaser
or such officer, director or controlling person of the Purchaser in circumstances for which
indemnification is provided under this Section 6; then, and in each such case, the Company
and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the Registration Statement bears to the public
offering price of all securities offered by such Registration Statement, provided,
however, that, in any such case, (A) the Purchaser will not be required to
contribute any amount in excess of the public offering price of all such securities offered
by it pursuant to such Registration Statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
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7. Representations and Warranties.
(a) The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act and, except with respect to certain matters which the Company has disclosed to the
Purchaser on Schedule 7, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it under the
Exchange Act. The Company has filed (i) its Annual Report on Form 10-K for its fiscal year
ended December 31, 2006 and (ii) its Quarterly Report on Form 10-Q for the fiscal quarters
ended March 31, 2007 and June 30, 2007 (collectively, the “SEC Reports”). Each SEC Report
was, at the time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates, contained any
untrue statement of a material fact or omitted 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. The financial statements of the Company
included in the SEC Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed) and fairly
present in all material respects the financial condition, the results of operations and the
cash flows of the Company and its subsidiaries, on a consolidated basis, as of, and for, the
periods presented in each such SEC Report.
(b) The Common Stock is listed or quoted, as applicable, for trading on the American
Stock Exchange and satisfies all requirements for the continuation of such listing or
quotation, as applicable, and the Company shall do all things necessary for the continuation
of such listing or quotation, as applicable. The Company has not received any notice that
its Common Stock will be delisted from or no longer be quoted on, as applicable, the
American Stock Exchange (except for prior notices which have been fully remedied) or that
the Common Stock does not meet all requirements for the continuation of such listing or
quotation, as applicable.
(c) Neither the Company, nor any of its affiliates, nor any person acting on its or
their behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would cause the offering
of the Securities pursuant to the Security Agreement to be integrated with prior offerings
by the Company for purposes of the Securities Act which would prevent the Company from
selling the Common Stock pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of its
affiliates or subsidiaries take any action or steps that would cause the offering of the
Securities to be integrated with other offerings.
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(d) The Warrants and the shares of Common Stock which the Purchaser may acquire
pursuant to the Warrants are all restricted securities under the Securities Act as of the
date of this Agreement. The Company will not issue any stop transfer order or other order
impeding the sale and delivery of any of the Registrable Securities at such time as such
Registrable Securities are registered for public sale or an exemption from registration is
available, except as required by federal or state securities laws.
(e) The Company understands the nature of the Registrable Securities issuable upon
exercise of the Warrant and recognizes that the issuance of such Registrable Securities may
have a potential dilutive effect. The Company specifically acknowledges that its obligation
to issue the Registrable Securities is binding upon the Company and enforceable regardless
of the dilution such issuance may have on the ownership interests of other shareholders of
the Company.
(f) Except for agreements made in the ordinary course of business, there is no
agreement that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange Act, the
breach of which could reasonably be expected to have a material and adverse effect on the
Company and its subsidiaries, or would prohibit or otherwise interfere with the ability of
the Company to enter into and perform any of its obligations under this Agreement in any
material respect.
(g) The Company will at all times have authorized and reserved a sufficient number of
shares of Common Stock for the full exercise of the Warrants.
(h) The Company shall provide written notice to each Holder of (i) the occurrence of
each Discontinuation Event (as defined below) and (ii) the declaration of effectiveness by
the SEC of each Registration Statement required to be filed hereunder, in each case within
three (3) business days of the date of each such occurrence and/or declaration.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
respective obligations under this 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 Agreement
will be entitled to specific performance of its rights under this Agreement. The failure of
the Company to cause each Registration Statement to become effective and to remain effective
as provided herein shall not convey to the Holder(s) any rights to the recovery of monetary
and or liquidated damages.
(b) No Piggyback on Registrations. Except as and to the extent specified in Schedule
7(b) 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 any Registration
Statement other than the Registrable Securities, and the Company shall not after the date
hereof enter into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously entered into
any agreement granting any registration rights with respect to any of its securities to any
person or entity that have not been fully satisfied.
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(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 the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of
a Discontinuation Event (as defined below), such Holder will forthwith discontinue
disposition of such Registrable Securities under the applicable Registration Statement until
such Holder’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The Company may
provide appropriate stop orders to enforce the provisions of this paragraph. For purposes
of this Agreement, a “Discontinuation Event” shall mean (i) 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 (the Company shall provide
true and complete copies thereof and all written responses thereto to each of the Holders);
(ii) any request by the Commission or any other Federal or state governmental authority for
amendments or supplements to such Registration Statement or Prospectus or for additional
information; (iii) the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) 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; and/or (v) the occurrence of
any event or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in such
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 such Registration Statement, Prospectus or other documents so that, in the case
of such Registration Statement or 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.
(e) Piggy-Back Registrations. If at any time during the applicable Effectiveness
Period there is not an effective Registration Statement covering all of the Registrable
Securities required to be covered during such Effectiveness Period 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
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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 stock option or other employee benefit
plans, then the Company shall send to each Holder written notice of such determination and,
if within ten (10) days after receipt of such notice, any such Holder shall so request in
writing, the Company shall use its commecially reasonable efforts to include in such
registration statement all or any part of such Registrable Securities such Holder requests
to be registered to the extent the Company may do so without violating registration rights
of others which exist as of the date of this Agreement, subject to customary underwriter
cutbacks applicable to all holders of registration rights and subject to obtaining any
required consent of any selling stockholder(s) to such inclusion under such registration
statement.
