EXHIBIT 4.2
IDENTIX INCORPORATED SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (this "Agreement") is made and entered into
as of June 11, 2001, by and among IDENTIX INCORPORATED, a Delaware corporation
(the "Company"), and the purchasers listed on Schedule A attached hereto
(collectively, the "Purchasers" and individually, a "Purchaser").
1. Authorization Of Sale Of The Shares
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of up to six million (6,000,000) shares (the "Shares") of
common stock, par value $0.01 per share (the "Common Stock"), of the Company.
2. Agreement To Sell And Purchase The Shares
2.1 Purchase and Sale
Subject to the terms and conditions of this Agreement, each Purchaser
severally agrees to purchase, and the Company agrees to sell and issue to each
Purchaser, at the Closing (as defined below) that number of Shares set forth
opposite such Purchaser's name on Schedule A attached hereto.
2.2 Purchase Price
The purchase price of each Share (the "Per Share Price") shall be $6.75.
The Company shall not, during the period beginning on the date of this
Agreement and ending ninety (90) days after the Closing Date (as defined below),
without adjusting the price per Share hereunder accordingly, sell (i) Shares at
a price per Share of less than the Per Share Price, or (ii) options, warrants or
any other securities that can be converted into, or otherwise exchanged for,
shares of the Company's common stock at a conversion, exchange or exercise price
per Share of less than the Per Share Price; except for (A) the shares of the
Company's Common Stock (or shares convertible into shares of Common Stock)
issuable upon exercise of any issued and outstanding warrants or options and (B)
shares issued or issuable to the Company's employees, consultants, directors and
advisors pursuant to a plan or arrangement approved by the Company's Board of
Directors prior to the date of this Agreement, provided that, consistent with
Section 7.7, the Company shall not grant from the date hereof during such 90 day
period any stock options with an exercise price that is less than 100% of the
fair market value of the underlying stock on the date of the grant. In the event
the Company shall, during the period beginning on the date of this Agreement and
ending ninety (90) days after the Closing Date, sell any shares of the Company's
common stock at, or any instruments that can be converted into or otherwise
exchanged for the Company's common stock (the "Subsequent Sale")
1.
exercisable at, a price per Share (the "Subsequent Purchase Price") of less than
the Per Share Price, the Company shall, within ten (10) business days of the
Subsequent Sale, at the option of the Purchaser, either (1) pay to the Purchaser
a cash amount equal to the number of Shares times the difference between the Per
Share Price and the Subsequent Purchase Price or (2) issue to the Purchaser that
number of shares of Common Stock that is equal to (A) the number of shares of
Common Stock that Purchaser would have purchased at Closing if the Per Share
Price had been equal to the Subsequent Purchase Price, less (B) the number of
Shares actually purchased by Purchaser at the Per Share Price at the Closing.
3. Delivery Of The Shares At The Closing
(a) The completion of the purchase and sale of the Shares (the "Closing")
shall occur at the offices of the Company, at 000 Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx at 9:00 a.m. local time on June 13, 2001 or such other time and date
as may be agreed by the parties (the "Closing Date").
(b) At the Closing, the Company shall authorize its transfer agent (the
"Transfer Agent") to issue to each Purchaser one or more stock certificates
registered in the name of such Purchaser, or in such nominee name(s) as
designated by such Purchaser in writing, representing the number of Shares set
forth in Section 2 above and bearing an appropriate legend referring to the fact
that the Shares were sold in reliance upon the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and Rule 506 under the Securities Act. The Company will
deliver one or more certificates representing the Shares (the "Certificates")
against delivery of payment for the Shares by the Purchasers. Prior to the
Purchasers' delivery of payment for the Shares, the Company will deliver via
facsimile a copy of the Certificates to be delivered upon Closing to the office
of the Purchasers (at the fax number indicated on the signature pages attached
hereto).
(c) The Company's obligation to complete the purchase and sale of the
Shares shall be subject to the following conditions, any one or more of which
may be waived by the Company:
(i) receipt by the Company from stockholders holding rights to
require the Company to register the sale of any securities owned by such holder
in the Registration Statement (as defined below) of waivers of such rights
(including the waiver of any notice requirements related to such rights);
(ii) receipt by the Company of same-day funds in the full amount of
the purchase price for the Shares being purchased under this Agreement; and
(iii) the accuracy in all material respects of the representations
and warranties made by the Purchasers and the fulfillment in all material
respects of those undertakings of the Purchasers to be fulfilled before the
Closing.
(d) The Purchasers' obligations to accept delivery of such stock
certificates and to pay for the Shares evidenced by the certificates shall be
subject to the following conditions, any one or more of which may be waived by a
Purchaser with respect to such Purchaser's obligation:
2.
(i) the representations and warranties made by the Company in this
Agreement shall be accurate in all material respects and the undertakings of the
Company shall have been fulfilled in all material respects on or before the
Closing;
(ii) the Company shall have delivered to the Purchasers a
certificate executed by the chairman of the board or president and the chief
financial or accounting officer of the Company, dated the Closing Date, in form
and substance reasonably satisfactory to the Purchasers, to the effect that the
representations and warranties of the Company set forth in Section 4 hereof are
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date, and that the Company has complied with all the
agreements and satisfied all the conditions in this Agreement on its part to be
performed or satisfied on or before the Closing Date; and
(iii) the Company shall have delivered to Purchasers a legal opinion
in substantially the form attached hereto as Exhibit A.
4. Representations, Warranties And Covenants Of The Company
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants to the Purchasers as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 Organization and Qualification
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company.
4.2 Capitalization
(a) The capitalization of the Company as of the date hereof is set forth
on Schedule 4.2(a) attached hereto, including the authorized capital stock, the
number of shares issued and outstanding, the number of shares issuable and
reserved for issuance pursuant to the Company's stock option plans, the number
of shares issuable and reserved for issuance pursuant to securities exercisable
for, or convertible into or exchangeable for any shares of capital stock. All of
such outstanding shares of the Company's capital stock have been validly issued,
fully paid and nonassessable and have not been issued in violation of or are not
otherwise subject to any preemptive or other similar rights.
(b) Except as set forth in Schedule 4.2(a), as of the date of this
Agreement, there are no outstanding subscriptions, options, warrants,
convertible or exchangeable securities or other rights granted to or by the
Company to purchase shares of Common Stock or other securities of
3.
the Company and there are no commitments, plans or arrangements to issue any
shares of Common Stock or any security convertible into or exchangeable for
Common Stock. Notwithstanding the foregoing, the Purchaser acknowledges that the
Company has engaged a placement agent and, as of the date hereof, is
contemplating raising additional funds through the issuance of additional
Company securities.
4.3 Issuance, Sale and Delivery of the Shares
(a) The Shares have been duly authorized for issuance and sale to the
Purchasers pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set
forth in this Agreement, will be validly issued and fully paid and nonassessable
and free and clear of all pledges, liens and encumbrances. The certificates
evidencing the Shares are in due and proper form under Delaware law.
(b) The issuance of the Shares is not subject to preemptive or other
similar rights. No further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the issuance and sale of
the Shares to be sold by the Company as contemplated in this Agreement.
(c) Subject to the accuracy of the Purchasers' representations and
warranties in Section 5 of this Agreement, the offer, sale, and issuance of the
Shares in conformity with the terms of this Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act and
from the registration or qualification requirements of the laws of any
applicable state or United States jurisdiction.
4.4 Financial Statements
The financial statements included (as exhibits or otherwise) in the Company
Documents (as defined below) present fairly the financial position of the
Company as of the dates indicated and the results of their operations for the
periods specified. Except as otherwise stated in such Company Documents, such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and any supporting
schedules included with the financial statements present fairly the information
stated in the financial statements. The financial and statistical data set forth
in the Company Documents were prepared on an accounting basis consistent with
such financial statements.
4.5 No Material Adverse Change
Since March 31, 2001,
(a) there has been no material adverse change or any development involving
a prospective material adverse change in or affecting the condition, financial
or otherwise, or in the earnings, assets, business affairs or business prospects
of the Company, whether or not arising in the ordinary course of business;
(b) there have been no transactions entered into by the Company other than
those in the ordinary course of business, which are material with respect to the
Company; and
4.
(c) there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
4.6 Environmental
To the Company's best knowledge, except as disclosed in the Company
Documents (i) there is no environmental liability, nor factors reasonably likely
to give rise to any environmental liability, affecting any of the properties of
the Company that, individually or in the aggregate, would have a material
adverse effect on the business, operations, properties or financial conditions
of the Company and (ii) the Company has not violated any environmental law
applicable to it now or previously in effect, other than such violations that,
individually or in the aggregate, have not had and will not have a material
adverse effect on the business, operations, properties or financial conditions
of the Company.