If, in connection with any underwritten public offering for the account of the Company
or for stockholders of the Company that have contractual rights to require the Company to
register shares of Common Stock, the managing underwriter(s) thereof shall impose a
limitation on the number of shares of Common Stock which may be included in a registration
statement because, in the judgment of such underwriter(s), marketing or other factors
dictate such limitation is necessary to facilitate such offering, then the Company shall be
obligated to include in the registration statement only such limited portion of the
Registrable Securities with respect to which each Holder has requested inclusion hereunder
as such underwriter(s) shall permit. Any exclusion of Registrable Securities shall be made
pro rata among the Holders seeking to include Registrable Securities in a registration
statement, in proportion to the number of Registrable Securities sought to be included by
such Holders; provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities, the holders of
which are not entitled to inclusion of such securities in the registration statement or are
not entitled to pro rata inclusion with the Registrable Securities; and provided, further,
that, after giving effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the right to
include such securities in the registration statement.
(f) Amendments and Waivers. The provisions of this 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 the Holders 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 certain Holders and that does
not directly or indirectly affect the rights of other Holders may be given by Holders of at
least a majority 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 notice or request hereunder may be given to the Company or the
Purchaser at the respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section 8(g). Any
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notice or request hereunder shall be given by registered or certified mail, return
receipt requested, hand delivery, overnight mail, Federal Express or other national
overnight next day carrier (collectively, “Courier”) or telecopy (confirmed by mail).
Notices and requests shall be, in the case of those by hand delivery, deemed to have been
given when delivered to any party to whom it is addressed, in the case of those by mail or
overnight mail, deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in the case of
a telecopy, when confirmed. The address for such notices and communications shall be as
follows:
| If to the Company: | ||
| Digital Angel Corporation | ||
| 0000 X. Xxxxxxxx Xxxxxx | ||
| Xxxxx 000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attention: Chief Financial Officer | ||
| Facsimile: 000-000-0000 | ||
| with a copies to: | ||
| Digital Angel Corporation | ||
| 0000 X. Xxxxxxxx Xxxxxx | ||
| Xxxxx 000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attention: Xxxxxxxx Xxxxxxxx, Vice President | ||
| and General Counsel | ||
| Facsimile: 000-000-0000 | ||
| Holland & Knight LLP | ||
| 000 Xxxxxxxx Xxxxxx, Xxxxx 0000 | ||
| Attention: Xxxx X. XxxXxxxxxxx | ||
| Facsimile: 000-000-0000 | ||
If to a Purchaser:
|
To the address set forth under such Purchaser name on the signature pages hereto. | |
If to any other Person who is |
||
then the registered Holder:
|
To the address of such Holder as it appears in the stock transfer books of the Company |
or such other address as may be designated in writing hereafter in accordance with this
Section 8(g) by such Person.
(h) Successors and Assigns. This 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 its rights or obligations
hereunder without the prior written consent of each Holder. Each Holder may assign
their respective rights hereunder in the manner and to the persons and entities as permitted
under the Warrants.
12
(i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is executed)
the same with the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. The Company hereby consents and agrees that the state or federal courts
located in the County of New York, State of New York shall have exclusion jurisdiction to
hear and determine any Proceeding between the Company, on the one hand, and the Purchaser,
on the other hand, pertaining to this Agreement or to any matter arising out of or related
to this Agreement; provided, that the Purchaser and the Company acknowledge that any
appeals from those courts may have to be heard by a court located outside of the County of
New York, State of New York, and further provided, that nothing in this
Agreement shall be deemed or operate to preclude the Purchaser from bringing a Proceeding in
any other jurisdiction to collect the obligations, to realize on the Collateral or any other
security for the obligations, or to enforce a judgment or other court order in favor of the
Purchaser. The Company expressly submits and consents in advance to such jurisdiction in
any Proceeding commenced in any such court, and the Company hereby waives any objection
which it may have based upon lack of personal jurisdiction, improper venue or forum non
conveniens. The Company hereby waives personal service of the summons, complaint and
other process issued in any such Proceeding and agrees that service of such summons,
complaint and other process may be made by registered or certified mail addressed to the
Company at the address set forth in Section 8(g) and that service so made shall be deemed
completed upon the earlier of the Company’s actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid. The parties hereto desire that their
disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the
best combination of the benefits of the judicial system and of arbitration, the parties
hereto waive all rights to trial by jury in any Proceeding brought to resolve any dispute,
whether arising in contract, tort, or otherwise between the Purchaser and/or the Company
arising out of, connected with, related or incidental to the relationship established
between then in connection with this Agreement. If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement, the Security Agreement or any other
Ancillary Agreement, then the prevailing party in such Proceeding shall be reimbursed by the
other party for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
13
(k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of this 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 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.
(m) Headings. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank;
signature page follows]
signature page follows]
14
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.
| DIGITAL ANGEL CORPORATION | XXXXXXX CORPORATION | |||||
| By: Laurus Capital Management, LLC, as investment manager |
||||||
By:
|
/s/ Xxxxxxxx X. Xxxxxx | By: | /s/ Xxxxx Grin | |||
Name:
|
Xxxxxxxx X. Xxxxxx | Name: | Xxxxx Grin | |||
Title:
|
Vice President and Acting Chief Financial Officer | Title: | Principal | |||
| Address for Notices: | ||||||
| Xxxxxxx Corporation | ||||||
| 000 Xxxxxx Xxxx | ||||||
| Xxxxx X | ||||||
| Xxxxx, XX 00000 | ||||||
| Facsimile: 000-000-0000 | ||||||
| with copy to: | ||||||
| Laurus Capital Management, LLC | ||||||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | ||||||
| Xxx Xxxx, XX 00000 | ||||||
| Attention: Portfolio Services | ||||||
| Facsimile: 000-000-0000 | ||||||
15