4.7 No Defaults
The Company is not in violation of its certificate of incorporation or
bylaws or in material default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust, or other instrument or material agreement to which the
Company is a party or by which it may be bound, or to which any of the property
or assets of the Company is subject.
4.8 Labor Matters
No labor dispute with the employees of the Company exists or, to the best
knowledge of the Company, is imminent, other than ordinary course disputes with
individual employees that will not have, individually or in the aggregate, a
material adverse effect on the business, operations, properties or financial
conditions of the Company.
4.9 No Actions
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company which,
singly or in the aggregate, might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, or which, singly or in the aggregate, might
materially and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement, nor, to the
best knowledge of the Company, is there any reasonable basis therefor. The
Company is not in default with respect to any judgment, order or decree of any
court or governmental agency or instrumentality which, singly or in the
aggregate, would have a material adverse effect on the assets, properties or
business of the Company.
4.10 Intellectual Property
To the best knowledge of the Company, the Company owns or is licensed to
use all patents, trademarks, trade names, service marks, copyrights, licenses,
permits, know-how (including trade secrets) and other similar rights and
proprietary knowledge (collectively,
5.
"Intangibles") necessary for the conduct of its business as now being conducted
and as proposed to be conducted. To the best knowledge of the Company, the
Company is neither infringing nor in conflict with any other person with respect
to any currently issued and validly existing Intangibles which, individually or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the business, operations, properties or
financial conditions of the Company. Except as set forth on Exhibit B, the
Company has not received written notice that it is infringing upon any currently
issued and validly existing third party Intangibles. The Company has not entered
into any consent, indemnification, forbearance to xxx or settlement agreements
with respect to the validity of the Company's ownership or right to use its
Intangibles and, to the knowledge of the Company, there is no basis for any such
claim to be successful. To the best knowledge of the Company, its Intangibles
are valid and enforceable, and no registration relating thereto has lapsed,
expired or been abandoned or canceled or is the subject of cancellation, and all
applications therefor are pending and in good standing. The Company has
complied, in all material respects, with its contractual obligations relating to
the protection of the Intangibles used pursuant to licenses. Except as set forth
on Exhibit B, to the Company's knowledge, no person is infringing on or
violating the Intangibles owned or used by the Company.
4.11 Permits
The Company possesses and is operating in compliance with all material
licenses, certificates, consents, authorities, approvals and permits from all
state, federal, foreign and other regulatory agencies or bodies necessary to
conduct the businesses now operated by it, and the Company has not received any
notice of proceedings relating to the revocation or modification of any such
permit or any circumstance which would lead it to believe that such proceedings
are reasonably likely which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, assets, business affairs
or business prospects of the Company.
4.12 Due Execution, Delivery and Performance
(a) This Agreement has been duly executed and delivered by the Company
and, assuming due execution and delivery by the Purchasers, constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement, including the sale, issuance and
delivery of the Shares, (i) have been duly authorized by all necessary corporate
action on the part of the Company, its directors and stockholders; (ii) will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust or
other instrument or agreement to which the Company is a party or by which it may
be bound, or to which any of the property or assets of the Company is subject;
(iii) will not trigger anti-dilution rights or other rights to acquire
additional equity securities of the Company; and (iv) will not result in any
violation of the provisions of the
6.
articles of incorporation or bylaws of the Company or any applicable statute,
law, rule, regulation, ordinance, decision, directive or order.
4.13 Properties
The Company has good and marketable title to its properties, free and clear
of all material security interests, mortgages, pledges, liens, charges,
encumbrances and claims of record. The properties of the Company are, in the
aggregate, in good repair (reasonable wear and tear excepted), and suitable for
their respective uses. Any real property held under lease by the Company is held
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company.
The Company owns or leases all such properties as are necessary to its business
or operations as now conducted.
4.14 Compliance
The Company has conducted and is conducting its business in compliance with
all applicable Federal, state, local and foreign statutes, laws, rules,
regulations, ordinances, codes, decisions, decrees, directives and orders,
except where the failure to do so would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Company.
4.15 Use of Proceeds; Investment Company
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes, including, without
limitation, mergers and acquisitions. The Company is not now, and after the sale
of the Shares under this Agreement and under all other agreements and the
application of the net proceeds from the sale of the Shares described in the
proceeding sentence will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
4.16 Prior Offerings
All offers and sales of capital stock of the Company before the date of
this Agreement were at all relevant times duly registered or exempt from the
registration requirements of the Securities Act and were duly registered or
subject to an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
4.17 Taxes
The Company has filed all material tax returns required to be filed, which
returns are true and correct in all material respects, and the Company is not in
default in the payment of any material taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
4.18 Other Governmental Proceedings
7.
To the Company's knowledge, there are no rulemaking or similar proceedings
before any Federal, state, local or foreign government bodies that involve or
affect the Company, which, if the subject of an action unfavorable to the
Company, could involve a prospective material adverse change in or effect on the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of the Company.
4.19 Non-Competition Agreements
The Company has not received written notice that any full-time employee,
consultant or scientific advisor of the Company is in violation of any non-
competition, non-disclosure, confidentiality or similar agreement.
4.20 Transfer Taxes
On the Closing Date, all stock transfer or other taxes (other than income
taxes) that are required to be paid in connection with the sale and transfer of
the Shares to be sold to the Purchasers under this Agreement will be, or will
have been, fully paid or provided for by the Company and all laws imposing such
taxes will be or will have been fully complied with.
4.21 Insurance
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.22 Governmental/ Regulatory Consents
No registration, authorization, approval, qualification or consent with or
required by any court or governmental/ regulatory authority or agency is
necessary in connection with the execution and delivery of this Agreement or the
offering, issuance or sale of the Shares under this Agreement.
4.23 Securities and Exchange Commission Filings
The Company has timely filed with the Securities and Exchange Commission
(the "Commission") all documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act.")
4.24 Additional Information
The Company represents and warrants that the information contained in the
following documents (the "Company Documents"), which will be provided to
Purchaser before the Closing, is or will be true and correct in all material
respects as of their respective final dates:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2000;
8.
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended September 30, 2000 and December 31, 2000;
(c) the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders; and
(d) all other documents, if any, filed by the Company with the Commission
since December 31, 2000 pursuant to the reporting requirements of the Securities
Exchange Act.
4.25 Contracts
The contracts described in the Company Documents or incorporated by
reference therein are in full force and effect on the date hereof, except for
contracts the termination or expiration of which would not, singly or in the
aggregate, have a material adverse effect on the business, properties or assets
of the Company. Neither the Company nor, to the best knowledge of the Company,
any other party is in material breach of or default under any such contracts.
4.26 No Integrated Offering
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 in
any security or solicited any offers to buy any security under circumstances
that would require registration under the Securities Act of the issuance of the
Shares to the Purchasers. The issuance of the Shares to the Purchasers will not
be integrated with any other issuance of the Company's securities (past, current
or future) for purposes of the Securities Act or any applicable rules of the
American Stock Exchange (or of any national securities exchange on which the
Company's Common Stock is then traded). The Company will not make any offers or
sales of any security (other than the Shares) that would cause the offering of
the Shares to be integrated with any other offering of securities by the Company
for purposes of any registration requirement under the Securities Act or any
applicable rules of the American Stock Exchange (or of any national securities
exchange on which the Company's Common Stock is then traded).
4.27 Listing of Shares
Following the Closing, the Company agrees to promptly secure the listing of
the Shares upon each national securities exchange or automated quotation system
upon which shares of Common Stock are then listed and, so long as any Purchaser
owns any of the Shares, shall use best efforts to maintain such listing of all
Shares. The Company has taken no action designed to delist, or which is likely
to have the effect of delisting, the Common Stock from any of the national
securities exchange or automated quotation system upon which the shares of
Common Stock are then listed.
4.28 No Manipulation of Stock
The Company has not taken and will not, in violation of applicable law,
take any action outside the ordinary course of business designed to or that
might reasonably be expected to cause or result in unlawful manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
9.
5. Representations, Warranties And Covenants Of The Purchasers
5.1 Securities Law Representations and Warranties
Each Purchaser represents, warrants and covenants to the Company as
follows:
(a) The Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares.
(b) The Purchaser is acquiring the number of Shares set forth in Section
2 above in the ordinary course of its business and for its own account for
investment (as defined for purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976 and the regulations thereunder) only, and has no present
intention of distributing any of the Shares nor any arrangement or understanding
with any other persons regarding the distribution of such Shares within the
meaning of Section 2(11) of the Securities Act, other than as contemplated in
Section 7 of this Agreement.
(c) The Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act and the rules and regulations promulgated thereunder
(the "Rules and Regulations").
(d) The Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire and the Registration Statement Questionnaire, attached
to this Agreement as Appendices I and II, for use in preparation of the
Registration Statement (as defined in Section 7.3 below), and the answers to the
Questionnaires are true and correct as of the date of this Agreement and will be
true and correct as of the effective date of the Registration Statement;
provided that the Purchasers shall be entitled to update such information by
providing notice thereof to the Company before the effective date of such
Registration Statement.
(e) The Purchaser has, in connection with its decision to purchase the
number of Shares set forth in Section 2 above, relied solely upon the Company
Documents and the representations and warranties of the Company contained in
this Agreement.
(f) The Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D promulgated under the Securities Act.
5.2 Resales of Shares
(a) The Purchaser hereby covenants with the Company not to make any sale
of the Shares without satisfying the requirements of the Securities Act and the
Rules and Regulations, including, in the event of any resale under the
Registration Statement, the prospectus delivery requirements under the
Securities Act, and the Purchaser acknowledges and agrees that such Shares are
not transferable on the books of the Company pursuant to a resale under the
10.
Registration Statement unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate officer's certificate
(i) in the form of Appendix III to this Agreement;
(ii) executed by an officer of, or other authorized person
designated by, the Purchaser; and
(iii) to the effect that (A) the Shares have been sold in
accordance with the Registration Statement and (B) the requirement of delivering
a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may occasionally be times when
the Company determines, in good faith following consultation with its Board of
Directors or a committee thereof, the use of the prospectus forming a part of
the Registration Statement (the "Prospectus," as further defined in Section
7.3.1 below) should be suspended until such time as an amendment or supplement
to the Registration Statement or the Prospectus has been filed by the Company
and any such amendment to the Registration Statement is declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The Purchaser hereby
covenants that it will not sell any Shares pursuant to the Prospectus during the
period commencing at the time at which the Company gives the Purchaser written
notice of the suspension of the use of the Prospectus and ending at the time the
Company gives the Purchaser written notice that the Purchaser may thereafter
effect sales pursuant to the Prospectus. The Company may, upon written notice to
the Purchasers, suspend the use of the Prospectus for up to thirty (30) days in
any 365-day period based on the reasonable determination of the Company's Board
of Directors that there is a significant business purpose for such
determination, such as pending corporate developments, public filings with the
SEC or similar events. The Company shall in no event be required to disclose the
business purpose for which it has suspended the use of the Prospectus if the
Company determines in its good faith judgment that the business purpose should
remain confidential. In addition, the Company shall notify each Purchaser (i) of
any request by the SEC for an amendment or any supplement to such Registration
Statement or any related prospectus, or any other information request by any
other governmental agency directly relating to the offering, and (ii) of the
issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of any
related prospectus or the initiation or threat of any proceeding for that
purpose.
(c) The Purchaser further covenants to notify the Company promptly of the
sale of any of its Shares, other than sales pursuant to a Registration Statement
contemplated in Section 7 of this Agreement or sales upon termination of the
transfer restrictions pursuant to Section 7.4 of this Agreement.
5.3 Due Execution, Delivery and Performance
(a) This Agreement has been duly executed and delivered by the Purchaser
and constitutes a valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
11.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement have been duly authorized by all
necessary corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Purchaser pursuant to, any
contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which the Purchaser is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Purchaser is subject, nor will such
action result in any violation of the provisions of the charter or bylaws of the
Purchaser or any applicable statute, law, rule, regulation, ordinance, decision,
directive or order.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Purchasers in this Agreement and in the certificates for the Shares
delivered pursuant to this Agreement shall survive the execution of this
Agreement, the delivery to the Purchasers of the Shares being purchased and the
payment therefor.
7. Form D Filing; Registration; Compliance with the Securities Act;
Covenants
7.1 Form D Filing; Registration of Shares
7.1.1 Registration Statement; Expenses
The Company shall:
(a) file in a timely manner a Form D relating to the sale of the
Shares under this Agreement, pursuant to Securities and Exchange Commission
Regulation D.
(b) as soon as practicable after the Closing Date, but in no event
later than the 30th day following the Closing Date, prepare and file with the
Commission a Registration Statement on Form S-3 (or, if the Company is
ineligible to use Form S-3, then on Form S-1) relating to the sale of the Shares
by the Purchasers from time to time on the American Stock Exchange (or the
facilities of any national securities exchange on which the Company's Common
Stock is then listed and traded) or in privately negotiated transactions (the
"Registration Statement");
(c) provide to Purchasers any information required to permit the sale
of the Shares under Rule 144 of the Securities Act;
(d) subject to receipt of necessary information from the Purchasers,
use its best efforts to cause the Commission to notify the Company of the
Commission's willingness to declare the Registration Statement effective on or
before 90 days after the Closing Date;
(e) notify Purchasers promptly upon the Registration Statement, and
any post-effective amendment thereto, being declared effective by the
Commission;
12.
(f) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus (as defined in
Section 7.3.1 below) and take such other action, if any, as may be necessary to
keep the Registration Statement effective until the earlier of (i) the date on
which the Shares may be resold by the Purchasers without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the Shares
have been sold pursuant to the Registration Statement or Rule 144 under the
Securities Act or any other rule of similar effect;
(g) promptly furnish to the Purchasers with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Prospectus, including any supplements to or amendments of the Prospectus, in
order to facilitate the public sale or other disposition of all or any of the
Shares by the Purchasers;
(h) during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations promulgated thereunder;
(i) file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance; provided, however, that
the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; and
(j) bear all expenses in connection with the procedures in paragraphs
(a) through (i) of this Section 7.1.1 and the registration of the Shares
pursuant to the Registration Statement.
7.1.2 Delay in Effectiveness of Registration Statement
In the event that the Registration Statement is not declared effective
on or before the 120/th/ day following the Closing Date (the "Penalty Date"),
the Company shall pay to each Purchaser liquidated damages in an amount equal to
0.25% of the total purchase price of the Shares purchased by such Purchaser
pursuant to this Agreement for each week after the Penalty Date that the
Registration Statement is not declared effective.
7.2 Transfer of Shares After Registration
Each Purchaser agrees that it will not effect any disposition of the
Shares or its right to purchase the Shares that would constitute a sale within
the meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3 Indemnification
For the purpose of this Section 7.3, the term "Registration Statement"
shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in
Section 7.1.
13.
7.3.1 Indemnification by the Company
The Company agrees to indemnify and hold harmless each of the
Purchasers and each person, if any, who controls any Purchaser within the
meaning of the Securities Act, against any losses, claims, damages, liabilities
or expenses, joint or several, to which such Purchasers or such controlling
person may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company, which consent shall not be
unreasonably withheld), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, including the Prospectus,
financial statements and schedules, and all other documents filed as a part
thereof, as amended at the time of effectiveness of the Registration Statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434,
of the Rules and Regulations, or the Prospectus, in the form first filed with
the Commission pursuant to Rule 424(b) of the Regulations, or filed as part of
the Registration Statement at the time of effectiveness if no Rule 424(b) filing
is required (the "Prospectus"), or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any of
them a material fact required to be stated therein or necessary to make the
statements in any of them, in light of the circumstances under which they were
made, not misleading, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company contained in
this Agreement, or any failure of the Company to perform its obligations under
this Agreement or under law, and will reimburse each Purchaser and each such
controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, or (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in Sections 5.2 or 7.2 of this Agreement respecting resale of the Shares, or
(iii) the inaccuracy of any representations made by such Purchaser in this
Agreement or (iv) any untrue statement or omission of a material fact required
to make such statement not misleading in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchaser before the pertinent
sale or sales by the Purchaser.
7.3.2 Indemnification by the Purchaser
Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person may become
subject, under
14.
the Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Purchaser, which consent shall not be unreasonably withheld) insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any failure on the
part of such Purchaser to comply with the covenants and agreements contained in
Sections 5.2 or 7.2 of this Agreement respecting the sale of the Shares or (ii)
the inaccuracy of any representation made by such Purchaser in this Agreement or
(iii) any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement to
the Registration Statement or Prospectus, 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 not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser expressly for use therein; provided,
however, that the Purchaser shall not be liable for any such untrue or alleged
untrue statement or omission or alleged omission of which the Purchaser has
delivered to the Company in writing a correction before the occurrence of the
transaction from which such loss was incurred, and the Purchaser will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
7.3.3 Indemnification Procedure
(a) Promptly After receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.3, promptly notify the indemnifying party in writing
of the claim; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such failure.
(b) In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, 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 a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon
15.
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7.3 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless:
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party representing all of the indemnified parties
who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of action, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party. Notwithstanding the provisions of this Section 7.3, the
Purchaser shall not be liable for any indemnification obligation under this
Agreement in excess of the amount of gross proceeds received by the Purchaser
from the sale of the Shares.
7.3.4 Contribution
If the indemnification provided for in this Section 7.3 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under this Section 7.3 in
respect to any losses, claims, damages, liabilities or expenses referred to in
this Agreement, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to in this Agreement
(a) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of Common Stock or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations.
The respective relative benefits received by the Company on the one
hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount paid by such Purchaser to the Company pursuant to this
Agreement for the Shares purchased by such Purchaser that were sold pursuant to
the Registration Statement bears to the difference (the "Difference") between
the amount such Purchaser paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by such Purchaser from such sale.
The relative fault of the Company and each Purchaser shall be determined by
reference to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged
16.
omission to state a material fact or the inaccurate or the alleged inaccurate
representation or warranty relates to information supplied by the Company or by
such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7.3.3, any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim. The provisions set forth in Section 7.3.3 with
respect to the notice of the threat or commencement of any threat or action
shall apply if a claim for contribution is to be made under this Section 7.3.4;
provided, however, that no additional notice shall be required with respect to
any threat or action for which notice has been given under Section 7.3 for
purposes of indemnification. The Company and each Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section 7.3 were
determined solely by pro rata allocation (even if the Purchaser were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, no Purchaser shall be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this
Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations
The restrictions imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares upon the passage of two years from the Closing Date or at
such time as an opinion of counsel satisfactory in form and substance to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
7.5 Information Available
From the date of this Agreement through the date the Registration
Statement covering the resale of Shares owned by any Purchaser is no longer
effective, the Company will furnish to such Purchaser:
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Shareholders, within 90 days after the end of each
fiscal year of the Company), one copy of
(i) its Annual Report to Shareholders (which Annual Report shall
contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants);
(ii) if not included in substance in the Annual Report to
Shareholders, its Annual Report on Form 10-K;
17.
(iii) if not included in substance in its Quarterly Reports to
Shareholders, its quarterly reports on Form 10-Q; and
(iv) a full copy of the particular Registration Statement
covering the Shares (the foregoing, in each case, excluding exhibits);
(b) upon the request of the Purchaser, a reasonable number of copies
of the Prospectus to supply to any other party requiring the Prospectus.
7.6 Rule 144 Information
Until the earlier of (i) the date on which the Shares may be resold by
the Purchasers without registration and without regard to any volume limitations
by reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the Shares have been sold pursuant to the Registration
Statement or Rule 144 under the Securities Act or any other rule of similar
effect, the Company shall file all reports required to be filed by it under the
Securities Act, the Rules and Regulations and the Exchange Act and shall take
such further action to the extent required to enable the Purchasers to sell the
Shares pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time).
7.7 Stock Option Matters and Prohibition on Toxics
The Company shall, within thirty (30) days of the Closing Date, adopt
such amendments to, with respect to (i) and (ii) below, the Company's stock
option plans and By-laws, and, with respect to (iii) and (iv) below, the
Company's By-laws (together, the "Stock Option Plan and By-law Amendments") to
provide that, unless approved by the holders of a majority of the shares present
and entitled to vote at a duly convened meeting of shareholders, the Company
agrees that it shall not:
(i) grant any stock options with an exercise price that is less
than 100% of the fair market value of the underlying stock on the date of grant;
(ii) reduce the exercise price of any stock option granted under
any existing or future stock option plan;
(iii) sell or issue any security of the Company convertible,
exercisable or exchangeable into shares of Common Stock, having a conversion,
exercise or exchange price per share which is subject to downward adjustment
based on the market price of the Common Stock at the time of conversion,
exercise or exchange of such security into Common Stock (except for appropriate
adjustments made to give effect to any stock splits or stock dividends); or
(iv) enter into (a) any equity line or similar agreement or
arrangement; or (b) any agreement to sell Common Stock (or any security
convertible, exercisable or exchangeable into shares of Common Stock ("Common
Stock Equivalent")) for cash at a per share price (or, with respect to a Common
Stock Equivalent, at a conversion, exercise or exchange price, as the case may
be ("Equivalent Price")) that is fixed after the execution date of the
agreement, whether or not based on any predetermined price-setting formula or
calculation method. Notwithstanding the foregoing, however, a price protection
clause shall be permitted in an agreement for sale of
18.
Common Stock or Common Stock Equivalent, if such clause provides for an
adjustment to the price per share of Common Stock or, with respect to a Common
Stock Equivalent, to the Equivalent Price (provided that such price or
Equivalent Price is fixed on or before the execution date of the agreement)(the
"Fixed Price") in the event that the Company, during the period beginning on the
date of the agreement and ending no later than 90 days after the closing date of
the transaction, sells shares of Common Stock or Common Stock Equivalent to
another investor at a price or Equivalent Price, as the case may be, below the
Fixed Price.
The Stock Option Plan and By-law Amendments may not be further amended
or repealed without the affirmative vote of the holders of a majority of the
shares present and entitled to vote at a duly convened meeting of shareholders.
Upon the adoption of the Stock Option Plan and By-law Amendments, the Company
shall promptly furnish a copy of such amendments to the Purchasers. The Company
agrees that, prior to the adoption of the Stock Option Plan and By-law
Amendments by all necessary corporate action of the Company as described above,
the Company shall not conduct any of the actions specified in (i), (ii), (iii)
or (iv) above of this Section 7.7.
8. Legal Fees and Other Transaction Expenses
At the Closing, the Company agrees to pay a flat fee of $5,000 to the
State of Wisconsin Investment Board for their legal and other transaction
expenses (whether internal or external) arising in connection with the
transactions contemplated by this Agreement.
9. Broker's Fee
Each of the parties to this Agreement hereby represents that, on the basis
of any actions and agreements by it, there are no brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchasers. The
Company shall indemnify and hold harmless the Purchasers from and against all
fees, commissions or other payments owing by the Company to any person or firm
acting on behalf of the Company hereunder.
10. Notices
All notices, requests, consents and other communications under this
Agreement shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be delivered as addressed as follows:
(a) if to the Company, to:
Identix Incorporated
000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx
Chief Financial Officer
Fax No: (000) 000-0000
19.
With a copy to:
Identix Incorporated
000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Vice President, General Counsel & Secretary
Fax No: (000) 000-0000
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to a Purchaser, at its address as set forth on the signature page
to this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
Such notice shall be deemed effectively given upon confirmation of
receipt by facsimile, one business day after deposit with such overnight courier
or three days after deposit of such registered or certified airmail with the
U.S. Postal Service, as applicable.
11. Modification; Amendment
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and each of the Purchasers.
12. Termination
This Agreement may be terminated as to any Purchaser, at the option of
such Purchaser, if the Closing has not occurred on or before thirty (30) days
from the date of this Agreement.
13. Headings
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
14. Severability
If any provision contained in this Agreement should be held to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
15. Governing Law; Jurisdiction
20.
This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware and the federal law of the United States of
America..
16. No Conflicts of Interest
The Company represents, warrants, and covenants that, to the best of
its knowledge, no trustee or employee of the State of Wisconsin Investment Board
identified on the attached list, either directly or indirectly (a) currently
holds, except as may be specifically set forth below, a personal interest in the
Company or any of its affiliates (together, the "Entity") or the Entity's
property or securities, or (b) will, in connection with the investment made
pursuant to this Agreement, receive (i) a personal interest in the Entity or the
Entity's property or securities or (ii) anything of substantial economic value
for his or her private benefit from the Entity or anyone acting on its behalf.
As to ownership of an interest in the Entity's publicly traded securities,
"knowledge" hereunder is based on an examination of record holders of the
Entity's securities and actual knowledge of the undersigned.
17. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
21.
[Signature pages follow]
In Witness Whereof, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
IDENTIX INCORPORATED
By___________________________________
Name: ______________________________
Its: _______________________________
State of Wisconsin Investment Board
By: ________________________________
Name: ______________________________
Title: _____________________________
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
22.
Execution Copy
Schedule A
PURCHASERS
The State of Wisconsin Investment Board 2,225,000 Shares
